SANTA FE ― New Mexico State Sen. Jeff Steinborn, D-Las Cruces, and State Rep. Joanne Ferrary, D-Las Cruces have introduced legislation that could save taxpayers millions of dollars.
Senate Bill 354, ‘Interagency Pharmaceutical Purchasing Council’, would require that all state agencies and state benefit providers who purchase prescription drugs to work together to negotiate the price of prescription drugs.
In fiscal year 2016 the combined state agencies spent over $670 million on prescription drugs, a staggering 54% increase in two years. Steinborn’s bill would leverage taxpayer-funded health agencies in New Mexico including the Departments of Health, Human Services, Corrections, Medicaid, retired State government workers’ benefits, UNM, and other organizations, to negotiate lower drug prices.
“Given the astronomical and rising costs our state pays for prescription drugs, it’s absolutely critical to maximize our purchasing power to get the very best deal we can for taxpayers,” Steinborn said. “By requiring state agencies to work together to aggressively negotiate better prescription prices and improve health care utilization, we could literally save the state millions of dollars” said Senator Steinborn.
Ferrary added, “We owe it to New Mexicans to do everything we can to lower the cost of prescription drugs and save our state money. This is critically needed reform that our state can’t afford not to do. It would be irresponsible for us not to explore every opportunity to save funds that we need to move New Mexico forward.”
New Mexico is currently negotiating prescription drug costs on a limited basis. SB 354 would greatly expand the prescription drug purchasing currently being negotiated by state government by creating an ‘Interagency Pharmaceuticals Purchasing Council.’ The Council would be headed by the State Secretary of General Services, and include all state government purchasers of pharmaceuticals.
The Council would evaluate a range of cost containment strategies including partnering with states who already conduct bulk purchasing that realize billions in savings for state budgets, and lower prices for consumers.
According to the National Council of State Legislatures, Maryland – one example among many – reported that its Medicaid program alone saved $19 million in 2006 because of its similar purchasing pool.