In a first for New Mexico, lawmakers put the pharmaceutical industry on the hot seat recently with a daylong hearing on the high cost of prescription drugs, and the Legislative Health and Human Services Committee stood up for New Mexico patients and consumers by endorsing the creation of a Prescription Drug Affordability Board. For the many New Mexicans struggling to afford the medications they need, Gov. Michelle Lujan Grisham can add to her strong record as a public health leader by including the bill on her priority list for this legislative session.
Creating a PDAB is among the top recommendations to determine the true cost of prescription drugs and help make medications more affordable for consumers, according to a bipartisan National Conference of State Legislatures report. A PDAB would regulate prescription drugs with costs that greatly impact New Mexicans, including high-cost, brand name medications. The board would consider a range of economic factors when setting appropriate payment rates for reviewed drugs, allowing pharmaceutical manufacturers the opportunity to justify drug costs. Once a fair payment rate is determined, the board sets an upper payment limit that applies to all purchasers and payer reimbursements in New Mexico, ensuring lower costs benefit consumers.
The legislative committee heard from patients across New Mexico who have seen drug prices rise even during the pandemic and was presented with disturbing evidence of greed and anti-consumer practices of the pharmaceutical industry from the most recent report of the Institute for Clinical and Economic Review on unsupported price increases.
The story of one popular medication illustrates the urgency of protecting patients and holding drug companies accountable. Humira, created by AbbVie, is used to treat rheumatoid arthritis, Crohn’s Disease, colitis and other illnesses and is the No. 1-selling drug in the United States and the world. From 2003 to 2021, Humira’s price has increased 470%, from $16,600 to $77,000 per year. Despite the fact Humira’s patent was to end in 2016 and allow for more affordable biosimilar alternatives, AbbVie has blocked them through a tactic called “Pay for Delay,” pushing the expiration to 2023 and costing U.S. consumers $19 billion, according AHIP, the Association of Health Insurers. In 2020 alone, AbbVie collected $16 billion in U.S. net revenue.
Pharma greed is not limited to AbbVie. Prices for 460 prescription drugs increased by an average of 5.2% in 2020 – more than triple the rate of inflation – according to an analysis from health care research firm 3 Axis Advisors. And the Journal of the American Medical Association reports 35 drug companies raked in $8.6 trillion in profits between 2000 and 2018.
It is past time for action. Americans pay four times as much for the same medicines as people in other countries, and 44% of New Mexicans report they have skipped taking medication or not filled a prescription because of cost concerns, according to a recent statewide survey.
Prescription drug companies are the only businesses in the health care industry whose rates are not regulated. It’s time to hold them to the same standard as other health care providers. Creating a PDAB is a common-sense solution to drive down the cost of medication. I applaud the Health and Human Service Committee’s endorsement and urge the governor to push for the bill this session.