In a first for New Mexico, lawmakers recently put the pharmaceutical industry in the hot seat with a day-long hearing on the high cost of prescription drugs, and the Health and Human Services Legislative Committee defended New Mexico patients and consumers by endorsing the creation of a Prescription Drug Affordability Council. For the many New Mexicans struggling to afford the medications they need, Governor 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 key recommendations to determine the true cost of prescription drugs and help make drugs more affordable for consumers, according to a bipartisan report from the National Conference of State Legislatures. A PDAB would regulate prescription drugs whose costs have a significant impact on New Mexicans, including expensive brand name drugs. The council would consider a range of economic factors when setting appropriate payment rates for drugs under review, allowing pharmaceutical manufacturers to justify drug costs. Once a fair payment rate is determined, the board sets an upper payment limit that applies to all buyer and payer refunds in New Mexico, ensuring that lower costs benefit consumers.
The legislative committee heard from New Mexico patients who saw drug prices rise even during the pandemic and received disturbing evidence of the pharmaceutical industry’s greed and anti-consumer practices in the latest report from the Institute for Clinical and Economic Review on unjustified price increases.
The story of a popular drug illustrates the urgency of protecting patients and holding pharmaceutical companies accountable. Humira, created by AbbVie, is used to treat rheumatoid arthritis, Crohn’s disease, colitis and other illnesses and is the top-selling drug in the United States and around the world. From 2003 to 2021, the price of Humira increased by 470%, from $16,600 to $77,000 per year. Despite Humira’s patent slated to expire in 2016 and allow for more affordable biosimilar alternatives, AbbVie blocked them through a tactic called “Pay for Delay”, pushing the expiration to 2023 and costing US$19 billion. American consumers, according to AHIP, the Association of Health Insurers. In 2020 alone, AbbVie raised $16 billion in net revenue in the United States.
Pharmaceutical greed is not limited to AbbVie. Prices for 460 prescription drugs have risen by an average of 5.2% in 2020, more than triple the rate of inflation, according to analysis by healthcare research firm 3 Axis Advisors. And the Journal of the American Medical Association reports that 35 pharmaceutical companies made $8.6 trillion in profits between 2000 and 2018.
It is high time to act. Americans pay four times as much for the same medications as people in other countries, and 44% of New Mexicans report skipping medications or not filling prescriptions due to cost concerns, according to a recent survey in statewide.
Prescription pharmaceutical companies are the only companies in the healthcare sector whose prices are not regulated. It’s time to keep them on par with other health care providers. The creation of a PDAB is a common sense solution to reduce the cost of drugs. I applaud the approval of the Health and Human Services Committee and urge the Governor to push for the bill this session.