On Tuesday, July 22 at 10:30 AM, DMoller and Associates will make a critical report to Legislative Health and Human Services Committee that will recommend state strategies to lower New Mexico drug prices. The meeting will be held in Las Vegas and is available online.
This work is a follow-up on an initial Moller 2023 report. LHHSC re-engaged DMoller and Associates Healthcare Consultants to make a thorough cost-benefit analysis of strategies already identified as promising for lowering drug costs for New Mexicans. The failing PBM model is under serious scrutiny in Congress as well as in many states.
With her four decades plus career, Moller is extremely qualified to help our state figure out the best path forward to address this growing problem that impacts all New Mexicans.
One strategy is the idea of states banding together to engage in joint purchasing of drugs. The possibility of joining a multi-state drug purchasing consortium was strongly featured in Mueller's 2023 report. Another strategy to be explored includes a state creating its own drug purchasing board, in which New Mexico would set drug prices based on costs negotiated elsewhere. (Whatmis referred to as reference pricing.) And there are other important fixes such as changing prior authorization requirements – which often compel that the in-network approved formulary drug be selected first, which creates delays for better treatment choices.
The consortium, initially launched by Oregon and Washington, is called ArrayRx and now includes Connecticut, Nevada, and Iowa.
"By joining together and pooling the purchasing capacity of participating programs, ArrayRx's ability to achieve price improvements, enhanced manufacturer rebates, and lower administrative fees," wrote Mueller in her first report. "Array program design also includes specific features to protect independent and rural pharmacies."
The scope of work for this second phase of Moller's research on strategies to lower drug costs for New Mexicans was commissioned to answer vital technical questions about various strategies the state could pursue. Conclusions from this research can be used to address New Mexico appropriate solutions to the escalating drug cost problem and draft legislation where called for.
Solution-focused contracts like Moller's are part of LHHSC's Health Cost Drivers project. The project identifies systemic causes of skyrocketing health costs, hiring topic experts to evaluate and adapt promising solutions for New Mexico. It's five categories are hospital costs, complex billing and payment systems, unchecked drug prices, flawed IT systems, and the administrative burdens created by the proliferation of public and private insurance plans.
Past reports have explored hospital budgeting innovations that support rural and independent hospitals, and address administrative costs including the burden of the prior authorization process imposed by insurers. Currently LHHSC has hired experts to develop alternative payment and billing systems, and to engage in survey research to find out how much time New Mexico health professionals spend on billing requirement tasks that do not directly provide care.
The Health Cost Drivers framework was developed through grassroots efforts coordinated by the Health Security for New Mexicans Campaign, a coalition of 170 organizations and thousands of individuals throughout the state. Its mission is to create a homegrown Health Security system where everyone would have coverage.
Three independent New Mexico studies have been conducted during the past thirty years comparing the cost of different health coverage systems. They found a plan like Health Security would likely save hundreds of millions of dollars within five years of implementation, because it addresses what we now call the Health Cost Drivers.
In addition to including systemic cost solutions, the Health Security Plan would guarantee quality health coverage, preserve freedom to choose a provider, and be overseen by a geographically representative citizens' board.
