NH taxpayers could save $22 million a year if House votes in favor of HB1280

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Members of the PBM Accountability Project of New Hampshire promote lower drug costs through PBM procurement reform at the State House. Courtesy Photo

CONCORD, NH – The New Hampshire legislature is on the verge of passing bipartisan legislation that could save taxpayers more than $22 million per year. On Wednesday, June 30, the New Hampshire House will vote on HB1280, a bill to create a fair and competitive marketplace for pharmacy benefit managers (PBMs). The legislation passed the state Senate last week by a unanimous vote of 24-0.

PBMs are instrumental in setting the price of prescription drugs, a fact that has been largely unknown to the public and state legislatures. Last year, an unusually diverse coalition representing New Hampshire labor, business, patient groups, health care providers and municipalities was established to create awareness about the role PBMs play in driving up the price of medications. The PBM Accountability Project of New Hampshire has led an education campaign about the role that PBMs, as middlemen purchasing prescription drugs directly from manufacturers and reselling to pharmacies and health insurance plans, play in driving up drug prices. They claim the PBMs often divert savings to increase their profit margins rather than passing them along to consumers.

HB1280, known as the “New Hampshire Prescription Drug Marketplace” offers a solution to this situation by creating a competitive marketplace for PBMs through the use of “reverse-auction” procurement process that has been demonstrated to save consumers and taxpayers millions of dollars. In 2017, the State of New Jersey passed similar bipartisan reverse auction legislation and has demonstrated savings of $1.6 billion over three years and are projecting savings of more than $2.5 billion in future contracts. Maryland, likewise, has recently enacted legislation to create a reverse auction procurement.

The Josiah Bartlett Center for Public Policy recently released a study demonstrating that New Hampshire could save up to $53 million dollars over the three-year life of the state’s PBM contract. Andrew Cline, President of the Josiah Bartlett Center, states the study shows that “this proven approach would bring direct and meaningful savings for New Hampshire taxpayers who are experiencing economic unease and uncertainty as a result of the COVID-19 pandemic,” said Andrew Cline, President of the Josiah Bartlett Center.

Currently, New Hampshire is paying more than $70 million a year to out-of-state PBMs. These PBMs are among some of the more profitable companies in the nation at a time when prescription drug prices continue to rise.

Kate Luczko, President and CEO of the Greater Nashua Chamber of Commerce supports the legislation on behalf of the Chamber. Luczko states that it’s not often that legislation enjoys such diverse support, and that’s because the reverse auction concept makes sense and has proven to be a substantial cost saver. The Nashua Chamber believes that implementing a PBM reverse auction is a win for everyone and is especially important at this time, given the economic challenges we all face due to the COVID-19 epidemic.


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