WHEN you run a business, if you see a problem you solve the problem. If you don’t, as most business owners know well, it will only increase costs in the long run and may even do harm to one’s customers.

The same applies to state government, particularly as policymakers return to work and begin finding ways to address the significant state budget deficit brought about by the COVID-19 lock down. For now, the reality is that New Hampshire needs to identify budget savings that will free up dollars for critical state needs without asking more of businesses and taxpayers who are struggling to get by in the midst of the COVID pandemic.

One area for savings is reducing the amount of taxpayer funds that the state spends on prescription drugs. Fortunately, leaders in Concord are pursuing a bipartisan legislative solution that will save the state money, directly benefit taxpayers, and establish a model for businesses and municipalities large and small. It’s an approach that holds tremendous potential for significant and immediate savings.

Currently, New Hampshire is paying more than $70 million a year to a Pharmacy Benefits Manager (PBM) to negotiate drug prices for the medicines prescribed to state employees and retirees. A PBM is a company that purchases drugs from a pharmaceutical manufacturer and re-sells them to health plans and pharmacies. Under the current state purchasing system, it is difficult to know if the PBM is keeping prices low, because PBMs’ formulas are complex and not very transparent in multi-year contracts. With actual costs unknown, the marketplace doesn’t work very well for the purchasers like our state government.

Fortunately for all of us, legislation introduced by Nashua state Senator Cindy Rosenwald, passed by the Senate and under consideration by the New Hampshire House right now, gives us a chance to fix it.

The measure, called the “New Hampshire Prescription Drug Marketplace” has broad support from Democrat and Republican state legislators, as well as from state businesses and labor. It would replace our current method of contracting with a PBM with an eBay-like online competitive marketplace. It’s a “reverse auction” approach designed to achieve a simple, but necessary, objective — getting the best possible deal for state purchasers and taxpayers.

This reverse auction solution is already working in New Jersey, where the state has run two successful reverse auctions under former Republican Governor Chris Christie, and current Governor Phil Murphy, a Democrat. Maryland enacted similar legislation with bipartisan support earlier this year.

It works like this: First, the state writes its own best-in-class contract and invites PBMs to bid on it. Then, the state launches an automated, online competitive bidding process for all the companies that want our pharmacy benefits business. They give us their best price. But that’s just the first round. At the end of each bidding round, competing companies get to see the other offers and have the opportunity to underbid them over several rounds of bidding.

Stated simply, there is no downside. And facing a severe budget deficit, this proven method of providing cost-savings is exactly the type of action the state needs to take now. If a PBM wants New Hampshire’s business badly enough, it will compete by offering terms that enable them to make a fair profit without charging too much.

It’s worked well in New Jersey, which projects savings for state taxpayers of $2.5 billion over a five-year period and a 25 percent reduction in prescription drug costs in the first year. A projection out last week from the Josiah Bartlett Center for Public Policy shows tangible annual savings to New Hampshire taxpayers of up to $22.2 million a year.

The reverse auction solution is also an opportunity for state government to lead by example. The measure under consideration creates the opportunity for local government and, after the first reverse auction, even private businesses to join with the state government in receiving the benefits of substantially lower prescription drug costs. Our transparent New Hampshire competitive marketplace could eventually mean more affordable prescription drugs for everyone in our state.

Right now, the state is likely over-paying millions of dollars a year for prescription drugs. This is a problem New Hampshire can ill-afford with the pile up of public deficit from the COVID pandemic. Fortunately, relief is at hand. Now, more than ever, we need to recapture our state taxpayers’ money. With the bipartisan leadership in Concord, we can actually do this.

Kate Luczko is president and CEO of Greater Nashua Chamber of Commerce. She lives in Manchester.

Thursday, September 24, 2020
Wednesday, September 23, 2020

IT WAS ONCE written of Chester Arthur, the 21st president, that “No man ever entered the Presidency so profoundly and widely distrusted as Chester Alan Arthur, and no one ever retired...more generally respected, alike by political foe and friend.”

Tuesday, September 22, 2020
  • Updated

EVERY TIME military officers are promoted, they repeat the oath of office they took when first commissioned: “I will support and defend the Constitution of the United States of America against all enemies, foreign and domestic, and I will bear true faith and allegiance to the same.”

AS THE Union Leader and many other papers have reported, all of New Hampshire is experiencing some level of drought and nearly one quarter of the state is experiencing severe drought (despite our recent batch of rain), according to the U.S. Drought Monitor.

Monday, September 21, 2020

THE PANDEMIC grinds on. A fraught new school year begins (sort of). Chilly weather brings ominous thoughts of how much more difficult it will be to keep distanced and stay safe. And hundreds of thousands in the Granite State struggle with maddeningly slow and unreliable internet service — if…

Sunday, September 20, 2020
  • Updated

IN THE summer of 2010, I started seeing flags everywhere. It was like when you buy a new car and then start seeing the same vehicle on every street you drive. The official name is the “Baader-Meinhof Phenomenon,” also known as “frequency illusion.” No matter the name, during that summer, fla…

WHEN I ANSWERED the front door one Sunday morning, a chaplain, a U.S. Navy admiral, and a casualty notification officer came bearing news from Londonderry. News I had to share with the primary next of kin — a dedicated Navy wife of 11 years — upstairs in our family’s home on the Naval Air St…

Friday, September 18, 2020
Thursday, September 17, 2020

IN RESPONSE to the well-written article by Jim Adams, former district manager of the Postal Service, although his opinion piece was accurate, it also omitted some significant changes in recent postal operations that go beyond a mere continuation of former policies. Most of the changes instit…

Wednesday, September 16, 2020

WHILE THE primaries are a fading image in the rear-view mirror and the chosen candidates are fully immersed in their general election stumping, there are still some interesting lessons to be learned from the results of those primary contests.

Tuesday, September 15, 2020
Monday, September 14, 2020

I’VE BEEN an activist since I was eight years old. As a kid of Polish descent growing up in Minnesota, other kids would tease me for my funny-sounding name (it’s pronounced My-ka). I could sit there and take it, or I could stand up for myself. I chose the latter and I’ve been doing so ever since.

IN CELEBRATION of the start of hunting season, Andy Schafermeyer devoted his September 6 “Adventures Afield” column to advertising different ways to hunt black bears. Bear hunting season in New Hampshire began Sept. 1.