A newly formed coalition behind NSW's biggest music festivals claims policies encouraging abstinence over education on illicit drug use are "out-of-touch" and unnecessarily risking lives.

In a strongly worded open letter to state and territory leaders, including NSW Premier Gladys Berejiklian, the Australian Festival Association (AFA) is urging governments to work with health, festival and drug experts to develop pill testing trials.

The Australian Festivals Association says it's time state and territory governments adopt pill testing. Credit:James Alcock

The AFA said that while its members didn't believe pill testing was the only answer, it was a "crucial part of a broader harm reduction strategy that prioritises people’s health and safety, over criminality or laws".

"Young people deserve better. Older people deserve better. Families deserve better," the statement released on Wednesday afternoon says.