New Jersey has passed a landmark law limiting the power of pharmacy benefit managers (PBMs). On Monday, July 10, 2023, Governor Phil Murphy signed the law, requiring PBMs to disclose their negotiated reimbursement rates for pharmaceuticals sold by their pharmacy networks alongside the fees they charge individual pharmacies. Additional sections of the law include the creation of a New Jersey state board to oversee drug price increases and requirements for drug manufacturers to disclose to the Division of Consumer Affairs whenever they launch a drug whose price exceeds a specialty drug cost threshold set by Medicare.

The law is a major victory for patients and independent pharmacies, who have long been at the mercy of PBMs. PBMs are middlemen who negotiate drug prices with manufacturers on behalf of insurers. They have a great deal of power over the prescription drug market, and they have been accused of using that power to drive up prices and squeeze independent pharmacies out of business.

The new law will help to level the playing field for independent pharmacies and give patients more control over their prescription drug costs. It will also help to bring down the overall cost of prescription drugs in New Jersey.

What does this mean for independent pharmacies?

The new requirement for PBMs to disclose their negotiated reimbursement rates for pharmaceuticals sold by their pharmacy networks alongside the fees they charge individual pharmacies will give independent pharmacies, regulators, and patients more transparency into the PBMs' pricing practices. It will be eye-opening to see if there is a disparity between reimbursements to independent pharmacies and PBM pharmacy networks.

The newly created state board will have the authority to investigate and take action against PBMs when they engage in unfair or deceptive pricing practices.

What does this mean for patients?

The new law caps monthly out-of-pocket expenses for insulin at $35, epinephrine injectors at $25, and asthma inhalers at $50 for all New Jerseyans on state-regulated or public worker health plans. This will help to make these essential medications more affordable for patients.

The law also requires drug manufacturers to disclose to the Division of Consumer Affairs whenever they launch a drug whose price exceeds a specialty drug cost threshold set by Medicare. This disclosure will help to ensure that patients are not overcharged for prescription drugs.

The passage of this new law is a major victory for patients and independent pharmacies. It will help to level the playing field for independent pharmacies, give patients more control over their prescription drug costs, and bring down the overall cost of prescription drugs in New Jersey.

[View source.]