Fast-tracked Effort To Reduce Prescription Drug Costs For Some In N.J. Wins Key Support

Fueled in part by the outrage over the soaring costs for lifesaving drugs, two state legislative committees Monday approved a package of bills to curb prices on prescriptions in New Jersey and more carefully regulate pharmacy benefit managers that are hired to negotiate discounts.

The legislation approved in separate hearings by the state Assembly Insurance and Financial Institutions Committee and the Senate Commerce Committee is likely to change, however, as it makes its way through the vetting process.

Disparate groups such as New Jersey Citizen Action, a consumer rights organization, and the New Jersey Association of Health Plans, the managed care lobby, warned that the bill intended to reduce the cost asthma inhalers, insulin and EpiPens by capping copays would raise premiums.

Laura Waddell, health care program director for Citizen Action, likened setting a limit on copays “to squeezing one end of balloon,” only having it “expand on the other end.”

“Caps absolve the pharmaceutical companies of their responsibility for excessively pricing. It doesn’t require anything of them,” Waddell told the Senate committee.

Commerce Committee Chairwoman Sen. Nellie Pou, D-Passaic, assured her colleagues and the people testifying on the three-bill package that the Senate Budget and Appropriations Committee would also review and possibly amend them, taking into consideration the concerns raised at the hearing.

But the bills are a priority for both legislators and Gov. Phil Murphy, who held a press conference last month to announce the package would be introduced soon.

With the average cost of insulin climbing 64% from 2014 to 2019 and a popular asthma inhaler rising 56% from 2013 to 2018, “It is clear, the current structure must change,” said Assemblyman John McKeon, D-Essex, chairman of the Assembly committee and a prime sponsor. “Establishing a flat cap would make certain the residents in our state are guaranteed their medicine.”

The committees approved:

  • (S2839), which mandates insurance companies provide coverage for epinephrine auto-injector devices and asthma inhalers and limits cost sharing for health insurance coverage of insulin. Patients would lay out no more than a $35 copay for a 30-day supply of insulin, $25 for one epinephrine auto-injector device — better known by one of its brand names, EpiPen — and a $50 copay for an asthma inhaler.
  • (A536), which require the state Department of Banking and Insurance to license pharmacy benefit managers, professionals that negotiate rebates and other discounts for prescription drugs plans. These managers have been criticized for taking too large a cut of savings they find.
  • (A2840), which spends $900,000 enabling the state Division of Consumer Affairs to collect and analyze drug pricing at all points across the supply chain and issue an annual report.

“Our residents should not have to decide between paying for medicine or paying for other living expenses, especially coming off the heels of a global pandemic,” Sen. Troy Singleton (D-Burlington), the prime sponsor of the Senate version (S1615) of the consumer affairs bill., said after the vote.

“Putting families in this position is unacceptable and simply unconscionable. With this bill package, we will take a step towards driving down prescription drug costs through collaboration, transparency, and negotiation, which will ultimately make them more affordable.”

The bill calling on the state to license pharmacy benefit managers had the full support of the Garden State Pharmacy Owners, the Independent Pharmacy Alliance, the New Jersey Pharmacists Association and the Omega Pharmacy group.

“For too long, unlicensed pharmacy benefit managers have been able to engage in practices that drive up costs for New Jerseyans, whose lives and health depend on critical prescription drugs like insulin,” according to a statement delivered to both committees.

But Matthew Greller, a lobbyist for the Pharmaceutical Care Management Association, asked the Assembly committee to consider how more than a dozen laws have been passed to regulate the industry. “If we were the affordability problem, these 18 statutes would have already solved it,” he said.

The Assembly committee also approved a bill (A3159) that would require the state Medicaid, NJ FamilyCare program, hire an outside company to manage the Medicaid Multi-State Pooling Supplemental Rebate Arrangement program. There is not yet a companion version in the Senate.

The bill is intended to negotiate for more competitively priced drugs for the nearly 2 million people who rely on Medicaid. But Ward Sanders from the New Jersey Association of Health Plans said he feared the bill would have the opposite effect.

An association-commissioned report found New Jersey already had the 4th lowest Medicaid net costs per prescription in the nation, Sanders said. “We do not believe that there is a significant margin of savings to be found in the program, particularly when taking into account the administrative costs that would need to put in on the part of the state to implement the provisions in this bill.”

If ultimately signed into law, the four bills would only affect the one-third of New Jerseyans who get their coverage from state-regulated insurance plans, like Horizon Blue Cross Blue Shield of New Jersey, the School Employees’ Health Benefits Program and the State Health Benefits Plan. Federally regulated, self-insured companies cover the majority of New Jersey residents who have private insurance.

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