New Jersey Governor Phil Murphy signed three bills today which aim to make prescription drugs more affordable residents in the state by setting caps on certain costs and by expanding or increasing the Medicare reimbursement rate in some areas.
The legislation also makes New Jersey the second state in the nation to cap out of pocket costs for asthma inhalers and EpiPens in addition to capping consumer costs for insulin.
The three bills the Governor signed today are:
- S-1614 – Caps out-of-pocket costs for many residents by extending Medicare’s new $35/month insulin out of pocket cap to state-regulated markets and NJ public employee plans, as well as capping out of pocket costs for EpiPens and asthma inhalers at $25 and $50 respectively for a month’s supply.
- S-1615 – Creates a new data and transparency system within the Division of Consumer Affairs to collect, analyze, and report on the entire process of drug pricing across the supply chain in an effort to gain greater insight into drugs with high price increases and launch prices. The bill also establishes a Drug Affordability Council to formulate legislative and regulatory policy recommendations that help advance the goal of prescription drug affordability and accessibility.
- A-536/2841 – Establishes greater oversight of Pharmacy Benefit Managers (PBMs), the third-party companies who manage many prescription-drug plans, to prevent certain practices that drive up costs. This bill requires rebates to be used to lower premiums and out-of-pocket costs for consumers and prevents the practice of spread pricing (when a PBM pockets the difference between what it charges a health plan and reimburses a pharmacy). It also requires PBMs to apply for a license from the NJ Department of Banking & Insurance to strengthen regulatory oversight.
To further advance prescription affordability, the Governor also included funding in the Fiscal Year 2024 budget to expand eligibility for the Pharmaceutical Assistance for the Aged and Disabled (PAAD) program, which further cuts the costs of life-enhancing and life-saving prescription drugs for seniors and residents with disabilities.
A companion bill signed on the same day as the budget, in addition to authorizing the eligibility expansion, will help get even more eligible New Jerseyans enrolled in both PAAD and the Senior Gold Prescription Discount program going forward.
Why stop there? What about the contant costs that people with other health challenges deal with regularly? I’m not at all saying that this whole price cap business is warranted, just that if we’re doing it we shouldn’t be favoring one group over another.