As part of the Murphy Administration’s ongoing efforts to advance health care affordability on behalf of the residents of our state, Governor Phil Murphy today signed three bills he announced in partnership with legislative sponsors last year to help make prescription drugs more affordable for New Jerseyans. The three bills, which were signed alongside legislators and advocates, will work together to cap certain out-of-pocket costs, establish greater oversight of Pharmacy Benefit Managers, and promote transparency across the pharmaceutical supply chain.
“This is a huge step forward in our ongoing efforts to deliver much-needed relief to countless families throughout our state who are struggling to afford critical medications,” said Governor Murphy. “I am proud to sign nation-leading legislation that will make a real difference in the lives of New Jerseyans as we continue to work towards making prescription drugs and other health care services more affordable and accessible to everyone.”
Today’s bill package advances one of the most comprehensive prescription drug price transparency programs in the country to date. The legislation also makes New Jersey only 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.
With more than half of New Jersey residents concerned about the affordability of prescription drugs and one in four adults skipping or rationing their medications – an issue seen throughout the nation – the Office of Health Care Affordability and Transparency worked closely with legislative partners and other community stakeholders to advance this legislation for prescription drug affordability. Governor Murphy launched this office in 2020 to lead efforts across the Administration to make health care more affordable for residents and address the unsustainable rise in health care costs.
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.
The following legislators sponsored one or more of the three bills signed today – Senators Joseph Vitale and Troy Singleton and Assemblyman John McKeon, in addition to Senators Nellie Pou, Linda Greenstein, and Vin Gopal and Assembly Members Roy Freiman, Angela McKnight, Robert Karabinchak, Bill Moen, Gabriela Mosquera, Annette Quijano, Paul Moriarty, Joseph Danielsen, Daniel Benson, and Verlina Reynolds-Jackson.