The state Division of Consumer Affairs this week adopted new rules requiring pharmacy benefits managers, wholesale drug distributors, insurance carriers, drug manufacturers and others in the supply chain to disclose their prescription drug-pricing activities to the state.
The specially adopted new rules, which became effective Oct. 15 upon acceptance for filing by the Office of Administrative Law, make it possible for the state to track drug prices across the supply chain to better understand the reason for price increases. The rules implement a 2023 law, which was part of a legislative package to combat the rising costs of prescription drugs.
The new rules create registration, reporting, and compliance requirements for five entities in the prescription drug supply chain: manufacturers; insurance carriers; wholesalers; pharmacy benefits managers (PBM), and pharmacy services administrative organizations (PSAO). A PBM is a third-party company that manages prescription drug benefits for health insurers, employers, and other payers. A PSAO provides administrative services to independent pharmacies.
The affected entities will be required to provide the Division of Consumer Affairs with information and data pertaining to drugs with significant price increases or high launch prices and other drugs of interest. The Division will then use this information to produce an annual report on emerging trends in prescription drug prices.
The report, which will be posted on the Division’s newly created prescription drug pricing webpage, will also be used to help the newly created Drug Affordability Council formulate legislative and regulatory policy recommendations focused on prescription drug affordability.
Under the new rules:
- Manufacturers must notify the Division of price increases and new drugs that meet statutory price thresholds, and then report more detailed information on those drugs to the Division;
- Carriers must report to the Division information on spending for the top 25 prescription drugs and drug groups in certain categories;
- Pharmacy Services Administrative Organizations (PSAOs) must report negotiated reimbursement rates to the Division; and
- Wholesalers and Pharmacy Benefits Managers must provide pricing, volume, and discount information for drugs and drug groups identified by the Division as a result of the information provided by the manufacturers, carriers, and PSAOs.
“The high cost of prescription drugs is a financial burden that disproportionately impacts the health and well-being of the most vulnerable among us: low-income families, the elderly, the uninsured, and people with disabilities,” Attorney General Matt Platkin said Wednesday.
“Until now, we’ve been kept in the dark about the main drivers of high prescription drug costs,” he said. “The new rules allow us to gain greater insight into prescription drug pricing and a better understanding of how we can help advance the goal of prescription drug affordability and accessibility.”
The specially adopted new rules shall be effective for a period not to exceed 545 days from the date of filing. Concurrently, the provisions of the new rules will be proposed for readoption and published in the NJ Register on Nov. 18, 2024, in accordance with the normal rulemaking requirements of the Administrative Procedure Act.
