New Jersey passes Legislation to cap essential medication costs
New Jersey Governor Phil Murphy has signed new legislation that caps out of pocket costs for life essential prescriptions while also creating new safeguards that forces more accountability for the drug pricing process.
Prescription Drug Costs have been a contentious topic over the years and three bills have been signed into law that will work together to help New Jersey Residents spend less on prescriptions at their local pharmacies. This legislation package also creates a new system that will bring more transparency to consumers so they have clear information about the how and why their medications cost what they do.
In a press release from the New Jersey Governor's Office, here is the list of three bills signed into law as companions apart of a larger package of new legislation:
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 New Jersey 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. This 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."
Along with the three bills signed into law summarized above, another part of this legislative package expands eligibility for the Pharmaceutical Assistance for the Aged and Disabled (PAAD) program, creating more cost cutting for life-enhancing and life-saving prescription drugs for New Jersey Seniors along with residents who have disabilities. The companion bill to this legislative package also authorizes eligibility expansion to help get even more New Jersey Residents enrolled in both PAAD and the Senior Gold Prescription Discount program moving forward.
This news makes New Jersey one of the most proactive states in curbing rising prescription costs, especially for life-essential and life-saving medications. Many people need Insulin, Asthma Inhalers, and EpiPens but the costs for many essential prescriptions have gotten out of control, forcing the rationing and repurposing of medications, actions that can have dangerous consequences. And even though there are online companies such as Cost Plus that give consumers an inexpensive option for their prescriptions compared to local pharmacies, not everyone is in a position to use these types of services for a variety of reasons that can be out of their control. So this legislation is a big step in the right direction for many New Jersey residents who need to be protected from the pricing manipulations of their needed medications.