LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 1615
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: MAY 23, 2023
SUMMARY
Synopsis: Establishes certain data reporting requirements for prescription drug
supply chain; establishes Drug Affordability Council; appropriates
$1,500,000.
Type of Impact: Increase in State expenditures in FY 2024; annual increases in State
expenditures and revenues thereafter.
Agencies Affected: Department of Law and Public Safety.
Office of Legislative Services Estimate
Fiscal Impact FY 2024 FY 2025 and Thereafter
State Cost Increase Up to $1.5 million Indeterminate
State Revenue Increase None Indeterminate
 The Office of Legislative Services (OLS) finds that the bill will increase State expenditures by
up to $1.5 million in FY 2024 for the implementation costs of the Division of Consumer Affairs
related to the new data reporting requirements established in the bill for drug manufacturers,
insurance carriers, pharmacy benefits managers, drug wholesalers, and pharmacy services
administrative organizations, and the creation of the Drug Affordability Council. Thereafter,
the State will incur indeterminate annual operating costs for the division and the council related
to their new responsibilities under the bill.
 Each reporting entity enumerated above is to be charged an annual assessment fee by the
division sufficient to support the operational costs of the division stemming from this bill,
including costs of the Drug Affordability Council. The division is to remit any surplus
assessment fees collected during a calendar year to the reporting entities. The OLS at this point
cannot determine the annual operating costs of the division and the council stemming from
their duties under the bill or ascertain the revenues the State will receive from the annual
assessment fee.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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 The State also may collect an indeterminate amount of annual revenue from civil penalties
from reporting entities that do not comply the bill’s provisions, but a significant level of willful
non-compliance is not anticipated.
BILL DESCRIPTION
This bill establishes data reporting requirements for pharmacy benefits managers, wholesale
drug distributors, insurance carriers, and drug manufacturers so that the Division of Consumer
Affairs can issue an annual report on emerging trends in prescription drug pricing at each stage of
the supply chain. Every year these reporting entities must register with the division and fulfill
certain reporting requirements. Once the division compiles this information and publishes its
annual report on prescription drug pricing trends, it must hold a public hearing on the findings.
The bill establishes a Drug Affordability Council to formulate legislative and regulatory policy
recommendations that will protect New Jersey residents, the State and local governments, health
benefits plans, healthcare providers, licensed pharmacies, and other stakeholders within the State
health care system from the high costs of prescription drug products. The bill requires the council
to review the reports issued and data collected by the division pursuant to the bill and to submit
annually recommendations for legislative, regulatory, or other action to the Governor and the
Legislature that seek to advance the goal of more affordable and accessible prescription drugs for
New Jersey residents.
The bill requires reporting entities to pay an annual assessment set by the division to support
the operational costs of the division’s activities, including funding necessary to support the Drug
Affordability Council. Operational costs include staff salaries, administrative expenses, data
system expenses, and consulting fees of the division to effectuate the bill. The division is not
permitted to vary the amount of the annual assessments based on the type of reporting entity. If
the total assessment collected exceeds the operational costs of the division in a calendar year, the
division is required to remit the surplus back to the reporting entities.
The bill establishes civil penalties for failing to report as determined by the Division of
Consumer Affairs. Civil penalties may be imposed in the amount of $10,000 for the first day that
the reporting entity is found to be in violation and, for subsequent days of non-compliance, an
amount starting at $11,000 and increasing by $1,000 for each additional day of non-compliance,
not to exceed $100,000 per day.
The bill appropriates from the General Fund to the Division of Consumer Affairs in the
Department of Law and Public Safety $1.5 million to implement the provisions of the bill.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS finds that the bill will increase State expenditures by up to $1.5 million in FY 2024
for the implementation costs of the Division of Consumer Affairs related to the new data reporting
requirements established in the bill for drug manufacturers, insurance carriers, pharmacy benefits
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managers, drug wholesalers, and pharmacy services administrative organizations, and the creation
of the Drug Affordability Council. Thereafter, the State will incur indeterminate annual operating
costs for the council and the Division of Consumer Affairs, as the bill requires: 1) registration of
each reporting entity with the division and the establishment of a data reporting intake procedure;
2) an analysis of the submitted data and the issuance of an annual report; 3) the hosting of public
hearings on the findings; and 4) administratively supporting the Drug Affordability Council.
Each reporting entity enumerated above is to be charged an annual assessment fee by the
division sufficient to support the operational costs of the division as they relate to this bill,
including costs of the Drug Affordability Council. The OLS assumes that the division will begin
to levy the assessment fee in FY 2025 per the bill’s provisions. The division is to remit any surplus
assessment fees collected during a calendar year to the reporting entities. The OLS at this point
cannot determine the annual operating costs of the division and the council stemming from their
duties under the bill or ascertain the revenues the State will receive from the annual assessment
fee.
The State also may collect an indeterminate amount of annual revenue from civil penalties
from reporting entities that do not comply the bill’s provisions, but a significant level of willful
non-compliance is not anticipated. Civil penalties may be imposed in the amount of $10,000 for
the first day that the reporting entity is found to have violated the bill’s provisions and, for
subsequent days of non-compliance, an amount starting at $11,000 and increasing by $1,000 for
each additional day of non-compliance, not to exceed $100,000 per day.
Section: Law and Public Safety
Analyst: Kristin Brunner Santos
Lead Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).