The Patient and Provider Protection Act introduces new regulations for pharmacy benefits managers (PBMs) in New Jersey, emphasizing their fiduciary duty to prioritize the long-term health outcomes of covered individuals. The bill prohibits PBMs from using misleading marketing tactics to influence patients' choices regarding pharmacies and invalidates any agreements with manufacturers that condition rebates on the exclusion of generic drugs from coverage. Additionally, it establishes that contracts between PBMs and pharmacies will be presumed to be contracts of adhesion, which allows for greater scrutiny in disputes due to the imbalance of bargaining power.

The legislation also mandates that PBMs reimburse contracted and independent pharmacies fairly, ensuring that contracted pharmacies receive at least the cost of acquiring prescription drugs, while independent pharmacies can be reimbursed at a rate up to five percent lower than the lowest rate for contracted pharmacies, but not below their acquisition cost. Furthermore, the bill requires pharmacy and therapeutics committees to ensure that higher-cost prescription drugs are not favored over lower-cost generic or biosimilar options in formulary decisions. Key provisions include the insertion of language that prohibits PBMs from allowing conflicts of interest in their committees and mandates a flat fee compensation structure for PBMs, eliminating commission-based compensation.

Statutes affected:
Introduced: 17B:27F-3.3, 17B:27F-3.4