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 covered persons' choices regarding contracted or network pharmacies. Additionally, it invalidates any agreements between PBMs and manufacturers that condition rebates on the exclusion of generic drugs from coverage. The bill also 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.

Furthermore, the legislation 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. The bill also includes provisions requiring pharmacy and therapeutics committees to ensure that higher-cost prescription drugs are not favored over lower-cost generic or biosimilar options in formulary decisions. These changes aim to enhance transparency and fairness in the management of pharmacy benefits.

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