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 to choose 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 legislation also establishes that contracts between PBMs and pharmacies will be presumed to be contracts of adhesion, which allows for special scrutiny in disputes due to the imbalance of bargaining power.

Furthermore, the bill mandates that PBMs reimburse contracted and network pharmacies at rates that cover their acquisition costs for prescription drugs, while independent pharmacies can be reimbursed at rates up to five percent lower than those for contracted pharmacies, but not below their acquisition costs. The bill also includes provisions to ensure that pharmacy and therapeutics committees do not favor higher-cost prescription drugs over lower-cost generics or biosimilars in formulary decisions. Notably, the bill introduces a requirement that PBM compensation must be structured as a flat fee, eliminating commission-based compensation models.

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