This bill establishes a three-year Medicaid demonstration project in New Jersey aimed at implementing a value-based payment system for certain high-cost prescription drugs. The Department of Human Services will enter into purchasing or rebate agreements with manufacturers of at least three different drugs, with reimbursement based on the observed outcomes of the drugs' use in patients. The selected drugs will have specific therapeutic purposes and measurable outcomes, and the department will ensure that Medicaid managed care organizations participate in the project, outlining their obligations in contractual agreements.

Upon completion of the demonstration project, the Commissioner of Human Services is required to report to the Governor and the Legislature on the project's results, including recommendations for potential re-establishment or modifications. The report will include aggregated and de-identified performance test results to protect patient identities and comply with health information regulations. The act will take effect seven months after enactment and will expire three years after the project begins, although anticipatory administrative actions may be taken beforehand.