Sponsored by:
Assemblyman JOHN F. MCKEON
District 27 (Essex and Morris)
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblywoman GABRIELA M. MOSQUERA
District 4 (Camden and Gloucester)
Co-Sponsored by:
Assemblyman Benson, Assemblywomen Reynolds-Jackson and McKnight
SYNOPSIS
Establishes new transparency standards for pharmacy benefits manager business practices.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning pharmacy benefits managers and amending and supplementing P.L.2015, c.179.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.2015, c.179 (C.17B:27F-1) is amended to read as follows:
1. As used in [this act] P.L.2015, c.179 (C.17B:27F-1 et seq.):
"Anticipated loss ratio" means the ratio of the present value of the future benefits payments, including claim offsets after the point of sale, to the present value of the future premiums of a policy form over the entire period for which rates are computed to provide health insurance coverage.
"Average wholesale price" means the average wholesale price of a prescription drug determined by a national drug pricing publisher selected by a carrier. The average wholesale price shall be identified using the national drug code published by the National Drug Code Directory within the United States Food and Drug Administration.
"Brand-name drug" means a prescription drug marketed under a proprietary name or registered trademark name, including a biological product.
"Carrier" means an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State.
Compensation means any direct or indirect financial benefit, including, but not limited to, rebates, discounts, credits, fees, grants, chargebacks or other payments or benefits of any kind.
"Contracted pharmacy" means a pharmacy that participates in the network of a pharmacy benefits manager through a contract with:
a. the pharmacy benefits manager directly;
b. a pharmacy services administration organization; or
c. a pharmacy group purchasing organization.
"Cost-sharing amount" means the amount paid by a covered person as required under the covered person's health benefits plan for a prescription drug at the point of sale.
"Covered person" means a person on whose behalf a carrier or other entity, who is the sponsor of the health benefits plan, is obligated to pay benefits pursuant to a health benefits plan.
Department means the Department of Banking and Insurance.
"Drug" means a drug or device as defined in R.S.24:1-1.
"Health benefits
plan" means a benefits plan which pays hospital or medical expense
benefits for covered services, or prescription
drug benefits for covered services, and is delivered or issued for delivery in this State by or through a carrier or any other sponsor. For the purposes of P.L.2015, c.179 (C.17B:27F-1), health benefits plan shall not include the following plans, policies or contracts: accident only, credit disability, long-term care, Medicare supplement coverage; TRICARE supplement coverage, coverage for Medicare services pursuant to a contract with the United States government, the State Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.), coverage arising out of a worker's compensation or similar law, the State Health Benefits Program, the School Employees' Health Benefits Program, or a self-insured health benefits plan governed by the provisions of the federal "Employee Retirement Income Security Act of 1974," 29 U.S.C. s.1001 et seq., coverage under a policy of private passenger automobile insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.), or hospital confinement indemnity coverage.
"Mail order pharmacy" means a pharmacy, the principle business of which is to receive a prescription by mail, fax or electronic submission, and to dispense medication to a covered person using the United States Postal Service or other common or contract carrier service and that provides consultation with patients electronically rather than in person.
"Maximum allowable cost" means the maximum amount a health insurer will pay for a generic drug or brand-name drug that has at least one generic alternative available.
"Network pharmacy" means a licensed retail pharmacy or other pharmacy provider that contracts with a pharmacy benefits manager.
"Pharmacy" means any place in the State, either physical or electronic, where drugs are dispensed or pharmaceutical care is provided by a licensed pharmacist, but shall not include a medical office under the control of a licensed physician.
"Pharmacy benefits manager" means a corporation, business, or other entity, or unit within a corporation, business, or other entity, that, pursuant to a contract or under an employment relationship with a carrier, a self-insurance plan or other third-party payer, either directly or through an intermediary, administers prescription drug benefits on behalf of a purchaser.
"Pharmacy benefits manager compensation" means the difference between: (1) the value of payments made by a carrier of a health benefits plan to its pharmacy benefits manager; and (2) the value of payments made by the pharmacy benefits manager to dispensing pharmacists for the provision of prescription drugs or pharmacy services with regard to pharmacy benefits covered by the health benefits plan.
"Pharmacy benefits management services" means the provision of any of the following services on behalf of a purchaser: the procurement of prescription drugs at a negotiated rate for dispensation within this State; the processing of prescription drug claims; or the administration of payments related to prescription drug claims.
"Prescription" means a prescription as defined in section 5 of P.L.1977, c.240 (C.24:6E-4).
"Prescription drug benefits" means the benefits provided for prescription drugs and pharmacy services for covered services under a health benefits plan contract.
"Purchaser" means any sponsor of a health benefits plan who enters into an agreement with a pharmacy benefits management company for the provision of pharmacy benefits management services to covered persons.
(cf: P.L.2019, c.274, s.2)
2. (New section) a. A corporation, business, or other entity shall not act as a pharmacy benefits manager in this State without first obtaining a license from the department. An applicant for licensure as a pharmacy benefits manager shall provide to the department information that includes, but is not limited to, the following:
(1) the name of the applicant;
(2) the address and telephone number of the applicant;
(3) the name and address of the applicant's agent for service of process in the State;
(4) the na