ASSEMBLY FINANCIAL INSTITUTIONS AND INSURANCE
COMMITTEE
STATEMENT TO
ASSEMBLY, No. 4953
with committee amendments
STATE OF NEW JERSEY
DATED: DECEMBER 9, 2024
The Assembly Financial Institutions and Insurance Committee
adopts amendments to Assembly Bill No. 4953.
As amended, this bill, the “Patient and Provider Protection Act,”
establishes certain requirements for pharmacy benefits managers
relating to contractual agreements with manufacturers and pharmacies.
Under the bill, pharmacy benefits managers have a fiduciary duty
to the long term health outcomes of covered persons. In addition,
pharmacy benefits managers are prohibited from engaging in any
marketing activity that uses inaccurate or misleading information to
convince or attempt to convince covered persons to use a contracted or
network pharmacy. Furthermore, the bill stipulates that an agreement
between a pharmacy benefits manager and a manufacturer is not valid
if the contract conditions any rebate on the exclusion of generic drugs
from coverage.
As it relates to pharmacy benefits managers and pharmacies, the
bill stipulates that a contract between a pharmacy benefits manager
and a contracted pharmacy or network pharmacy is, in the event of a
dispute, to be presumed to be a “contract of adhesion.” A contract of
adhesion is a standardized contract in which one party has significantly
superior bargaining power. In a contractual dispute involving a
contract of adhesion, the courts may subject the contract to special
scrutiny.
The bill also requires pharmacy benefits managers, for a
prescription drug, to reimburse:
(1) a contracted pharmacy or a network pharmacy at a rate that is
at least equal to the pharmacy’s cost of acquiring the prescription drug;
and
(2) an unaffiliated pharmacy at a rate that is up to five percent
lower than the lowest reimbursement rate provided to a contracted
pharmacy or a network pharmacy, but not less than the pharmacy’s
cost of acquiring the prescription drug.
The bill also stipulates that a pharmacy benefits manager may not
prohibit an unaffiliated pharmacy from offering a prescription drug to 2
a covered person in the same quantity and at the same price as a
contracted pharmacy or a network pharmacy.
Under the bill, a pharmacy and therapeutics committee is to ensure
that no decision concerning the inclusion of a prescription drug in a
formulary system, or in a particular tier of the formulary system,
places a prescription drug with a higher cost in a more favorable
position than a generic or biosimilar prescription drug with a lower
cost.
COMMITTEE AMENDMENTS :
The committee amended the bill to:
(1) require pharmacy benefits managers to disclose to the
department or the purchaser the amount of any fees paid by the
pharmacy benefits manager to a third party broker upon request;
(2) adjust the definition of “health benefits plan” to include self-
insured health benefits plans; and
(3) replace certain references to independent pharmacies with
references to unaffiliated pharmacies.