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Mukherji, Downey & Houghtaling Bill to Require Greater Transparency, Protections for Retail Pharmacies in NJ Passes Assembly

Measure to Prohibit Pharmacy Benefits Managers Making Retroactive Reductions in Claim Payments to Pharmacies

Strengthening the transparency of transactions between pharmacies and pharmacy benefits managers (PBMs), who help negotiate drug purchases for insurers and buyers, a bill to prohibit after-the-fact changes in the payments owed to pharmacies was approved 71-0-2 in the full Assembly on Monday.

The bill (A-3717) would serve to limit the ability of PBMs to retroactively reduce payments on a properly filed claim for payment by a pharmacy and more generally creates mechanisms for greater transparency of PBM compensation programs.

Sponsors of the bill, Assembly Democrats Raj Mukherji (D-Hudson), Joann Downey (D-Monmouth) and Eric Houghtaling (D-Monmouth), released the following joint statement:

“PBMs leveraging their position in the supply chain to unfairly claw back money from pharmacists has contributed to rising prices of prescription medication for countless New Jersey families and seniors.

“Due to the lack of transparency in PBM negotiations, many pharmacies are now saddled with retroactive fees charged months after claims were initially made. This unpredictability has forced pharmacies to make a choice. Raise prices, which means passing costs onto consumers, or close up shop, which leaves communities underserved.”

As of May 2019, 33 states legislatures have enacted laws regulating the role of PBMs, Montana, New Mexico and Wyoming being the most recent among them. And in July 2019, similar legislation concerning PBMs was moved through the U.S. Senate Finance Committee and now awaits further federal action.

The bill now goes to the Senate for further review.