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Mukherji, Downey & Houghtaling Bill to Require Greater Transparency, Protections for Retail Pharmacies Signed into Law

New Statute Prohibiting Pharmacy Benefits Managers (PBMs) 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 A-3717 to prohibit after-the-fact changes in the payments owed to pharmacies is now law.

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

Sponsors, 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. In July of 2019, similar legislation concerning PBMs advanced through the U.S. Senate Finance Committee and now awaits further federal action.