TRENTON – A bill sponsored by Senator Linda R. Greenstein that would create pricing transparency of generic prescription medicines filled by pharmacy benefits managers, which are often large-scale businesses that administer prescription drug benefits on behalf of a purchaser, is now law.
“For the first time in the state’s history, government oversight of generic drug pricing in the PBM Marketplace is mandated by statute. I am proud to be the sponsor of this new law which levels the playing field for independent community pharmacies that dispense generic medications,” said Senator Greenstein (D-Middlesex, Mercer).
The law, S-2301, requires PBMs to disclose the sources that they use to determine generic drug pricing. It also requires that pricing information be updated every seven days and that PBMs have a process in place for contracted pharmacies to more readily access relevant maximum allowable cost pricing lists and any successive pricing formulas. The law also requires PBMs to maintain a procedure to eliminate products from the list of drugs subject to this generic drug pricing or to modify maximum allowable cost rates in a timely manner.
Under the law, all contracts between a PBM and a contracted pharmacy must include a process to appeal, investigate, and resolve disputes regarding multiple source generic drug pricing. The law also prohibits a PBM from penalizing a pharmacist or pharmacy on audit if the pharmacist performs a generic substitution.
“This will ensure that the patients of New Jersey will have continued access to the best possible pharmaceutical care at the local level. With the bill’s signing yesterday, New Jersey became the 26th state in the nation to adopt similar legislation,” added Greenstein.
The law takes effect on the 90th day next following enactment and will apply to all contracts or agreements for pharmacy benefits management services that are executed or renewed on or after the effective date.