Trenton – As part of a continued effort to reduce prescription drug costs, the Senate Budget Committee advanced legislation today sponsored by Senator Troy Singleton and Senator Nellie Pou which would require carriers to pass on prescription drug savings to consumers.
“Healthcare and life-saving medicines should not put someone who is sick in the poorhouse,” said Senator Singleton (D-Burlington). “Over $450 billion is spent at pharmacies each year, with the majority of those funds being processed by pharmacy benefit managers. Pharmacy benefit managers act as the middlemen in negotiating rebates off of the list prices marketed by drug manufacturers. This bill ensures that pharmacy benefit managers are ethical in their negotiations, passing on the best deals they can to policyholders.”
The bill, S-1423, would require all rebates or other compensation paid by a pharmaceutical manufacturer to a pharmacy benefits manager (PBM) be passed on to the carrier and used to lower the premium for covered individuals.
“In 2019, a study found that the costs of oral and injectable name brand drugs increased by 9.2 percent and 15.1 percent respectively, between the years of 2008 to 2016,” said Senator Pou (D-Bergen/Passaic). “Part of the reason behind the rising prices is due to the rising rebates demanded by pharmacy benefit managers. While these rebates can be beneficial to consumers, it is imperative that we do whatever we can to help people maximize their pharmacy savings and ensure all cost savings are passed on to policyholders.”
Additionally, the bill would require the carrier to file an annual report with the Department of Banking and Insurance demonstrating how they are complying with the bill.
The bill was released from committee by a vote of 12-0 and now heads to the full Senate for further consideration.