Trenton – Legislation sponsored by Senator Troy Singleton and Senator Shirley Turner, which would create more financial transparency in spread pricing among pharmacy benefits managers (PBM) within the Medicaid program, cleared the Senate today.
“The cost of prescription drugs has skyrocketed to the point where people are choosing to forgo their medications or skip other monthly bills. This is especially true for those with lower incomes and it is simply unacceptable,” said Senator Singleton. “By creating greater financial transparency in drug pricing among PBMs, we are driving down prices while simultaneously protecting our most vulnerable residents.”
“This is a consumer friendly piece of legislation that will protect families across the state from being taken advantage of,” said Senator Turner (D-Mercer/Hunterdon). “Prescription drug prices continue to rise and this is just one example of how the healthcare industry increases their profits by passing costs down to consumers. We must remain vigilant and continue to explore ways to address rising drug prices.”
The bill, S-249, would require a PBM providing services within the Medicaid program to disclose certain information to the Department of Human Services. This information would include all sources and amounts of income, payments, ingredients costs, dispensing fees, clawbacks and financial benefits received by the pharmacy benefits manager in relation to the provision and administration of pharmacy benefits management services on behalf of the managed care organization.
The Centers for Medicare and Medicaid Services define price spreading as when health plans contract with PBMs to manage their prescription drug benefits, and PBMs keep a portion of the amount paid to them by the health plans for prescription drugs instead of passing the full payments on to pharmacies. Thus, there is a spread between the amount that the health plan pays the PBM and the amount that the PBM reimburses the pharmacy for a beneficiary’s prescription.
The bill was released from Senate by a vote of 39-0.