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S3212
SENATE, No. 3212
STATE OF NEW JERSEY
222nd LEGISLATURE
�
INTRODUCED JANUARY 28, 2026
Sponsored by:
Senator� TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
���� �New Jersey Pharmacy Fair Reimbursement and
Anti-Steering Act.�
CURRENT VERSION OF TEXT
���� As introduced.
��
An Act
concerning pharmacy benefits managers and
amending and supplementing various parts of the statutory law.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� Section 3 of P.L.2023,
c.106 (C.45:14-82.4) is amended to read as follows:
���� 3.��� a.� A pharmacy benefits
manager shall, to the extent allowed by law, report to the division the
following minimum data, and other data that may be specified by the division.
The division shall annually notify pharmacy benefits managers of the specific
drugs or drug groups for which reporting is required and a pharmacy benefits
manager shall have 60 days following such notification to report to the
division the following:
���� (1) minimum and maximum WAC
,
and total acquisition cost,
for each indicated drug and drug group for
which the pharmacy benefits manager has negotiated directly with the
manufacturer in the last calendar year, related to prescriptions under an
insurance policy issued in the State;
���� (2) volume in pricing units of
each indicated drug and drug group that the pharmacy benefits manager
negotiated directly with the manufacturer in the last calendar year, for
business in the State, in total and for each payer type as relevant;
���� (3) total rebates, discounts,
and price concessions received or negotiated directly with the manufacturer for
each drug and drug group
as indicated by the division
in the last calendar year
, for business in the State, in total and for each
payer type as relevant;
���� (4)
total rebates,
discounts, and price concessions received by the manufacturer and remitted to a
carrier or covered person for each drug and drug group as indicated by the
division in the last calendar year, for business in the State, in total and for
each payer type as relevant;
����
(5)
total discounts,
dispensing fees, and other fees negotiated last year with pharmacies,
prescription drug networks, or pharmacy services administrative organizations
for each drug and drug group as indicated by the division in the last calendar
year, for business in the State, in total and for each payer type as relevant;
and
����
[
(5)
]
(6)
total net income
received in the last calendar year for each drug and drug group as indicated by
the division, for business in the State, in total and for each payer type as
relevant.
���� b.���
A pharmacy benefits
manager shall additionally report annually to the division, in a form and
manner prescribed by the division:
����
(1)�� prior authorization,
step therapy, and denial metrics for each drug and drug group required to be
reported to the division pursuant to subsection a. of this section; and
����
(2)�� the total amount of
spread pricing revenue earned by the pharmacy benefits manager in the past
calendar year.
����
c.
���� Disclosure of
all information reported under this section shall be subject to protections
defined in section 9 of P.L.2023, c.106 (C.45:14-82.10).
(cf: P.L.2023, c.106, s.3)
���� 2.��� Section 1 of P.L.2015,
c.179 (C.17B:27F-1) is amended to read as follows:
���� 1.��� As used in P.L.2015,
c.179 (C.17B:27F-1 et seq.):
���� "Anticipated loss
ratio" means the ratio of the present value of the future benefits
payments, including claim offsets after the point of sale, to the present value
of the future premiums of a policy form over the entire period for which rates are
computed to provide health insurance coverage.
���� "Average wholesale
price" means the average wholesale price of a prescription drug determined
by a national drug pricing publisher selected by a carrier.� The average
wholesale price shall be identified using the national drug code published by
the National Drug Code Directory within the United States Food and Drug
Administration.
���� "Brand-name drug"
means a prescription drug marketed under a proprietary name or registered
trademark name, including a biological product.
���� "Carrier" means an
insurance company, health service corporation, hospital service corporation,
medical service corporation, or health maintenance organization authorized to
issue health benefits plans in this State.
���� "Contracted
pharmacy" means a pharmacy that participates in the network of a pharmacy
benefits manager through a contract with:
���� a.���� the pharmacy benefits
manager directly;
���� b.��� a pharmacy services
administration organization; or
���� c.���� a pharmacy group
purchasing organization.
���� "Cost-sharing
amount" means the amount paid by a covered person as required under the
covered person's health benefits plan for a prescription drug at the point of
sale.
���� "Covered person"
means a person on whose behalf a carrier or other entity, who is the sponsor of
the health benefits plan, is obligated to pay benefits pursuant to a health
benefits plan.
���� "Department" means
the Department of Banking and Insurance.
���� "Drug" means a drug
or device as defined in R.S.24:1-1.
���� "Health benefits
plan" means a benefits plan which pays hospital or medical expense
benefits for covered services, or prescription drug benefits for covered
services, and is delivered or issued for delivery in this State by or through a
carrier or any other sponsor.� For the purposes of P.L.2015, c.179
(C.17B:27F-1), health benefits plan shall not include the following plans,
policies or contracts: accident only, credit disability, long-term care,
Medicare supplement coverage; TRICARE supplement coverage, coverage for
Medicare services pursuant to a contract with the United States government, the
State Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et
seq.), coverage arising out of a worker's compensation or similar law, the
State Health Benefits Program, the School Employees' Health Benefits Program,
or a self-insured health benefits plan governed by the provisions of the
federal "Employee Retirement Income Security Act of 1974," 29 U.S.C.
s.1001 et seq., coverage under a policy of private passenger automobile
insurance issued pursuant to P.L.1972, c.70 (C.39:6A-1 et seq.), or hospital
confinement indemnity coverage.
���� "Maximum allowable
cost" means the maximum amount a health insurer will pay for a generic
drug or brand-name drug that has at least one generic alternative available.
���� "Network pharmacy"
means a licensed retail pharmacy or other pharmacy provider that contracts with
a pharmacy benefits manager either directly or by and through a contract with a
pharmacy services administrative organization.
���� "Pharmacy" means any
place in the State, either physical or electronic, where drugs are dispensed or
pharmaceutical care is provided by a licensed pharmacist, but shall not include
a medical office under the control of a licensed physician.
���� "Pharmacy benefits
manager" means a corporation, business, or other entity, or unit within a
corporation, business, or other entity, that, pursuant to a contract or under
an employment relationship with a carrier, a self-insurance plan or other
third-party payer, either directly or through an intermediary, administers
prescription drug benefits on behalf of a purchaser.
���� "Pharmacy benefits
manager compensation" means the difference between: (1) the amount of
payments made by a carrier of a health benefits plan to its pharmacy benefits
manager; and (2) the value of payments made by the pharmacy benefits manager to
dispensing pharmacists for the provision of prescription drugs or pharmacy
services with regard to pharmacy benefits covered by the health benefits plan.
���� "Pharmacy benefits
management services" means the provision of any of the following services
on behalf of a purchaser: the procurement of prescription drugs at a negotiated
rate for dispensation within this State; the processing of prescription drug
claims; or the administration of payments related to prescription drug claims.
���� "Pharmacy services
administrative organization" means an entity operating within the State
that contracts with independent pharmacies to conduct business on their behalf
with third-party payers.
���� "Prescription" means
a prescription as defined in section 5 of P.L.1977, c.240 (C.24:6E-4).
���� "Prescription drug
benefits" means the benefits provided for prescription drugs and pharmacy
services for covered services under a health benefits plan contract.
���� "Purchaser" means
any sponsor of a health benefits plan who enters into an agreement with a
pharmacy benefits management company for the provision of pharmacy benefits
management services to covered persons.
����
�Spread pricing� means any
amount charged or claimed by the pharmacy benefits manager in excess of the
amount paid to pharmacies on behalf of purchasers.
(cf: P.L.2023, c.107, s.1)
���� 3.��� (New section) a.�
Compensation that a pharmacy benefits manager remits to a carrier under
contract with the pharmacy benefits manager shall be:
���� (1)��
remitted
directly to a covered person to reduce the covered person�s out-of-pocket costs
for a prescription drug at the point of sale; or
���� (2)�� retained and applied by
the contracted carrier in its plan design to offset premiums for covered
persons.
���� b.��� A used in this section,
�compensation� means any direct or indirect financial benefit related to the
provision and administration of pharmacy benefits management services,
including but not limited to pricing discounts, rebates, fees, or incentives.
���� 4.��� (New section) a.�
In a contract for pharmacy benefits management services
between a pharmacy benefits manager and the State Health Benefits Program,
School Employees� Health Benefits Program, or NJ FamilyCare program
,
compensation to a pharmacy benefits manager shall be based on a pass-through
pricing model.� A pharmacy benefits manager shall:
���� (1)�� receive payment that is
limited to the ingredient cost plus dispensing fee; and
���� (2)�� identify all sources and
amounts of income, payments, and financial benefits related to the provision
and administration of pharmacy benefits management services on behalf of the
State Health Benefits Program, School Employees� Health Benefits Program, or NJ
FamilyCare program, including but not limited to any pricing discounts,
rebates, fees, or incentives, and ensure that any benefits identified pursuant
to this paragraph are passed through to the State Health Benefits Program,
School Employees� Health Benefits Program, or NJ FamilyCare program to reduce
the ingredient cost.
���� b.��� A pharmacy benefits
manager shall identify and disclose to the department and to the State Health Benefits
Program, School Employees� Health Benefits Program, or NJ FamilyCare program,
on an annual basis:
���� (1)�� the sources and amounts
of income, payments, and financial benefits received by the pharmacy benefits
manager pursuant to paragraph (2) of subsection a. of this section; and
���� (2)�� the ingredient costs and
dispensing fees or similar payments made by the pharmacy benefits manager to a
pharmacy in connection with a contract pursuant to subsection a. of this
section.
���� c.���� A pharmacy benefits
manager shall not utilize spread pricing in a contract between the pharmacy
benefits manager and the State Health Benefits Program, School Employees�
Health Benefits Program, and State Medicaid and NJ FamilyCare programs.�
���� d.��� As used in this section,
�spread pricing� means any amount charged or claimed by the pharmacy benefits
manager in excess of the amount paid to pharmacies on behalf of the State
Health Benefits Program, School Employees� Health Benefits Program, and State
Medicaid and NJ FamilyCare programs.
���� 5.��� (New section) a. In a
contract for pharmacy benefits management services between a pharmacy benefits
manager and the State Health Benefits Program, School Employees� Health
Benefits Program, or �NJ FamilyCare program, the pharmacy benefits manager
shall reimburse contracted or independent pharmacies for a prescription drug at
a rate that:
���� (1)�� is at least equal to the
National Average Drug Acquisition Cost (NADAC) for the dispensed prescription
drug ingredients; and
���� (2)�� includes a reasonable
and adequate dispensing fee determined by the department, in consultation with
the Department of Health and State pharmacy advocacy groups.� The department
shall adjust the dispensing fee annually to account for inflation, using the
United States Bureau of Labor Statistics� Consumer Price Index for Medical Care
or equivalent healthcare cost index.
���� If the NADAC is not available
at the time a prescription drug is dispensed, a pharmacy benefits manager shall
not reimburse the drug in an amount that is less than the wholesale average
cost.
���� b.��� A pharmacy benefits
manager shall maintain NADAC-based rate methodologies for periodic review by
the department, in a time and manner as determined by the department.
���� 6.��� (New section) A pharmacy
benefits manager under contract with a carrier, that has established a pharmacy
and therapeutics committee to manage a formulary system pursuant to section 7
of P.L.2023, c.107 (C.17B:27F-3.3), shall make available on its Internet
website a price comparison tool that allows a covered person to view and
compare the cost of a brand-name drug found on the formulary system with the
cost of the drug�s generic or therapeutic equivalent, regardless of the
placement of the generic or therapeutic drug on the formulary system.�
���� 7.��� (New section) a.� A
pharmacy benefits manager shall not require or incentivize a covered person to:
���� (1)�� use a pharmacy,
including a mail-order or specialty pharmacy, in which the pharmacy benefits
manager or its affiliate maintains an ownership interest or control, unless a
covered person consents to use a pharmacy in which the pharmacy benefits
manager or its affiliate maintains an ownership interest or control; or
���� (2)�� use a mail-order pharmacy
to order non-specialty prescription drugs.
���� b.��� A contracted pharmacy
shall be reimbursed at the same reimbursement rate, regardless of the ownership
or affiliation of the contracted pharmacy.�
���� 8.��� (New section) A pharmacy
benefits manager shall
ensure that a retail pharmacy
under contract with a pharmacy benefits manager�s network is no farther than five
miles of a covered person residing in an urban area or 10 miles of a covered
person residing in a rural area.
���� 9.��� (New section) a.� When
conducting an audit of a pharmacy under contract with a pharmacy benefits
manager�s network, a pharmacy benefits manager shall:
���� (1)�� notify the pharmacy no
later than 15 days before the date of the initial audit.� Notification to the
contracted pharmacy shall be in writing, delivered either by certified mail or
electronically, and addressed to the supervising pharmacist of record and to the
pharmacy corporate office, if applicable;
���� (2)�� limit the audit period
to 24 months after the date a claim is submitted to or adjudicated by the
pharmacy benefits manager;
���� (3)�� include in the written
advance notice of the audit the list of specific prescription numbers to be
included in the audit if applicable;
���� (4)�� use the written and
verifiable records of a licensed hospital, physician, or other health care
provider, which are transmitted by any means of communication, to validate
pharmacy records in accordance with State or federal law;
���� (5)�� limit the number of
prescriptions audited to no more than 100 prescriptions randomly selected in a 12-month
period, unless fraudulent activity or systemic abuse is reasonably suspected;
���� (6)�� provide the pharmacy
with a copy of the preliminary audit report no later than 45 days after the
conclusion of the audit;
���� (7)�� provide the pharmacy
with the ability to provide documentation to address a discrepancy or audit
finding, provided that the documentation must be received by the pharmacy
benefits manager no later than the 45th day after the preliminary audit report
was provided to the pharmacy or its contracting agent.� The pharmacy benefits
manager shall consider a reasonable request from the pharmacy for an extension
of time to submit documentation to address or correct any findings in the
report;
���� (8)�� provide the pharmacy
with the final audit report no later than 60 days after the preliminary audit
report was provided to the pharmacy.
���� b.��� A pharmacy benefits
manager conducting an audit of a contracted pharmacy pursuant to subsection a.
of this section shall not:
���� (1)�� conduct more than two
audits per 12 month period, unless fraudulent activity or other systemic abuse
is reasonably suspected; or
���� (2)�� recoup funds for
clerical or record-keeping errors, including typographical errors; scriveners�
errors; and computer errors on a required document or record, unless the error
resulted in overpayment or clinical harm.
���� c.���� (1)� The department
shall adopt rules and regulations, pursuant to the �Administrative Procedure
Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), as is necessary to implement subsections
a. and b. of this section, and shall include a uniform appeal process for a pharmacy
seeking to appeal a final audit report issued by a pharmacy benefits manager
pursuant to subsection a. of this section.� The appeal process established
pursuant to this subsection shall include an independent dispute resolution
component.
���� (2)�� The Division of Consumer
Affairs within the Department of Law and Public Safety, in consultation with
the New Jersey State Board of Pharmacy, shall suspend the authority of a
pharmacy benefits manager to conduct an audit of a contracted pharmacy pursuant
to subsection a. of this section, if the division finds that there is a
violation of the audit authority provided to the pharmacy benefits manager
pursuant to subsection a. of this section.� A pharmacy benefits manager
suspended pursuant to this paragraph may be reinstated by the division after a suspension
period determined by the division.
���� 10.� (New section) The
department shall prepare and publish annually for the Governor and, pursuant to
section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature a report:
���� a.���� analyzing pharmacy
benefits management industry practices, including reimbursement trends;
���� b.��� identifying systemic
issues affecting the pharmacy benefits management industry, including whether
pharmacy benefits manager practices are contributing to pharmacy closures or
limited access areas in the State; and
���� c.���� issuing legislative
recommendations that the department determines are necessary to address
identified issues within the pharmacy benefits manager industry.
���� 11.� (New Section) a. �There
is established within the Insurance Division of the Department of Banking and
Insurance, the Pharmacy Benefits Manager Compliance and Enforcement Unit.� The
unit shall operate under the supervision of the commissioner and shall:
���� (1)�� produce market conduct
examinations of pharmacy benefits managers licensed in the State;
���� (2)�� enforce and ensure
compliance with P.L.2015, c.179 (C.17B:27F-1 et seq.) and any rules and
regulations established thereunder;
���� (3)�� conduct investigations
of pharmacy benefits managers pursuant to paragraph (2) of this subsection.� The
unit may issue subpoenas to compel the attendance of witnesses and the
production of any documents relevant to an investigation;
���� (4)�� upon a finding of a
violation of P.L.2015, c.179 (C.17B:27F-1 et seq.), issue penalties pursuant to
subsection a. of section 7 of P.L.2019, c.274 (C.17B:27F-10) and order, if
necessary, restitution to a contracted pharmacy for payments that are below the
pharmacy�s cost for a prescription drug; and
���� (5)�� suspend or revoke a
pharmacy benefits manager license pursuant to subsection f. of P.L.2023, c.107
(C.17B:27F-1.1).
���� b.��� The unit shall publish,
on the Internet website of the department, an annual report summarizing the
enforcement actions that it has completed in the past year.� The report shall
include the total amount of penalties collected in the past year.
���� c.���� The department shall
establish a link on the Internet website of the department to allow pharmacies
and consumers to submit complaints to the unit regarding the conduct of a
pharmacy benefits manager.
���� d.��� The department shall
adopt, pursuant to the �Administrative Procedure Act,� P.L.1968, c.410
(C.52:14B-1 et seq.), rules and regulations as is necessary to implement the
provisions of this section.
���� 12.� This act shall take
effect on the first day of the twelfth month next following the date of
enactment and shall apply to contracts and agreements entered into, renewed,
modified, or amended on or after the effective date, but the Commissioner of
Banking and Insurance and the Attorney General may take such anticipatory
administrative action as is necessary for the implementation of this act.
STATEMENT
���� This bill establishes the �New
Jersey Pharmacy Fair Reimbursement and Anti-Steering Act.�
���� Under the bill, compensation
that a pharmacy benefits manager remits to a carrier under contract with the
pharmacy benefits manager will be remitted directly to a covered person to
reduce the covered person�s out-of-pocket costs for a prescription drug at the
point of sale or retained and applied by the contracted carrier in its plan
design to offset premiums for covered persons.�
���� The bill prohibits spread
pricing in a contract between a pharmacy benefits manager and the State Health
Benefits Program, School Employees� Health Benefits Program, and NJ FamilyCare
programs and requires that compensation to a pharmacy benefits manager must be
based on a pass-through pricing model in which a pharmacy benefits manager
must:
���� (1)�� receive payment that is
limited to the ingredient cost plus dispensing fee; and
���� (2)�� identify all sources and
amounts of income, payments, and financial benefits related to the provision
and administration of pharmacy benefits management services on behalf of the
State Health Benefits Program or School Employees� Health Benefits Program,
including but not limited to any pricing discounts, rebates, fees, or
incentives, and ensure that any benefits identified pursuant to this paragraph
are passed through to the State Health Benefits Program or School Employees�
Health Benefits Program to reduce the ingredient cost.
���� The bill provides that a
pharmacy benefits manager must reimburse contracted or independent pharmacies,
for a prescription drug, at a rate that:
���� (1)�� is at least equal to the
National Average Drug Acquisition Cost (NADAC) for the dispensed prescription
drug ingredients; and
���� (2)�� includes a reasonable
and adequate dispensing fee determined by the department, in consultation with
the Department of Health and State pharmacy advocacy groups.� The department will
adjust the dispensing fee annually to account for inflation, using the United
States Bureau of Labor Statistics� Consumer Price Index for Medical Care or
equivalent healthcare cost index.
���� If the NADAC is not available
at the time a prescription drug is dispensed, a pharmacy benefits manager will
be prohibited from reimbursing the drug in an amount that is less than the
wholesale average cost.
���� The bill additionally provides
anti-steering and geographic pharmacy access standards that prohibit a pharmacy
benefits manager from requiring or incentivizing a covered person to:
���� (1)�� use a pharmacy,
including a mail-order or specialty pharmacy, in which the pharmacy benefits
manager or its affiliate maintains an ownership interest or control; or
���� (2)�� use a mail-order pharmacy
to order non-specialty prescription drugs.
���� A pharmacy benefits manager
will also be required to ensure that a retail pharmacy, under contract with a
pharmacy benefits manager network, is no farther than five miles of a covered
person residing in an urban area or 10 miles of a covered person residing in a
rural area.
���� The bill further provides for
pharmacy-side audit protections.� These protections:
���� (1)�� limit audits of
pharmacies to two per 12-month period, absent fraud or other systemic abuse;
���� (2)�� prohibit recoupments for
clerical or recordkeeping errors that do not lead to financial loss or clinical
harm; and
���� (3)�� require advance notice
for initial audits, among other provisions.
���� Finally, the bill requires:
���� (1)�� a pharmacy benefits
manager to establish a price comparison tool allowing covered persons to view
and compare the cost of a brand-name drug with the cost of the drug�s generic
or therapeutic equivalent;
���� (2)�� the establishment of an
annual report written by DOBI analyzing pharmacy benefits management industry
practices and identifying systemic issues affecting the pharmacy benefits
management industry;
���� (3)�� the establishment of a
Pharmacy Benefits Manager Compliance and Enforcement Unit to enforce compliance
with certain pharmacy benefits manager laws and regulations; and
���� (4)�� certain data and
reporting requirements.