Regulates certain practices of pharmacy benefits managers and health insurance carriers.

S3573

SENATE, No. 3573

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Senator� LINDA R. GREENSTEIN

District 14 (Mercer and Middlesex)

SYNOPSIS

���� Regulates certain practices of pharmacy benefits
managers and health insurance carriers.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning pharmacy benefits managers and health
insurance carriers and supplementing P.L.2015, c.179 (C.17B:27F-1 et seq.).

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� The Legislature finds
and declares that:

���� a.���� The practice of
steering by a pharmacy benefits manager represents a conflict of interest;�

���� b.��� These practices have
resulted in harm, including increasing drug prices, overcharging covered
persons and carriers, restricting or underpaying covered persons� choice of
pharmacies and fragmenting and creating barriers to care, particularly in rural
New Jersey and for patients battling life-threatening illnesses and chronic
diseases; and�

���� c.���� Imposing a surcharge on
pharmacy benefits managers that engage in steering in this State may encourage carriers
to use pharmacy benefits managers committed to refraining from steering
practices.

���� 2.��� As used in this act:

���� �Commissioner� means the
Commissioner of Banking and Insurance.

���� �Credentialing� means the
process of assessing and validating the qualifications of a health care
provider including, but not limited to, an evaluation of licensure status,
education, training, experience, competence and professional judgement.

���� �Department� means the
Department of Banking and Insurance.

���� �Health care provider"
means an individual, which, acting within the scope of its licensure or
certification, provides health care services, and includes, but is not
limited to: a physician, dentist, nurse, pharmacist or other health care professional and

whose professional practice is regulated pursuant to Title 45 of the
Revised Statutes. �Health care provider� shall also mean a hospital or
other health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et
seq.)

���� �Medicaid� means the program
established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

���� �National average drug
acquisition cost� means the monthly survey of retail pharmacies conducted by
the federal Centers for Medicare and Medicaid Services to determine average
acquisition cost for Medicaid covered outpatient drugs.

���� �Steering� means a practice
employed by a pharmacy benefit manager or health carrier that channels a
prescription to an affiliated pharmacy, or pharmacy in which a pharmacy
benefits manager or carrier has an ownership interest, and includes but is not
limited to retail, mail-order, or specialty pharmacies.

���� 3.��� A pharmacy benefits
manager shall:

���� a.���� not require a covered
person to use a mail-order pharmaceutical distributor, including a mail-order
pharmacy;

���� b.��� offer a health benefits
plan the option of charging such health plan the same price for a prescription
drug as it pays a pharmacy for the prescription drug; provided, however, that a
pharmacy benefits manager shall charge a health benefits plan, the same price
for a prescription drug as it pays a pharmacy for the prescription drug;

���� c.���� report in the aggregate
to a health benefits plan the difference between the amount a pharmacy benefits
manager reimbursed a pharmacy and the amount a pharmacy benefits manager
charged a health benefits plan; and

���� d.��� when calculating a covered
person's contribution to any out-of-pocket maximum, deductible, or copayment
responsibility, include any amount paid by the covered person or paid on his or
her behalf through a third-party payment, financial assistance, discount, or
product voucher for a prescription drug that does not have a generic equivalent
or that has a generic equivalent but was obtained through prior authorization,
a step therapy protocol, or the carrier�s exceptions and appeals process.�
Nothing in this subsection shall be construed to require that a pharmacy
benefits manager accept a third-party payment, financial assistance, discount,
or product voucher submitted on behalf of a covered person.

���� 4.��� A pharmacy benefits
manager shall be proscribed from:�

���� a.���� prohibiting a
pharmacist or pharmacy from providing a covered person information on the
amount of the covered person�s cost sharing for the covered person�s
prescription drug and the clinical efficacy of a more affordable alternative drug
if one is available;

���� b.��� charging or collecting
from a covered person a copayment that exceeds the total submitted charges by
the network pharmacy for which the pharmacy is paid;

���� c.���� transferring or sharing
records relative to prescription information containing patient-identifiable
and prescriber-identifiable data to an affiliated pharmacy for any commercial
purpose; provided, however, that nothing shall be construed to prohibit the
exchange of prescription information between a pharmacy benefits manager and an
affiliated pharmacy for the limited purposes of pharmacy reimbursement,
formulary compliance, pharmacy care, or utilization review;

���� d.��� knowingly making a
misrepresentation to a covered person, pharmacist or pharmacy;

���� e.���� charging a pharmacy a
fee in connection with network enrollment;

���� f.���� removing a drug from a
formulary or denying coverage of a drug for the purpose of incentivizing a
covered person to seek coverage from a different health plan; and

���� g.��� withholding coverage or
requiring prior authorization for a lower cost, therapeutically equivalent drug
available to a covered person or failing to reduce a covered person�s cost sharing
amount when a covered person selects a lower cost, therapeutically equivalent
drug.�

���� 5.��� a. A pharmacy benefits
manager that engages in the practice of steering or imposing point-of-sale fees
or retroactive fees shall be subject to a surcharge payable to the State of 10
percent on the aggregate dollar amount it reimbursed pharmacies in the
previous� calendar year for prescription drugs.�

���� b���� Any person operating a
health benefits plan and licensed under this title whose contracted pharmacy
benefits manager engages in the practice of steering in connection with its
health benefits plans shall be subject to a surcharge payable to the State of
10 percent on the aggregate dollar amount its pharmacy benefits manager
reimbursed pharmacies on its behalf in the previous calendar year for
prescription drugs.

���� c.���� On March 1 of each
year, a pharmacy benefits manager or any other person operating a health
benefits plan that utilizes a contracted pharmacy benefits manager shall
provide a letter to the commissioner attesting as to whether or not, in the
previous calendar year, it engaged in the practice of steering. The pharmacy
benefits manager shall also submit to the commissioner, in a form and manner specified
by the commissioner, data detailing all prescription drug claims it
administered for covered persons on behalf of each health plan client and any
other data the commissioner deems necessary to evaluate whether a pharmacy benefits
manager is engaged in the practice of steering.� Such data shall be
confidential and not be subject to P.L.1963, c.73 (C.47:1A-1 et seq.);
provided, however, that the commissioner shall prepare an aggregate report
reflecting the total number of prescriptions administered by the reporting
pharmacy benefits manager on behalf of all health plans in the State along with
the total sum due to the State. The department shall have access to all confidential
data collected by the Commissioner for audit purposes.�

���� d.��� On April 1 of each year,
a pharmacy benefits manager or other person operating a health benefits plan
and licensed under this title shall pay into the general fund of the State
treasury the surcharge owed, if any, as contained in the report submitted
pursuant to subsection c. of this section.�

���� e.���� Nothing in this section
shall be construed to authorize the practice of steering where otherwise
prohibited by law.

���� 6.��� A carrier or pharmacy
benefits manager shall not require satisfaction of pharmacy accreditation
standards or recertification requirements in order to participate in a network
which is inconsistent with, more stringent than, or in addition to, the federal
and State requirements for a pharmacy in this State.

���� 7.��� a.�
A carrier or pharmacy benefits manager
shall issue a report every four
months, which shall be provided to the commissioner and published, for no less
than 24 months, by the pharmacy benefits manager on a website available to the
public, of all drugs appearing on the national average drug acquisition cost
list reimbursed 10 percent above or below the national average drug acquisition
cost, as well as all drugs reimbursed 10 percent or above the national average
drug acquisition cost.

���� b.��� For each drug in the
report, a carrier or pharmacy benefits manager shall include:

(1)�� the month
the drug was dispensed;

(2)�� the quantity
of the drug dispensed;

(3)�� the amount
the pharmacy was reimbursed per unit or dosage;

(4)�� whether the
dispensing pharmacy was an affiliate of the pharmacy benefits manager;

(5)�� whether the
drug was dispensed pursuant to a State or local government health benefits
plan; and

(6)�� the average
national average drug acquisition cost for the month the drug was dispensed.

���� 8.��� a.� No pharmacy benefits
manager shall engage in the practice of medicine, except as otherwise provided
in subsection b. of this section.

���� b.��� Any physician employed
by or contracted with a pharmacy benefits manager that is advising on or making
determinations specific to a covered person in connection with a prior authorization
or step therapy appeal or determination review shall:

���� (1)�� have actively seen
patients within the past five years; and

���� (2)�� have practiced in the
same specialty area for which they are providing advisement within the past
five years;

���� c.���� For contracts and
amendments entered into with a pharmacy benefits manager on and after the
effective date of P.L.��� , c.���
(C. ) (pending before the
Legislature as this bill), the department may require the use of a physician licensed
to practice medicine and surgery in the State of New Jersey for prior
authorization or step therapy appeal or determination reviews.

���� 9.��� This act shall take
effect on the 180
th
day next following enactment.

STATEMENT

���� This bill regulates certain
practices of pharmacy benefits managers and health insurance carriers.

���� Under the bill, a pharmacy
benefits manager will be prohibited from the practice of steering, which, for
the purpose of this bill, means a practice employed by a pharmacy benefit
manager or health carrier that channels a prescription to an affiliated
pharmacy, or pharmacy in which a pharmacy benefit manager or carrier has an
ownership interest, and includes but is not limited to retail, mail-order, or
specialty pharmacies.�

���� On March 1 of each year, a
pharmacy benefits manager or carrier that utilizes a contracted pharmacy
benefits manager will be required to provide a letter to the commissioner
attesting as to whether or not, in the previous calendar year, it engaged in
the practice of steering. The pharmacy benefits manager will also submit to the
commissioner, in a form and manner specified by the commissioner, data
detailing all prescription drug claims it administered for covered persons on
behalf of each health plan client and any other data the commissioner deems
necessary to evaluate whether a pharmacy benefits manager is engaged in the
practice of steering. This data will be confidential and not be subject to the
�Open Public Records Act;� provided, however, that the commissioner prepare an
aggregate report reflecting the total number of prescriptions administered by
the reporting pharmacy benefits manager on behalf of all health plans in the
State along with the total sum due to the State. The department will have access
to all confidential data collected by the Commissioner for audit purposes.�

���� Under the bill, a pharmacy
benefits manager that engages in the practice of steering or imposing
point-of-sale fees or retroactive fees will be subject to a surcharge payable
to the State of 10 percent on the aggregate dollar amount it reimbursed
pharmacies in the previous calendar year for prescription drugs.� Any other
person operating a health plan and licensed under this title whose contracted
pharmacy benefits manager engages in the practice of steering in connection
with its health plans will be subject to a surcharge payable to the State of 10
percent on the aggregate dollar amount its pharmacy benefits manager reimbursed
pharmacies on its behalf in the previous calendar year for prescription drugs.

���� The bill also provides that a
pharmacy benefits manager will be proscribed from, among other provisions:

���� (1)�� prohibiting a pharmacist
or pharmacy from providing a covered person� information on the amount of the covered
person's cost sharing for the covered person's prescription drug and the
clinical efficacy of a more affordable alternative drug if one is available;

���� (2)�� charging or collecting
from a covered person a copayment that exceeds the total submitted charges by
the network pharmacy for which the pharmacy is paid; or

���� (3)�� transferring or sharing
records relative to prescription information containing patient-identifiable
and prescriber-identifiable data to an affiliated pharmacy for any commercial
purpose; provided, however, that nothing shall be construed to prohibit the
exchange of prescription information between a pharmacy benefits manager and an
affiliated pharmacy for the limited purposes of pharmacy reimbursement,
formulary compliance, pharmacy care, or utilization review.

���� The bill further provides that
a health insurance carrier or pharmacy benefits manager will:

���� (1)�� be prohibited from requiring
pharmacy accreditation standards or recertification requirements to participate
in a network which is inconsistent with, more stringent than, or in addition
to, the federal and State requirements for a pharmacy in this State; and

���� (2)�� suspend denials based on
health care provider credentialing requirements. Any credentialing
determination shall be issued within 45 days after receipt by the health
insurance carrier of a universal physician application credentialing
application or a complete New Jersey physician recredentialing application.

���� The bill additionally provides
that a health insurance carrier or pharmacy benefits manager will produce a
report every four months, which will be provided to the commissioner and
published by the pharmacy benefits manager on a website available to the public
for no less than 24 months, of all drugs appearing on the national average drug
acquisition cost list reimbursed 10 percent above or below the national average
drug acquisition cost, as well as all drugs reimbursed 10 percent or above the
national average drug acquisition cost.

���� Under the bill, a pharmacy
benefits manager will not be allowed to engage in the practice of medicine,
unless a physician employed or contracted by a pharmacy benefits manager is
advising on or making determinations specific to a covered person in connection
with a prior authorization or step therapy appeal or determination review and
is able to meet certain requirements.� Finally, the bill provides that a
pharmacy benefits manager will, among other related provisions:

���� (1)�� not require covered
persons to use a mail-order pharmaceutical distributor, including a mail-order
pharmacy; or

���� (2)�� offer a health insurance
carrier the ability to receive 100� percent of all rebates it receives from
pharmaceutical manufacturers. In addition, a pharmacy benefits manager shall
report annually to each client, which shall include but not be limited to insurers,
payors, health plans, and the department the aggregate amount of all rebates
and other payments that a pharmacy benefits manager received from a
pharmaceutical manufacturer in connection with claims, if administered on
behalf of the client and the aggregate amount of such rebates a pharmacy
benefits manager received from a pharmaceutical manufacturer did not pass through
to the client health plan.