Requires pharmacy benefits manager compensation to be based on bona fide service fee.

S4205

SENATE, No. 4205

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 11, 2026

Sponsored by:

Senator� RAJ MUKHERJI

District 32 (Hudson)

SYNOPSIS

���� Requires pharmacy benefits manager compensation to be
based on bona fide service fee.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning pharmacy benefits manager
compensation and amending P.L.2023, c.107.

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

���� 1.��� Section 9 of P.L.2023,
c.107 (C.17B:27F-3.4) is amended to read as follows:

���� 9. a. If a carrier uses a
pharmacy benefits manager to administer or manage the prescription drug
benefits of covered persons, any pharmacy benefits manager compensation, for
purposes of calculating a carrier's anticipated loss ratio or any loss ratio calculated
as part of any applicable medical loss ratio filing or rate filing, shall:

���� (1) constitute an
administrative cost incurred by the carrier in connection with a health
benefits plan; and

���� (2) not constitute a benefit
provided under a health benefits plan.� A carrier shall claim only the amounts
paid by the pharmacy benefits manager to a pharmacy or pharmacist as an
incurred claim.

���� b.��� Any rate filing
submitted by a carrier with respect to a health benefits plan that provides
coverage for prescription drugs or pharmacy services and that is administered
or managed by a pharmacy benefits manager shall include:

���� (1) a memorandum prepared by a
qualified actuary describing the calculation of the pharmacy benefits manager
compensation; and

���� (2) any records and supporting
information as the department reasonably determines is necessary to confirm the
calculation of the pharmacy benefits manager compensation.

���� c.���� Upon request, a carrier
shall provide any records to the department that relate to the calculation of
the pharmacy benefits manager and pharmacy services administrative organization
compensation.

���� d.��� A pharmacy benefits
manager and pharmacy services administrative organization shall provide any
necessary documentation requested by a carrier that relates to pharmacy
benefits manager compensation in order to comply with the requirements of this
section.

����
e.���� (1) Compensation to
a pharmacy benefits manager or affiliate of a pharmacy benefits manager for the
administration and management of prescription drug benefits shall not be in any
form of a commission structure or fee other than a bona fide service fee.

����
(2)�� As used in this
subsection, �bona fide service fee" means
a fee
that is reflective of the fair market value, as determined by the Commissioner
of Banking and Insurance, for a bona fide, itemized service actually performed
on behalf of a purchaser, that the purchaser would otherwise perform or
contract for in the absence of a pharmacy benefits management services contract
and that is not passed on in whole or in part to a covered person. �The fee shall
be in a flat dollar amount and shall not be directly or indirectly based on, or
contingent upon:

����
(a)�� a drug price, such as
wholesale acquisition cost, or a drug benchmark price, such as average
wholesale price;

����
(b)�� the amount of
discounts, rebates, fees, or other direct or indirect remuneration with respect
to a drug dispensed to a covered person;

����
(c)�� formulary placement
decisions or the volume or value of any referrals or business generated between
the pharmacy benefits manager and purchaser; or

����
(d)�� any other amounts or
methodologies prohibited by the department.

(cf: P.L.2023, c.107, s.9)

���� 2.��� This act shall take
effect on the first day of the fourth 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 may take such anticipatory administrative action in
advance thereof as shall be necessary for the implementation of this act.

STATEMENT

���� This bill establishes pharmacy
benefits manager compensation based on a bona fide service fee.

���� Under the bill, compensation
to a pharmacy benefits manager or affiliate of a pharmacy benefits manager for
the administration and management of prescription drug benefits may not be in
any form of a commission structure or fee other than a bona fide service fee.�
For purposes of this bill, �bona fide service fee" means a fee that is
reflective of the fair market value, as determined by the Commissioner of
Banking and Insurance, for a bona fide, itemized service actually performed on
behalf of a purchaser, that the purchaser would otherwise perform or contract
for in the absence of a pharmacy benefits management services contract and that
is not passed on in whole or in part to a covered person.� The fee is required
to be a flat dollar amount and may not be directly or indirectly based on, or
contingent upon:

���� (1)�� a drug price, such as
wholesale acquisition cost, or a drug benchmark price, such as average
wholesale price;

���� (2)�� the amount of discounts,
rebates, fees, or other direct or indirect remuneration with respect to a drug
dispensed to a covered person;

���� (3)�� formulary placement
decisions or the volume or value of any referrals or business generated between
the pharmacy benefits manager and purchaser; or

���� (4)�� any other amounts or
methodologies prohibited by the department.