Requires pharmacy benefits managers to make certain disclosures to health benefits plan sponsors.

S4206

SENATE, No. 4206

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 11, 2026

Sponsored by:

Senator� RAJ MUKHERJI

District 32 (Hudson)

SYNOPSIS

���� Requires pharmacy benefits managers to make certain
disclosures to health benefits plan sponsors.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning pharmacy benefits managers 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.��� As used in this act:

���� �Applicable entity� means:

���� (1)�� an applicable group
purchasing organization, drug manufacturer, distributor, wholesaler, rebate
aggregator (or other purchasing entity designed to aggregate rebates), or
associated third party;

���� (2)�� any subsidiary, parent,
affiliate, or subcontractor of a health plan, health insurance issuer, entity
that provides pharmacy benefit management services on behalf of that plan or
issuer, or any entity described in paragraph (1) of this definition; or

���� (3)�� another entity as
specified by the department.

���� �Contracted compensation�
means the sum of any ingredient cost and dispensing fee for a drug, inclusive
of the out-of-pocket costs to the beneficiary, or another analogous
compensation structure as specified by the department.

���� �Dispensing channel� means the
method of furnishing a drug, and includes retail, mail order, and specialty
pharmacy.

���� �Plan sponsor� means a carrier
or purchaser of a health benefits plan.

���� 2.��� a.� A contract between a
plan sponsor and a pharmacy benefits manager shall require the parties to the
contract to comply with the provisions of this act, and provide for the
disclosure of relevant information necessary to make the reports required
pursuant to this act.

���� b.��� A contract between an
applicable entity and a plan sponsor or pharmacy benefits manager shall require
the parties to the contract to comply with the provisions of this act, and
provide for the disclosure of relevant information necessary to make the
reports required pursuant to this act.

���� 3.��� A pharmacy benefits
manager shall submit a report pursuant to this act to the plan sponsor and the
department not less frequently than every six months.� Each report shall be
made available to the plan sponsor in plain language and in a machine-readable
format or other formats as the department may determine.� Each report required
pursuant to this act shall contain:

���� a.���� A list of drugs for
which a claim was filed and, with respect to each drug on that list:

���� (1)�� the contracted
compensation paid by the plan sponsor for each covered drug, identified by
National Drug Code, to the pharmacy benefits manager;

���� (2)�� the contracted
compensation paid to the pharmacy, by any pharmacy benefits manager, for each
covered drug, identified by National Drug Code;

���� (3)�� for each of those claims,
the difference between the amount paid under paragraph (1) of this subsection
and the amount paid under paragraph (2) of this subsection;

���� (4)�� the proprietary name,
established name or proper name, and the National Drug Code;

���� (5)�� for each claim for the
drug and for each dosage unit of the drug for which a claim was filed, the type
of dispensing channel;

���� (6)�� with respect to each
drug dispensed, for each type of dispensing channel:

���� (a)�� whether the drug is a
brand name drug or a generic drug, and:

���� (i)��� in the case of a brand
name drug, the wholesale acquisition cost, listed as cost per days supply and
cost per dosage unit, on the date the drug was dispensed; and

���� (ii)�� in the case of a
generic drug, the average wholesale price, listed as cost per days supply and
cost per dosage unit, on the date the drug was dispensed; and

���� (b)�� the total number of:

���� (i)��� prescription claims;

���� (ii)�� beneficiaries for whom
a claim for the drug was filed through the applicable dispensing channel;

���� (iii)� dosage units and dosage
units per fill of the drug; and

���� (iv)� days supply of the drug
per fill;

���� (7)�� the net price per course
of treatment or single fill, such as a 30-day supply or 90-day supply to the plan
after rebates, fees, alternative discounts, or other remuneration received from
applicable entities;

���� (8)�� the total amount of
out-of-pocket spending by beneficiaries on the drug, including spending through
copayments, coinsurance, and deductibles, but not including any amounts spent
by beneficiaries on drugs not covered under the plan, or for which no claim is
submitted under the plan;

���� (9)�� the total net spending
on the drug;

���� (10)� the total amount
received, or expected to be received, by the plan from any applicable entity in
rebates, fees, alternative discounts, or other remuneration;

���� (11)� the total amount
received, or expected to be received, by the pharmacy benefits manager, from
applicable entities, in rebates, fees, alternative discounts, or other
remuneration from those entities:

���� (a)�� for claims incurred
during the reporting period; and

���� (b)�� that is related to
utilization of the drug or spending on the drug; and

���� (12) to the extent feasible,
information on the total amount of remuneration for the drug, including
copayment assistance dollars paid, copayment cards applied, or other discounts
provided by each drug manufacturer, to the beneficiaries enrolled in that plan.

���� b.��� A list of each
therapeutic class, as defined by the department, for which a claim was filed
under the health benefits plan during the reporting period, and, with respect
to each therapeutic class:

���� (1)�� the total gross spending
on drugs in the class before rebates, price concessions, alternative discounts,
or other remuneration from applicable entities;

���� (2)�� the net spending in the
class after rebates, price concessions, alternative discounts, or other
remuneration from applicable entities;

���� (3)�� the total amount
received, or expected to be received, by the pharmacy benefits manager, from
applicable entities, in rebates, fees, alternative discounts, or other
remuneration from those entities:

���� (a)�� for claims incurred
during the reporting period; and

���� (b)�� that is related to
utilization of drugs or drug spending;

���� (4)�� the average net spending
per 30-day supply and per 90-day supply by the plan with respect to coverage
and its beneficiaries, among all drugs within the therapeutic class for which a
claim was filed during the reporting period;

���� (5)�� the number of beneficiaries
who filled a prescription for a drug in the class, including the National Drug
Code for each drug;

���� (6)�� if applicable, a
description of the formulary tiers and utilization mechanisms, such as prior
authorization or step therapy, employed for drugs in that class; and

���� (7)�� the total out-of-pocket
spending under the plan by beneficiaries, including spending through
copayments, coinsurance, and deductibles, but not including any amounts spent
by beneficiaries on drugs not covered under the plan or for which no claim is
submitted under the plan.

���� c.���� With respect to any
drug for which gross spending under the health benefits plan exceeded $10,000
during the reporting period or, in the case that gross spending under the health
benefits plan exceeded $10,000 during the reporting period with respect to
fewer than 50 drugs, with respect to the 50 prescription drugs with the highest
spending during the reporting period:

���� (1)�� a list of all other
drugs in the same therapeutic class as that drug;

���� (2)�� if applicable, the
rationale for the formulary placement of the drug in that therapeutic category
or class, selected from a list of standard rationales established by the department,
in consultation with stakeholders; and

���� (3)�� any change in formulary
placement compared to the prior plan year.

���� d.��� In the case that the
plan sponsor or pharmacy benefits manager has an affiliated pharmacy or
pharmacy under common ownership, including mandatory mail and specialty home
delivery programs, retail and mail auto-refill programs, and cost sharing
assistance incentives funded by the pharmacy benefits manager:

���� (1)�� an explanation of any
benefit design parameters that encourage or require beneficiaries in the plan
to fill prescriptions at mail order, specialty, or retail pharmacies;

���� (2)�� the percentage of total
prescriptions dispensed by the pharmacies to participants or beneficiaries in the
plan; and

���� (3)�� a list of all drugs
dispensed by the pharmacies to beneficiaries enrolled in the plan, and, with
respect to each drug dispensed:

���� (a)�� the amount charged, per
dosage unit, per 30-day supply, or per 90-day supply to the plan, and to beneficiaries;

���� (b)�� the median amount
charged to the plan, and the interquartile range of the costs, per dosage unit,
per 30-day supply, and per 90-day supply, including amounts paid by the beneficiaries,
when the same drug is dispensed by other pharmacies that are not affiliated
with or under common ownership with the entity and that are included in the
pharmacy network of the plan;

���� (c)�� the lowest cost per
dosage unit, per 30-day supply and per 90-day supply, for each drug, including
amounts charged to the plan and to beneficiaries, that is available from any
pharmacy included in the network of the plan; and

���� (d)�� the net acquisition cost
per dosage unit, per 30-day supply, and per 90-day supply, if the drug is
subject to a maximum price discount.

���� 4.��� At the time a report is
provided pursuant to section 3 of this act, a pharmacy benefits manager shall
provide to a plan sponsor:

���� a.���� A summary document for
the health benefits plan that includes the information described in subsections
a. through d. of section 3 of this act, as specified by the department through
guidance, that the department determines useful to plan sponsors for purposes
of selecting pharmacy benefit management services, such as an estimated net
price to the plan and beneficiary, a cost per claim, the fee structure or
reimbursement model, and estimated cost per participant or beneficiary.

���� b.��� A summary document for
plans to provide to beneficiaries, which shall be made available to
beneficiaries upon request to the plan, that:

���� (1)�� contains the information
described in subsections c. through f. of this section, as applicable, as
specified by the department through guidance, that the department determines
useful to beneficiaries in better understanding the plan or benefits under the
plan;

���� (2)�� contains only aggregate
information; and

���� (3)�� states that
beneficiaries may request specific, claims-level information related to their
own claims.

���� c.���� With respect to drugs
covered by the plan during the reporting period:

���� (1)�� the total net spending
by the plan for those drugs;

���� (2)�� the total amount
received, or expected to be received, by the plan from any applicable entity in
rebates, fees, alternative discounts, or other remuneration; and

���� (3)�� to the extent feasible,
information on the total amount of remuneration for those drugs, including
copayment assistance dollars paid, copayment cards applied, or other discounts
provided by each drug manufacturer to beneficiaries.

���� d.��� Amounts paid directly or
indirectly in rebates, fees, or any other type of compensation to brokerage
firms, brokers, consultants, advisors, or any other individual or firm, for:

���� (1)�� the referral of the
plan�s business to a pharmacy benefits manager, including the identity of the
recipient of those amounts;

���� (2)�� consideration of the
pharmacy benefits manager by the plan; or

���� (3)�� the retention of the
pharmacy benefits manager by the plan.

���� e.���� An explanation of any
benefit design parameters that encourage or require beneficiaries in the plan
to fill prescriptions at mail order, specialty, or retail pharmacies that are
affiliated with or under common ownership with the pharmacy benefits manager,
including mandatory mail and specialty home delivery programs, retail and mail
auto-refill programs, and cost-sharing assistance incentives directly or
indirectly funded by the pharmacy benefits manager.

���� f.���� Total gross spending on
all drugs under the plan during the reporting period.

���� 5.��� a.�������� Not less than
once a year, at the request of the plan sponsor, the pharmacy benefit manager
shall allow for an audit of the pharmacy benefit manager to ensure compliance
with all terms and conditions under the contract and the accuracy of
information reported pursuant to this act.

���� b.��� The plan sponsor shall
have the right to select an auditor. �The pharmacy benefit manager shall not
impose any limitations on the selection of the auditor.

���� c.���� The pharmacy benefit
manager shall make available to the auditor all records, data, contracts, and
other information necessary to confirm the accuracy of information reported
under this act, subject to reasonable restrictions on how the information is to
be reported to prevent redisclosure of the information.

���� d.��� The pharmacy benefit
manager shall provide information, data, and records relevant to the audit to the
auditor within six months of the initiation of the audit and respond to
requests for additional information from the auditor within 30 days after the
request for additional information.

���� e.���� The pharmacy benefit
manager shall be responsible for providing to the auditor information required
to be reported under this act that is owned or held by an affiliate of the
pharmacy benefit manager.

���� 6.��� This act shall take
effect on the first day of the 12th month next following enactment and shall
apply to contracts entered into on or after that date.

STATEMENT

���� This bill requires pharmacy
benefits managers to make certain disclosures to health benefits plan sponsors
and provides plan sponsors with certain rights to audit pharmacy benefits
managers.�

���� Specifically, the bill
requires pharmacy benefits managers to submit reports to the plan sponsor and
the department not less frequently than every six months.� Each report is to be
made available to the plan sponsor in plain language, in a machine-readable
format, and as the department may determine, other formats.

���� The bill requires the reports
to contain a list of drugs for which a claim was filed and, with respect to
each drug on that list:

���� (1)�� the contracted
compensation paid by the plan sponsor for each covered drug, identified by
National Drug Code, to the pharmacy benefits manager;

���� (2)�� the contracted
compensation paid to the pharmacy, by any pharmacy benefits manager, for each
covered drug, identified by National Drug Code;

���� (3)�� for each of those claims,
the difference between the amount paid to the pharmacy benefits manager and the
amount paid to the pharmacy;

���� (4)�� the proprietary name,
established name or proper name, and the National Drug Code;

���� (5)�� for each claim for the
drug and for each dosage unit of the drug for which a claim was filed, the type
of dispensing channel;

���� (6)�� various information with
respect to each drug dispensed, for each type of dispensing channel;

���� (7)�� the net price per course
of treatment or single fill to the plan after rebates received from applicable
entities;

���� (8)�� the total amount of
out-of-pocket spending by beneficiaries on the drug;

���� (9)�� the total net spending
on the drug;

���� (10) the total amount
received by the plan from any applicable entity in rebates;

���� (11) the total amount
received by the pharmacy benefits manager from applicable entities in rebates
from those entities:

���� (a)�� for claims incurred
during the reporting period; and

���� (b)�� that is related to
utilization of the drug or spending on the drug; and

���� (12) to the extent feasible,
information on the total amount of remuneration for the drug, including
copayment assistance or other discounts provided by each drug manufacturer, to
the beneficiaries enrolled in the plan.

���� The bill requires the reports
to contain a list of each therapeutic class, as defined by the department, for
which a claim was filed under the health benefits plan during the reporting
period, and, with respect to each therapeutic class:

���� (1)�� the total gross spending
on drugs in the class before rebates, price concessions, alternative discounts,
or other remuneration from applicable entities;

���� (2)�� the net spending in the
class after rebates, price concessions, alternative discounts, or other
remuneration from applicable entities;

���� (3)�� the total amount
received, or expected to be received, by the pharmacy benefits manager, from
applicable entities, in rebates from those entities:

���� (a)�� for claims incurred
during the reporting period; and

���� (b)�� that is related to
utilization of drugs or drug spending;

���� (4)�� the average net spending
per 30-day supply and per 90-day supply by the plan with respect to coverage
and its beneficiaries, among all drugs within the therapeutic class for which a
claim was filed during the reporting period;

���� (5)�� the number of beneficiaries
who filled a prescription for a drug in the class, including the National Drug
Code for each drug;

���� (6)�� if applicable, a
description of the formulary tiers and utilization mechanisms employed for
drugs in that class; and

���� (7)�� the total out-of-pocket
spending under the plan by beneficiaries, including spending through
copayments, coinsurance, and deductibles.

���� with respect to any drug for
which gross spending under the health benefits plan exceeded $10,000 during the
reporting period or, in the case that gross spending under the health benefits
plan exceeded $10,000 during the reporting period with respect to fewer than 50
drugs, with respect to the 50 prescription drugs with the highest spending
during the reporting period:

���� (1)�� a list of all other
drugs in the same therapeutic class as that drug;

���� (2)�� if applicable, the
rationale for the formulary placement of the drug in that therapeutic category
or class, selected from a list of standard rationales established by the
department, in consultation with stakeholders; and

���� (3)�� any change in formulary
placement compared to the prior plan year; and

���� The bill requires the report
to contain, in the case that the plan sponsor or pharmacy benefits manager has
an affiliated pharmacy or pharmacy under common ownership, including mandatory
mail and specialty home delivery programs, retail and mail auto-refill
programs, and cost sharing assistance incentives funded by the pharmacy
benefits manager:

���� (1)�� an explanation of any
benefit design parameters that encourage or require beneficiaries in the plan
to fill prescriptions at mail order, specialty, or retail pharmacies;

���� (2)�� the percentage of total
prescriptions dispensed by the pharmacies to participants or beneficiaries in
the plan; and

���� (3)�� a list of all drugs
dispensed by the pharmacies to beneficiaries enrolled in the plan, and certain
cost information with respect to each drug dispensed.

���� The bill also requires, at the
time a report is provided, pharmacy benefits managers to provide to a plan
sponsor a summary document for the health benefits plan that includes certain
information described in the bill, as specified by the department through
guidance, that the department determines useful to plan sponsors for purposes
of selecting pharmacy benefit management services, such as an estimated net
price to the plan and beneficiary, a cost per claim, the fee structure or
reimbursement model, and estimated cost per participant or beneficiary.� The
report is to also contain a summary document for plans to provide to
beneficiaries, which shall be made available to beneficiaries upon request to
the plan, that contains aggregate information as specified by the department
through guidance, that the department determines useful to beneficiaries in
better understanding the plan or benefits under the plan.

���� The bill also provides that, not
less than once a year, at the request of the plan sponsor, the pharmacy benefit
manager is required to allow for an audit of the pharmacy benefit manager to
ensure compliance with all terms and conditions under the contract and the
accuracy of information reported pursuant to the bill.