The New Jersey Assembly voted 59-18 on Monday to crack down on the pharmaceutical middlemen that critics say are quietly driving up the cost of your prescriptions.
The bill, called the Patient and Provider Protection Act, targets pharmacy benefit managers—companies that sit between drug makers and health insurers, controlling where patients get their medications and what they pay for them. Many benefit managers also own their own pharmacies, like the mail-order businesses run by CVS Caremark and Optum RX, giving them even more leverage over prices, according to New Jersey Monitor.
“A monopoly with a lab coat on it,” is how Assemblyman Roy Freiman (D-Somerset), one of the bill’s chief sponsors, described the current system. “That’s not competition. That’s a rigged game.”
The bill would standardize drug costs based on a national index, require equal reimbursements so benefit managers can’t negotiate better deals for pharmacies they own, and ban them from steering patients toward specific pharmacy services. It would also require PBMs to act in the best interest of the insurance carriers they work with—including in contracts involving Medicaid and other taxpayer-funded programs.
Not everyone is on board. The Pharmaceutical Care Management Association, the industry’s trade group, argued the bill would actually raise costs, citing a standard pharmacy fee of $10.92 per prescription that it says is well above current rates. “Higher costs for families, union workers, employers, and seniors already struggling under rising health care costs,” said spokesman Greg Lopes.
Freiman pushed back, noting that Maine and Vermont have already enacted similar laws. He noted that New Jersey would simply be joining a growing national movement.
The bill now heads to the Senate for approval. If it passes, it will go to Governor Sherrill’s desk for the final sign-off.