New Jersey Implements New Rules for Prescription Drug Pricing Transparency

NEW JERSEY - In a major stride towards curbing the escalating costs of prescription medications, Attorney General Matthew J. Platkin, in conjunction with the Division of Consumer Affairs, has announced the introduction of new rules designed to enhance transparency in prescription drug pricing across New Jersey. Effective immediately, these regulations stem from P.L. 2023, c. 106, a recent legislative effort signed by Governor Phil Murphy aimed at addressing drug affordability.

These newly adopted rules require stringent registration, reporting, and compliance protocols for various stakeholders in the prescription drug supply chain, including manufacturers, insurance carriers, pharmacy benefits managers, wholesalers, and pharmacy services administrative organizations. The regulations mandate that these entities provide detailed data on drugs experiencing significant price hikes or those introduced at high initial prices, among other specified criteria.

“The high cost of prescription drugs is a financial burden that disproportionately impacts the health and well-being of the most vulnerable among us: low-income families, the elderly, the uninsured, and people with disabilities,” said Attorney General Matthew J. Platkin. “Until now, we’ve been kept in the dark about the main drivers of high prescription drug costs. The new rules allow us to gain greater insight into prescription drug pricing and a better understanding of how we can help advance the goal of prescription drug affordability and accessibility.

This data collection will facilitate the Division in crafting an annual report highlighting trends in drug pricing, which will be accessible via a dedicated webpage on prescription drug pricing newly established by the Division. This report will serve as a critical resource for the newly formed Drug Affordability Council, aiding in the development of legislative and regulatory proposals aimed at reducing drug costs.

“Establishing rules for the collection, analysis, and reporting of information that sheds light on drug pricing is integral to the Division’s core mission of ensuring fairness and transparency in the market for goods and services,” said Cari Fais, Acting Director of the Division of Consumer Affairs. “The information we collect will help us identify factors that contribute to the high cost of prescription drugs and improve oversight of the drug industry to the benefit of New Jersey consumers.”

Key requirements under the new rules include:

• Manufacturers must inform the Division about price increases and new drugs meeting specified price thresholds, followed by detailed reporting on these drugs.
• Insurance Carriers are required to report spending details on the top 25 prescription drugs and drug groups within certain categories.
• Pharmacy Services Administrative Organizations (PSAOs) are tasked with reporting negotiated reimbursement rates.
• Wholesalers and Pharmacy Benefits Managers must provide information on pricing, volume, and discounts for drugs identified by the Division through the data provided by manufacturers, carriers, and PSAOs.

These rules are set to be in effect for 545 days from their filing date, with plans to propose these provisions for readoption to ensure their permanency, aligning with standard regulatory procedures. This initiative represents a significant effort by the Murphy Administration to bring clarity and fairness to the pricing of prescription drugs, thereby making healthcare more accessible and affordable for all New Jersey residents.

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