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Senate Commerce Committee Statement to Senate, No. 1423 (February 11, 2021)

Summary

Senate Commerce Committee Statement to Senate, No. 1423, with committee amendments, State of New Jersey, dated February 11, 2021, reporting Senate Bill No. 1423 favorably. As amended, the bill requires carriers to pass prescription drug savings on to consumers. It provides that compensation paid by a pharmaceutical manufacturer to a pharmaceutical benefits manager as a result of negotiations of a reduced price is to be remitted to and retained by the carrier, and used to lower the premium for covered persons or remitted directly to the covered person at the point of sale. The bill also provides that a carrier annually files a report with the commissioner on its compliance. The committee amendments revise the definition of "compensation" and adjust the effective date.

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Cite this document

“Senate Commerce Committee Statement to Senate, No. 1423 (February 11, 2021).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-02-11-scm-s1423-s1-64e7c071e6/, SHA-256 b2549c3816e64e13ea6a43f72d434d7903e3dbdd88457e04ff9df3babbd6295a.

Full text

     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

                  SENATE, No. 1423
                   with committee amendments



 STATE OF NEW JERSEY
                   DATED: FEBRUARY 11, 2021

   The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 1423.
   As amended, this bill requires carriers to pass prescription drug
savings on to consumers. The bill provides that all compensation
paid by a pharmaceutical manufacturer to a pharmaceutical benefits
manager as a result of negotiations of a reduced price for a
pharmaceutical between a pharmacy benefits manager and a
manufacturer, in relation to a contract between a pharmacy benefits
manager and a carrier related to its insured prescription drug
benefits, shall be remitted to and retained by the carrier and must be
used by the carrier to lower the premium for covered persons under
the carrier’s health benefits plan or to allow for remittance directly
to the covered person’s at the point of sale to reduce the insured’s
out of pocket costs.
   In addition, the bill provides that a carrier shall annually file with
the commissioner a report demonstrating how the carrier has
complied with the provisions of the bill.
   Under the bill, “compensation” is defined as any direct or
indirect financial benefit, but excludes any performance
compensation agreement paid by a manufacturer, developer or
labeler.

COMMITTEE AMENDMENTS:
    The committee amended the bill to:
    1) revise the definition of “compensation;”
    2) clarify that the contract addressed in the bill between pharmacy
benefit managers and carriers relates to the prescription drug benefits
of covered persons;
    3) permit a carrier to remit compensation received by a carrier as
a result of negotiations for reduced drug prices directly to a covered
person at the point of sale; and
    4) adjust the effective date.

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