Senate Commerce Committee Statement to Senate, No. 334 — State of New Jersey (February 10, 2022)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 334, State of New Jersey, dated February 10, 2022, reporting the bill favorably with committee amendments. The bill requires carriers to pass prescription drug savings on to consumers: compensation paid by a pharmaceutical manufacturer to a pharmacy benefits manager from negotiated price reductions would be remitted to the carrier. The carrier would use those amounts to lower premiums or reduce covered persons' costs at the point of sale, and must file an annual compliance report with the commissioner. The amendments clarify the definition of "compensation" and apply the bill to plans issued or renewed on or after January 1 of the calendar year after enactment.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
334

with
committee amendments

STATE
OF NEW JERSEY

DATED: FEBRUARY
10, 2022

The
Senate Commerce Committee reports favorably and with committee amendments
Senate Bill No. 334.

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, would be remitted to and
retained by the carrier. Thereafter, the carrier would be required to use
these amounts 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 requires each carrier to annually file a report, with the
commissioner, 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.

This bill was pre-filed
for introduction in the 2022-2023 session pending technical review. As reported,
the bill includes the changes required by technical review, which has been
performed.

COMMITTEE AMENDMENTS:

The committee amended the bill to:

(1) clarify the definition of “compensation” pursuant
to the bill; and

(2) stipulate that the provisions of the bill are to
apply to plans issued or renewed on or after January 1 of the calendar year
after the date of enactment.

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