On Monday January 11, 2016, New Jersey Governor Chris Christie signed two bills into law that regulate PBMs in the State, and impact requirements for coverage of certain products. The two bills S-2301/A-3522 (which regulates pharmacy benefits managers and requires certain disclosures concerning multiple source generic drug pricing) and A-3331/S-3111 (which requires health benefits coverage for synchronization of prescribed medications under certain circumstances) mark substantial steps in improving New Jersey’s regulatory scheme as it applies to PBMs and pharmacy benefits coverage.
With the signing of S-2301/A-3522, New Jersey joined the several other States that have recently passed “maximum allowable cost” or “MAC” transparency laws. Under this law, PBMs must include in all contracts between a PBM and a pharmacy (1) the sources utilized to determine multiple source generic drug pricing, including, if applicable, the MAC pricing formula; (2) a requirement to update that pricing information every seven days; (3) a reasonable process for pharmacies to access MAC pricing lists in a timely manner. In addition, in creating the MAC lists, PBMs must, at a minimum, ensure that the drug is listed as therapeutically and pharmaceutically equivalent or “A,” “B,” “NR,” or “NA” rated by the FDA, and that the drug is available for purchase without limitations by all pharmacies in the State from national or regional wholesalers and is not obsolete or temporarily unavailable.
Finally, the law provides a little teeth for pharmacies. Under the law, all contracts between a PBM and a pharmacy must include a process to appeal, investigate, and resolve disputes regarding MAC drug pricing. The contract must allow for pharmacies the right to appeal within 14 days following the initial claim, and such appeals must be resolved by the PBM within 14 days. The PBM must also provide a telephone number at which a pharmacy may contact the PBM and speak with an individual who is involved in the appeals process, and if the appeal is denied, the PBM must provide the reason for the denial and identify the NDC of a drug that is available for purchase by contracted pharmacies in New Jersey from registered wholesalers at a price which is equal to or less than the MAC for the appealed drug as determined by the PBM.
Thus, under this new framework, New Jersey pharmacies can use the MAC law to appeal instances where PBMs have established MAC prices below available acquisition costs.
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Likewise, under A-3331/S-3111 , every health benefits plan (including health insurers, HMOs, PPOs, hospital service corporations, etc.) which provides benefits for pharmacy services, prescription drugs, or for participation in a prescription drug plan must, on at least one occasion per year for each covered person apply a prorated daily cost-sharing rate to prescriptions that are dispensed by a network pharmacy for less than a 30 days’ supply if the prescriber or pharmacist indicates the fill or refill is in the best interest of the covered person or is for the purpose of synchronizing the covered person’s chronic medications. In addition, such health benefits plans must provide coverage for a drug prescribed for the treatment of a chronic illness dispensed in accordance with a plan among the covered person, the prescriber and the pharmacist to synchronize the refilling of multiple prescriptions for the covered person. Finally, such health benefits plans must determine dispensing fees based exclusively on the total number of prescriptions dispensed, and may not prorate dispensing fees or base them on the number of the days’ supply of medication dispensed.
The law is intended to eliminate barriers to medication synchronization and reduce the waste of medications that results when prescriptions are changed during a mid-30 day supply. Medication synchronization or “med sync” is the process by which a patient’s prescriptions are synchronized to be filled and picked up at the same time, allowing patients to pick up of all of their ongoing prescription refills at the pharmacy on a single, convenient day each month. Med sync has been shown to improve rates of medication adherence, and thus lower overall health care expenditures. By eliminating such barriers, the law provides patients with the ability to synchronize their prescriptions in consultation with their pharmacists without having to pay a full month’s cost-sharing when less than a month’s supply of medications is dispensed during the synchronization process until all medications are on the same 30 (or more) day refill schedule. The law is also intended to protect pharmacists, when providing a partial fill, from being compensated on a prorated basis for any dispensing fee.
