Pharmacy ALERT: New Jersey Law on Drug Pricing Now in Effect

A recent law in New Jersey regulating Pharmacy Benefits Managers (“PBMs”) went into effect on March 18, 2020 and may have an immediate effect on reimbursement rates paid to New Jersey pharmacies. As Frier Levitt reported earlier this year, the bill previously known as A3717, now codified at N.J.S.A. 17b:27f-1 to -10, prohibits certain post-point of sale fees and terminations for mailing. In addition, the new law also requires more PBM pricing transparency and strengthens the rights of pharmacies to contest below-cost reimbursement. Pharmacies should immediately begin taking advantage of the law’s protection.

Prior to the law’s enactment, New Jersey only offered protections with respect to drugs on a PBM’s Maximum Allowable Cost (“MAC”) list. The new law requires PBMs, when they enter into or materially change a contract with the pharmacy among other things, to include price sourcing for both generic and brand drugs, which includes MAC, generic effective rates, brand effective rates, and any other formula the PBM uses to determine pharmacy reimbursement. The law also requires PBMs to regularly update pricing, establish access for pharmacies to price lists, and maintain a procedure to eliminate or modify pricing in a timely fashion.

Additionally, the law has expanded its MAC appeal requirements to include appeals for any pricing formula for pharmacy reimbursement. If the appeal is denied, the PBM is required to direct the pharmacy to a wholesaler from which that pharmacy may purchase the drug at or below the rate set by the PBM. In other words, the new law restricts PBMs from reimbursing pharmacies below the cost of acquisition on any drug, so long as the pharmacy timely appeals reimbursement.

Pharmacies need to act fast, as appeals are limited to 14 calendar days following the initial claim. Pharmacies that are being reimbursed below cost on any drugs must appeal quickly to begin the process.

How Frier Levitt Can Help

Frier Levitt’s attorneys have decades of expertise in fighting abusive PBM practices and can leverage these appeals and other laws to gain reasonable reimbursement rates for pharmacies in New Jersey. The attorneys at Frier Levitt are prepared to begin appeals for your pharmacy immediately. Call Frier Levitt today to discuss your pharmacy’s options.

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