Gov. Mikie Sherrill signaled a desire to go all-in on reforming pharmacy benefit managers this year, and some legislative Democrats are joining the push.
PBMs are intermediaries that manage drug benefits for insurers, employers, and Medicare Part D, and Sherrill criticized them during her gubernatorial campaign as middlemen that have caused recent increases in prescription drug prices. In her inaugural budget address earlier this week, she doubled down on the push, saying she wants to pass a “comprehensive and historic” reform bill.
“Today, a type of shadowy middleman, called a pharmacy benefit manager, or PBM, sits between insurers, drugmakers, and pharmacies,” Sherrill said during her budget address. “They drive up the cost of medications as much as 10 times, while padding their profits with secret manufacturer rebates and insider tricks. Our state Medicaid program could save 20 million dollars if PBMs weren’t allowed to inflate the prices it’s forced to pay.”
State Sen. Vin Gopal (D-Long Branch) praised her announcement in a statement on Thursday.
“This legislation will restructure how PBMs operate in New Jersey, bringing increased transparency and needed regulation to lower patient costs, bring fairness for community pharmacies and curb anticompetitive practices,” Gopal said. “We cannot discuss affordability and patient safety in our state without addressing how PBMs operate, and I look forward to working with the administration to get a final bill done and bring justice for patients and pharmacies which is way overdue.”
Assemblyman Roy Freiman (D-Hillsborough), the chair of the Financial Institutions and Insurance Committee, pushed his bill, the Patient and Provider Protection Act, which he says would bring transparency and accountability to PBMs. The bill was reported from his committee last year, but went no further.
“The Patient and Provider Protection Act would strengthen oversight, protect local pharmacies, and bring transparency to a system that has operated in the shadows for far too long,” Freiman said. “I was pleased to hear the Governor highlight PBM reform in her budget address — her support makes clear that momentum is building — and I look forward to working with my colleagues to finally deliver meaningful reform for New Jersey families.”
The Pharmaceutical Care Management Association, a national group representing PBMs, said Sherrill’s remarks about PBMs were incorrect, arguing that PBMs are fully transparent. The group said PBMs save individual New Jerseyans an average of $1,154 each year. Instead, the group said, Sherrill should focus on drugmakers that set prices and drug wholesalers that operate without oversight.
“The governor’s remarks today about pharmacy benefit managers are simply untrue and misleading to New Jersey patients, and it is imperative to correct the record,” the PCMA said. “The mission of PBMs is to reduce prescription drug costs, and they do so highly effectively — saving New Jersey families thousands of dollars. It is the reason they exist.”
