ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY, No. 4186

STATE OF NEW JERSEY

DATED:  JUNE 18, 2019

      The Assembly Appropriations Committee reports favorably Assembly Bill No. 4186.

      This bill prohibits the resale of non-prescription diabetes test devices by pharmacists.

      The intent of the bill is to police the “grey market” for non-prescription diabetes test devices that are acquired outside of the authorized supply chain.  Some unethical pharmacies and medical equipment suppliers acquire devices illegally from foreign countries, or acquire unused devices from patients at a price lower than wholesale but higher than the patient’s out-of-pocket cost.  These pharmacies and medical equipment suppliers then repackage and sell the products for a profit, billing insurers and government programs for the full price of the product and collecting rebates from manufacturers.

      The bill requires that a manufacturer of a non-prescription diabetes test device that is distributed within New Jersey must make the names of its authorized distributors available on its Internet Web site, and provide the Board of Pharmacy with the names of its authorized distributors, and update that list within 30 days of making any change in its authorized distributors.  Within 30 days of receiving that information, the board would post the names of authorized distributors of non-prescription diabetes test devices on the board’s Internet Web site.

      The bill further provides that a pharmacy that dispenses non-prescription diabetes test devices pursuant to prescriptions shall retain records of its acquisition, inventory, and sale of those non-prescription diabetes test devices.  The records must be maintained in a manner prescribed by the board by regulation, and must be retained for a period of not less than three years.  The board would have authority to inspect records at all reasonable hours.

      The bill grants the board authority to embargo any non-prescription diabetes test device that a board inspector finds or has probable cause to believe was not purchased either directly from the manufacturer or from the non-prescription diabetes test device manufacturer’s authorized distributors.  Procedures for embargoing of such devices would be established by the board by regulation, consistent with the requirements of current law for the embargo of products held by a pharmacist whose license is suspended or revoked.

      A pharmacist who submits a reimbursement claim for a non-prescription diabetes test device to a health insurance carrier, pharmacy benefit manager, government agency, or other third-party payer when the pharmacist knew or reasonably should have known that the pharmacy did not purchase the diabetes test device either directly from the manufacturer or from one of the manufacturer’s authorized distributors would be subject to disciplinary action by the board.

      As reported, this bill is identical to Senate Bill No. 834, as also reported from the committee on this date.

FISCAL IMPACT:

      This bill is not certified as requiring a fiscal note.