STATE OF NEW JERSEY
219th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Permits certain managed care organizations to consider cost-effectiveness when placing prescription drug on formulary.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning drug formularies and supplementing Title 30 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding any law, rule, or regulation to the contrary, a managed care organization that contracts with the Division of Medical Assistance and Health Services in the Department of Human Services to provide pharmacy services under a managed care plan to persons who are eligible for Medicaid may consider a comparison of cost-effectiveness data as a factor, in addition to such other factors as clinical efficacy and safety, when placing a prescription drug on a formulary, if the managed care organization chooses to operate a formulary. Nothing in this section shall be construed as nullifying a provision in an existing contract between a managed care organization and the division.
b. As used in this section:
“Medicaid” means the State Medicaid program established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).
“Formulary” means a list of prescription drugs covered under a managed care plan to persons who are eligible for Medicaid that meets the minimum requirements established by contract between a managed care organization and the Division of Medical Assistance and Health Services in the Department of Human Services and is approved by the division prior to implementation.
2. The Commissioner of Human Services shall, in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), adopt any rules and regulations it deems necessary to carry out the provisions of this act.
3. This act shall take effect immediately, and shall apply to any contract that a managed care organization has entered into with the Division of Medical Assistance and Health Services in the Department of Human Services to provide pharmacy services under a managed care plan to persons who are eligible for medical assistance under P.L.1968, c.413 (C.30:4D-1 et seq.) which is executed on or after the effective date of this act.
STATEMENT
This bill permits a managed care organization (MCO) that contracts with the Division of Medical Assistance and Health Services in the Department of Human Services to provide pharmacy services under a managed care plan to persons who are eligible for Medicaid to consider a comparison of cost-effectiveness data as a factor, in addition to such other factors as clinical efficacy and safety, when placing a prescription drug on a formulary, if the MCO chooses to operate a formulary. Currently, MCOs that offer Medicaid managed care plans may use a formulary, provided that the MCO meets certain minimum requirements established in the contract with the division. This bill does not alter any provision in an existing contract between a MCO and the division.
Under federal law, a Medicaid managed care plan cannot refuse to cover a drug solely on the basis that the drug costs too much relative to its benefits. It is the sponsor’s intent to encourage MCOs who offer Medicaid managed care plans to consider cost-effectiveness as one factor of many in developing formularies as a means to help contain the cost of health care in a manner permissible under federal law.