S1067

An Act concerning pharmaceuticals and supplementing Title 52 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. The Director of the Division of Purchase and Property in the Department of the Treasury shall review all State pharmaceutical purchasing arrangements, contracts, and initiatives, and shall consider options to maximize the State’s bargaining power with regard to pharmaceutical products and pharmacy services, which may include recommending appropriate statutory, administrative, or executive actions as may be necessary to reduce the cost to State programs and entities of purchasing pharmaceutical products and procuring and reimbursing pharmacy services.

b. The director shall create and maintain a list of prescription drugs, devices, and biological products that may appropriately be prioritized for bulk purchasing initiatives or reexamined for potential renegotiation with the manufacturer, which list shall be reviewed and updated by the director at least annually. The director’s determination as to which prescription drugs, devices, and biological products are to be prioritized shall include: consideration of the price of the drug, device, or biological product; the extent to which therapeutically-equivalent alternatives to the drug, device, or biological product are available; and the 25 prescription drugs, devices, or biological products that represented the highest cost to the State in the prior calendar year based on total purchases of the drug, device, or biological product by State programs and entities. If any of the 25 highest-cost prescription drugs, devices, or biological products is not recommended for prioritization, the director shall include with the prioritization list a written explanation as to why the drug, device, or biological product was not recommended for prioritization. The director shall post the current prioritization list on the Internet website of the Division of Purchasing and Property in the Department of the Treasury.

c. Based on the prioritization list created and maintained pursuant to subsection b. of this section, the director shall, in coordination with the Commissioner of Human Services, the Commissioner of Health, the Commissioner of Corrections, the Commissioner of Banking and Insurance, the State Treasurer, the Assistant Commissioner of the Division of Medical Assistance and Health Services in the Department of Human Services, the State Health Benefits Commission, the School Employees’ Health Benefits Commission, and any other appropriate State departments, divisions, offices, agencies, programs, or entities as shall be designated by the director, develop and implement bulk purchasing arrangements for high-priority drugs.

d. The director shall develop outreach efforts and establish processes for county and local governments, as well as private purchasers, including small businesses, health benefits plans, and self-insured individuals and entities, to benefit from State bulk pharmaceutical purchasing arrangements.

e. Commencing 18 months after the effective date of this act, and annually thereafter, the director shall report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, concerning implementation of this act, including, but not limited to: the specific drugs, devices, and biological products that are subject to bulk purchasing arrangements; an analysis of the effects of bulk purchasing arrangements on the price and consumer availability of prescription drugs, devices, and biological products that are subject to bulk purchasing arrangements; an analysis as to whether bulk purchasing arrangements have affected the price and consumer availability of prescription drugs, devices, and biological products that are not subject to a bulk purchasing arrangement; and any participation in, and any benefits realized by, county and local governments and private purchasers in association with a bulk purchasing arrangement.

2. The Director of the Purchase and Property in the Department of the Treasury, the Commissioner of Human Services, the Commissioner of Health, the Commissioner of Corrections, the Commissioner of Banking and Insurance, and the State Treasurer shall, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), adopt rules and regulations as shall be necessary for the implementation of this act.

3. This act shall take effect immediately.

STATEMENT

This bill requires the Director of the Division of Purchase and Property in the Department of the Treasury to review all State pharmaceutical purchasing arrangements, contracts, and initiatives, and consider options to maximize the State’s bargaining power with regard to pharmaceutical products and pharmacy services, which may include recommending appropriate statutory, administrative, or executive action.

The director will be required to create and maintain a list of prescription drugs, devices, and biological products that may appropriately be prioritized for bulk purchasing initiatives or reexamined for potential renegotiation with the manufacturer, which list shall be reviewed and updated by the director at least annually. The director’s determination as to which prescription drugs, devices, and biological products are to be prioritized will include: consideration of the price of the drug, device, or biological product; the extent to which therapeutically-equivalent alternatives are available; and the 25 prescription drugs, devices, or biological products that represented the highest cost to the State in the prior calendar year, based on total purchases by State programs and entities. If any of the 25 highest-cost prescription drugs, devices, or biological products is not recommended for prioritization, the director is to provide a written explanation as to why the drug, device, or biological product was not recommended for prioritization. The current prioritization list will be posted on the Internet website of the Division of Purchase and Property.

The director is to use the prioritization list to, in coordination with the Commissioner of Human Services, the Commissioner of Health, the Commissioner of Corrections, the Commissioner of Banking and Insurance, the State Treasurer, the Assistant Commissioner of the Division of Medical Assistance and Health Services in the Department of Human Services, the State Health Benefits Commission, the School Employees’ Health Benefits Commission, and any other appropriate State departments, divisions, offices, agencies, programs, and entities as may be designated by the director, develop and implement bulk purchasing arrangements for high-priority drugs.

The director will additionally be required to develop outreach efforts and establish processes for county and local governments, as well as private purchasers, including small businesses, health benefits plans, and self-insured individuals and entities, to benefit from State bulk pharmaceutical purchasing arrangements.

Commencing 18 months after the effective date of the bill, and annually thereafter, the director will be required to report to the Governor and to the Legislature concerning implementation of the bill, including, but not limited to: the specific drugs, devices, and biological products that are subject to bulk purchasing arrangements; the effects of bulk purchasing arrangements on the price and consumer availability of prescription drugs, devices, and biological products that are subject to a bulk purchasing arrangement; an analysis as to whether bulk purchasing arrangements have affected the price and consumer availability of prescription drugs, devices, and biological products that are not subject to a bulk purchasing arrangement; and any participation in, and any benefits realized by, county and local governments and private purchasers in association with a bulk purchasing arrangement.