SENATE, No. 974
STATE OF NEW JERSEY
INTRODUCED MARCH 18, 1996
By Senator CARDINALE
An Act concerning certain sales of prescription drugs in this State and supplementing Title 56 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Drug" means any substance subject to paragraph 1 of subsection (b) of 21 U.S.C.§353.
"In-patient use" means the dispensing of drugs by a health care facility to care for its in-patients and not the sale of drugs to out-patients by the health care facility pharmacy.
"Manufacturer" means any person engaged in the manufacture or processing of a drug or drugs and does not include a wholesale distributor of drugs or a retail pharmacy licensed in this State.
"Purchaser" means any person who purchases a drug or drugs for resale directly to consumers in this State or for dispensing directly to consumers in this State.
"Wholesale distributor" means any person, other than a manufacturer, who purchases drugs for resale to purchasers.
2. a. A manufacturer shall sell a drug it manufactures or processes at the same price to purchasers and wholesale distributors, except that the price may vary because of the actual costs of distribution of the drug by the manufacturer; discounts for volume purchases of the drug and prompt payment for purchases of the drug, which discounts shall be made available to all purchasers on equal terms and be directly proportional to the economies and efficiencies realized by the manufacturer; and reasonable reimbursement for the value to the manufacturer of a wholesale distributor's actual marketing functions, which reimbursement shall be available to every wholesale distributor which performs these functions in this State.
b. A wholesale distributor shall sell a drug it distributes at the same price to purchasers, except that the price may vary because of the actual costs of distribution of the drug by the wholesale distributor and discounts for volume purchases of the drug and prompt payment for purchases of the drug, which discounts shall be made available to all purchasers on equal terms and be directly proportional to the economies and efficiencies realized by the wholesale distributor.
3. a. An action may be maintained in any court of competent jurisdiction to prevent, restrain or enjoin a violation, or potential violation, of this act. The action may be instituted by any person injured by a violation or potential violation of this act or by the Attorney General. If a violation or potential violation of this act is established in the action, the court shall enjoin and restrain, or otherwise prohibit, that violation or potential violation. In the action it shall not be necessary that actual damages to the plaintiff be alleged or proved, but if alleged and proved, the plaintiff in the action, in addition to such injunctive relief and costs of suit, including filing fees, reasonable attorneys' fees and reasonable expenses of discovery and document reproduction, shall be entitled to recover from the defendant the actual damages sustained by the plaintiff. Proof of a violation of this act shall constitute prima facie evidence of damage to the plaintiff. Actual damages to the plaintiff may be determined by loss of prescription activity, diminished profit or any other legally recognized formula.
b. If no injunctive relief is sought or required, any person injured by a violation of this act may maintain an action for damages and costs of suit, including filing fees, reasonable attorneys' fees and reasonable expenses of discovery and document reproduction, in any court of competent jurisdiction. Proof of a violation of this act shall constitute prima facie evidence of damage to the plaintiff. Actual damages to the plaintiff may be determined by loss of prescription activity, diminished profit or any other legally recognized formula.
4. The provisions of this act shall not apply to the sale of drugs by a manufacturer to any federal agency or institution or to a health care facility as defined in the "Health Care Facilities Planning Act," P.L.1971, c.136 (C.26:2H-1 et seq.) if those drugs are only dispensed on the premises of the health care facility for in-patient use. The provisions of this act shall not apply to rebates provided by a manufacturer pursuant to the provisions of the "Pharmaceutical Rebate Act," P.L.1992, c.83 (C.30:4D-35.1 et seq.).
5. This act shall take effect on the 30th day after enactment and shall apply to sales of drugs on or after that 30th day.
STATEMENT
This bill requires a prescription drug manufacturer to sell a drug it manufactures or processes at the same price to any purchaser or wholesale distributor for delivery in this State, except that price may vary because of the manufacturer's actual distribution costs; volume and payment discounts, which discounts must be made available to all purchasers on equal terms; and reasonable wholesale distributor margins. The bill also requires a wholesale distributor to sell a drug it distributes at the same price to any purchaser for delivery in this State, except that price may vary because of the distributor's actual distribution costs and volume and payment discounts, which discounts must be made available to all purchasers on equal terms.
An injured party or the Attorney General may seek injunctive relief for violations of the provisions of this bill. An injured party may also sue for damages caused by such violations.
The provisions of the bill do not apply to purchases of drugs by federal agencies or institutions or to purchases of drugs by health care facilities if the drugs are only dispensed on the premises for in-patient use. The provisions of the bill also do not apply to rebates pursuant to the "Pharmaceutical Rebate Act."
Prohibits discrimination by a manufacturer or wholesale distributor in the pricing of drugs.