Sponsored by:
Assemblyman ERIC HOUGHTALING
District 11 (Monmouth)
Assemblywoman JOANN DOWNEY
District 11 (Monmouth)
Assemblywoman VALERIE VAINIERI HUTTLE
District 37 (Bergen)
Co-Sponsored by:
Assemblyman Karabinchak
SYNOPSIS
Expresses support for US Department of Health and Human Services’ proposed rule to reduce prescription drug prices and out-of-pocket costs.
CURRENT VERSION OF TEXT
As introduced.
An Assembly Resolution expressing support for the United States Department of Health and Human Services’ proposed rule to reduce prescription drug prices and out-of-pocket costs.
Whereas, Many Americans are subject to a distorted pharmaceutical pricing system that prevents them from affordably obtaining many life-saving medicines; and
Whereas, Under this system, pharmaceutical companies pay rebates to pharmacy benefit managers, who serve as middlemen in the pharmaceutical supply chain who negotiate discounts from drug manufacturers and retail pharmacies on behalf of employers and health plans, in exchange for priority placement on drug “formularies,” the list of drugs covered by health plans; and
Whereas, Because these rebates are generally calculated as a percentage of the list price of a drug, they create significant distortions in pricing by incentivizing drug manufacturers to set prices artificially high; and
Whereas, This distorted pricing system forces patients to pay higher out-of-pocket costs than they would otherwise pay for their prescriptions; and
Whereas, On January 31, 2019, the United States Department of Health and Human Services proposed a new rule that would replace the current system of rebates with a system that directly provides discounts to patients at the pharmacy; and
Whereas, The new rule, which applies to certain Medicare and Medicaid prescription drug plans, will lower out-of-pocket costs for beneficiaries who rely heavily on prescription drugs; and
Whereas, According to the chief actuary for the Centers for Medicare and Medicaid Services, under the new rule, households will save $93 billion in out-of-pocket spending for prescription drugs over the next decade; and
Whereas, Given the distorted nature of the current pharmaceutical pricing system, and in light of the proposed system’s anticipated financial benefit to Medicare and Medicare recipients in New Jersey and across the nation, it is fitting and proper for this House to express support for the U.S. Department of Health and Human Services’ proposed rule; now, therefore,
Be It Resolved by the General Assembly of the State of New Jersey:
1. This House supports the
United States Department of Health and Human Services’ proposed rule to reduce
prescription drug prices and out-of-pocket costs by replacing the current
system of rebates to pharmacy benefit managers with a system that directly
provides discounts to patients at the pharmacy.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly to the U.S. Secretary of Health and Human Services and to the Inspector General of the U.S. Department of Health and Human Services.
STATEMENT
This resolution expresses support for the United States Department of Health and Human Services’ proposed rule to reduce prescription drug prices and out-of-pocket costs by replacing the current system of rebates to pharmacy benefit managers with a system that directly provides discounts to patients at the pharmacy.
Under this system, pharmaceutical companies pay rebates to pharmacy benefit managers, who serve as middlemen in the pharmaceutical supply chain who negotiate discounts from drug manufacturers and retail pharmacies on behalf of employers and health plans, in exchange for priority placement on drug “formularies,” the list of drugs covered by health plans. Because these rebates are generally calculated as a percentage of the list price of a drug, they create significant distortions in pricing by incentivizing drug manufacturers to set prices artificially high. This distorted pricing system forces patients to pay higher out-of-pocket costs than they would otherwise pay for their prescriptions.
On January 31, 2019, the United States Department of Health and Human Services proposed a new rule that would replace the current system of rebates with a system that directly provides discounts to patients at the pharmacy. The new rule, which applies to certain Medicare and Medicaid prescription drug plans, will lower out-of-pocket costs for beneficiaries who rely heavily on prescription drugs. According to the chief actuary for the Centers for Medicare and Medicaid Services, under the new rule, households will save $93 billion in out-of-pocket spending for prescription drugs over the next decade.