A2160

An Act concerning prescription drugs and drug samples and supplementing Title 45 of the Revised Statutes.

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

1. a. It shall be unlawful for a drug manufacturer, pharmacy, wholesaler, or other medication supply intermediary to enter into any agreement with a health care practitioner to dispense prescription drugs and drug samples using a device, kiosk, machine, or other system which directs or diverts patients to a specified pharmacy or pharmacist for the filling of prescriptions, or which restrains in any way a patient’s choice when selecting a pharmacy or pharmacist.

b. A practitioner or a practitioner’s authorized designee shall not dispense prescription drugs and drug samples using a device, kiosk, machine, or other system which transmits a patient’s information to a particular pharmacy or pharmacist, unless:

(1) the patient has voluntarily, on the patient’s own volition and without prompting from the practitioner or designee, requested the information be transmitted to that pharmacy or pharmacist; or

(2) the practitioner or designee provides the patient with full disclosure that the patient’s information will be transmitted to the pharmacy or pharmacist, and informs the patient of the patient’s right to have the patient’s information transmitted to the pharmacy or pharmacist of the patient’s own choosing and of the right not to have the patient’s information transmitted to a pharmacy or pharmacist in connection with the dispensing of the prescription drug.

c. If a drug manufacturer, pharmacy, wholesaler, or other medication supply intermediary violates the provisions of subsection a. of this section, the drug manufacturer, pharmacy, wholesaler, or other medication supply intermediary shall be liable to a civil penalty of not less than $100,000 for the first violation, not less than $200,000 for the second violation, and not less than $400,000 for the third and each subsequent violation.

If a practitioner or designee violates the provisions of subsection b. of this section, the practitioner shall be liable to a civil penalty of not less than $250 for the first violation, not less than $500 for the second violation, and not less than $1,000 for the third and each subsequent violation.

The penalty shall be collected pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.), in a summary proceeding before the municipal court having jurisdiction. An official authorized by statute or ordinance to enforce the State or local health codes or a law enforcement officer having enforcement authority in that municipality may issue a summons for a violation of the provisions of this section, and may serve and execute all process with respect to the enforcement of this section consistent with the Rules of Court.

A penalty recovered under the provisions of this section shall be recovered by and in the name of the State by the local health agency. The penalty shall be paid into the treasury of the municipality in which the violation occurred for the general uses of the municipality.

d. Nothing in this section shall be construed to revise or expand the authority of health care practitioners to dispense prescription drugs as provided by law.

2. a. A device, kiosk, machine, or other system for the dispensing of prescription drugs to patients, including drug samples, shall not utilize a patient’s individually identifiable medical information as a marketing tool, or sell or otherwise provide a patient’s individually identifiable medical information to any other entity, in an effort to promote a particular pharmacy, preferred pharmacy plan, or a particular medication whether in the form of a sample or prescription without first obtaining authorization pursuant to 45 C.F.R. s.164.508. The patient shall be notified of the patient’s right to file a complaint related to a breach of the patient’s right to privacy or failure to provide notice regarding any of the required disclosures, and shall be notified of a point of contact for the complaint process. A device, kiosk, machine, or other system shall not limit the patient’s ability to access drugs through the device, kiosk, machine, or other system based on the patient’s choice not to provide authorization pursuant to this paragraph.

b. A device, kiosk, machine, or other system for the dispensing of prescription drugs to patients, including drug samples, shall notify a patient of any charges to the patient’s insurance provider that is related to the transmittal of the patient’s individually identifiable medical information, or any benefits, services, or products the patient may receive by using the device, kiosk, machine, or other system.

c. The operator of a device, kiosk, machine, or other system that is in violation of this section shall be subject to such penalties as are applicable under State and federal law.

3. This act shall take effect immediately.

STATEMENT

This bill prohibits certain steering and other marketing practices involving devices, kiosks, machines, and other systems for the dispensing of prescription drugs to patients, including drug samples.

This bill prohibits drug manufacturers, pharmacies, wholesalers, or other medication supply intermediaries from entering into agreements with health care practitioners to dispense prescription drugs and drug samples using a device, kiosk, machine, or other system which directs or diverts patients to a specified pharmacy or pharmacist for the filling of prescriptions, or which restrains in any way a patient’s choice when selecting a pharmacy or pharmacist. This practice, which is sometimes referred to as “steering,” improperly restricts patient choice.

If a drug manufacturer, pharmacy, wholesaler, or other medication supply intermediary violates this provision, the drug manufacturer, pharmacy, wholesaler, or other medication supply intermediary would be liable to a civil penalty of not less than $100,000 for the first violation, not less than $200,000 for the second violation, and not less than $400,000 for the third and each subsequent violation.

A practitioner or designee would not be permitted to dispense prescription drugs and drug samples using a device, kiosk, machine, or other system which transmits a patient’s information to a particular pharmacy or pharmacist, unless either: (1) the patient has, voluntarily and without any prompting from the practitioner, requested the information be transmitted to that pharmacy or pharmacist; or (2) the practitioner or designee provides the patient with full disclosure that the patient’s information will be transmitted to the pharmacy or pharmacist, and informs the patient of the patient’s right to have the patient’s information transmitted to the pharmacy or pharmacist of the patient’s own choosing and of the right not to have the patient’s information transmitted to any pharmacy or pharmacist in connection with the dispensing of the drug.

If a practitioner or designee violates the provisions of the bill, the practitioner would be liable to a civil penalty of not less than $250 for the first violation, not less than $500 for the second violation, and not less than $1,000 for the third and each subsequent violation, which would be recovered by and in the name of the State by the local health agency and be paid into the treasury of the municipality in which the violation occurred for the general uses of the municipality.

Nothing in the bill would be construed to expand or revise the authority of a health care practitioner to dispense prescription drugs under current law.

In addition, the bill incorporates into State law certain requirements of the federal health information privacy rule authorized under the federal “Health Insurance Portability and Accountability Act of 1996” (HIPAA), as applicable to devices, kiosks, machines, and other systems for the dispensing of prescription drugs to patients, including drug samples. The bill would prohibit such a device, kiosk, machine, or other system from utilizing a patient’s individually identifiable medical information as a marketing tool, or selling or otherwise providing a patient’s individually identifiable medical information to any other entity, in an effort to promote a particular pharmacy, preferred pharmacy plan, or a particular medication whether in the form of a sample or prescription without first obtaining authorization pursuant to 45 C.F.R. s.164.508. A device, kiosk, machine, or other system would be prohibited from limiting a patient’s ability to access drugs through the device, kiosk, machine, or other system based on the patient’s choice not to provide authorization to use the patient’s medical information.

The bill also requires a device, kiosk, machine, or other system for the dispensing of prescription drugs to patients, including drug samples, to notify a patient of any charges to the patient’s insurance provider that is related to the transmittal of the patient’s individually identifiable medical information, or any benefits, services, or products the patient may receive by using the device, kiosk, machine, or other system.

The operator of the device, kiosk, machine, or other system that is in violation of the bill would be subject to such penalties as may be applicable under State or federal law.