S4717

An Act concerning pharmacy benefits managers and pharmacy practice sites and supplementing P.L.2003, c.280 (C.45:14-40 et seq.).

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

1. The Legislature finds and declares that:

a. It is beneficial to the State to support patient access to prescription drugs and pharmacy services at fair prices in a market that supports optimal patient care.

b. The Federal Trade Commission and the United States House Committee on Oversight and Government Reform have found evidence of anticompetitive business tactics that have driven locally-operated pharmacies out of business, limiting patient choices and inflating drug prices at pharmacies owned by pharmacy benefits managers.

c. The State seeks to minimize conflicts of interest by prohibiting pharmacy benefits managers from being both a price setter and price taker.

d. It is the intent of the Legislature to improve healthcare delivery in the pharmacy market for patients by eliminating certain anticompetitive behavior of pharmacy benefits managers as a basic tenant of this act.

2. a. A pharmacy benefits manager shall not acquire a direct or indirect interest in, or hold, directly or indirectly, a permit to operate a pharmacy practice site pursuant to the “New Jersey Pharmacy Practice Act,” P.L.2003, c.280 (C.45:14-40 et seq.).

b. The board shall deny, revoke, or refuse to renew the permit of a pharmacy practice site that violates the provisions of this act.

c. (1) The board may issue a special permit, pursuant to N.J.A.C.13:39-4.16, for certain rare, orphan, or limited distribution drugs otherwise unavailable in the market to a patient or a pharmacy practice site that would otherwise be prohibited pursuant to this section.

(2) The board may assess the need for rare, orphan, or limited distribution drugs for a special permit issued pursuant to paragraph (1) of this subsection before the revocation of, or refusal to renew, an existing permit for a pharmacy practice site.

(3) If an assessment performed by the board pursuant to paragraph (2) of this subsection determines that a rare, orphan, or limited distributed drug is otherwise unavailable in the market to a patient or pharmacy practice site that would otherwise be prohibited pursuant to this section, the board shall convert the existing regular permit for the prohibited pharmacy to a special permit issued pursuant to this subsection that shall be valid for a period of no less than 90 days.

(4) The board shall adopt pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules to effectuate the purposes of this subsection, specifically:

(a) the process in which a patient, pharmacy practice site, or healthcare provider may notify the board of a rare, orphan, or limited distribution drug unavailable in the market;

(b) the process in which a pharmacy practice site may request a special permit pursuant to paragraph (1) of this subsection;

(d) the process for emergency determinations due to patient need.

(5) This subsection shall expire on September 1, 2028.

3. a. The board shall conduct an initial assessment of each active permit issued pursuant to the “New Jersey Pharmacy Practice Act,” P.L.2003, c.280 (C.45:14-40 et seq.) as of the date of enactment of this act, and shall send written notice, by mail or electronic mail, at least 90 days before July 1, 2027, to each pharmacy practice site that the board reasonably believes will violate section 2 of this act.

(1) The written notice required pursuant to this subsection shall include:

(a) a list of each pharmacy benefits manager that holds a direct or indirect interest in, or otherwise holds, directly or indirectly, a permit issued pursuant to the “New Jersey Pharmacy Practice Act,” P.L.2003, c.280 (C.45:14-40 et seq.);

(b) a phone number and electronic mail address that is monitored by the board during regular business hours; and

(c) a list of each State pharmacy that holds an active permit that is not reasonably expected to violate section 2 of this act as of July 1, 2027. The list shall include:

(i) the name of the pharmacy;

(ii) the phone number of the pharmacy;

(iii) the physical address of the pharmacy;

(iv) the Internet website of the pharmacy, if known; and

(v) an electronic mail address for the pharmacy, if known.

(2) If the board has a searchable Internet website that includes the information required pursuant to subparagraph (c) of paragraph (1) of this subsection, the board may provide the address for the website in lieu of separately compiling the list required in subparagraph (c).

b. (1) A pharmacy practice site that receives a written notice from the board pursuant to subsection a. of this section shall provide written notice, by mail or electronic mail, or through a patient portal of a pharmacy practice site, if available, at least 60 days before July 1, 2027 to each patient and prescribing healthcare provider of the patient within the past 12 months, informing the patient and healthcare provider that the site can no longer dispense the provider’s prescription order on or after July 1, 2027.

(2) A written notice provided to a patient and healthcare provider pursuant to paragraph (1) of this subsection shall include information provided to a pharmacy practice site pursuant to subparagraphs (b) and (c) of paragraph (1) of subsection a. of this section.

4. Sections 1 and 3 of this act shall take effect immediately, and section 2 shall take effect on July 1, 2027; however, the New Jersey State Board of Pharmacy may take any anticipatory administrative action in advance as shall be necessary for the implementation of section 2 of this act.

STATEMENT

This bill prohibits pharmacy benefits managers from operating pharmacy practice sites.

Under the bill, a pharmacy benefits manager will be prohibited, beginning on July 1, 2027, from acquiring a direct or indirect interest in, or holding, directly or indirectly, a permit to operate a pharmacy practice site pursuant to the “New Jersey Pharmacy Practice Act.” The New Jersey State Board of Pharmacy may issue a special permit to a pharmacy practice site in violation of this bill to continue operation for certain rare, orphan, or limited distribution drugs that are otherwise unavailable in the market to a patient or a pharmacy practice site that would otherwise be prohibited pursuant to the bill, but will only be valid until September 1, 2028. The board may assess the need for a special permit before the revocation of, or refusal to renew, an existing permit for a pharmacy practice site, and will be required to adopt rules to establish and implement a process and timeline to issue a special permit.

The bill also requires the New Jersey State Board of Pharmacy to conduct an initial assessment of each active permit that was issued under the “New Jersey Pharmacy Practice Act” and to send written notices, by mail or electronic mail, at least 90 days before July 1, 2027, to each pharmacy practice site that the board reasonably believes will violate the provisions of this bill. Pharmacy practice sites that receive a written notice from the board concerning the site’s violation of this bill will be required to provide written notice, by mail or electronic mail, or through a patient portal of a pharmacy practice site, if available, at least 60 days before July 1, 2027, to each patient and prescribing healthcare provider of the patient within the previous 12 months to inform the patient and healthcare provider that the pharmacy will no longer dispense the provider’s prescription order on or after July 1, 2027. Written notices provided to a patient or healthcare provider will be required to include a phone number and electronic mail address that is monitored by the board during regular business hours and a list of State pharmacies that hold an active permit and are not reasonably expected to violate this bill as of July 1, 2027.