A1510 1R

An Act concerning generic and biosimilar drugs and ¹amending and¹ supplementing ¹[Titles 30 and 52 of the Revised Statutes] various parts of the statutory law¹.

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

¹1. Section 1 of P.L.2015, c.130 (C.24:6K-1) is amended to read as follows:

1. As used in this act:

"Biological product" means a "biological product" as defined in subsection (i) of section 351 of the Public Health Service Act (42 U.S.C. s.262(i)), and refers to a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein other than a chemically synthesized polypeptide, or analogous product, or arsphenamine or any derivative of arsphenamine or any other trivalent organic arsenic compound, applicable to the prevention, treatment, or cure of a disease or condition of human beings.

“Biosimilar” means a “biosimilar” as defined pursuant to subsection (i) of section 351 of the Public Health Service Act (42 U.S.C. s.262(i)), and refers to a biological product that is highly similar to a specific reference product, notwithstanding minor difference in clinically inactive compounds, and that there are no clinically meaningful differences between the reference product and the biological product that has been licensed as biosimilar pursuant to section 351 of the Public Health Services Act (42 U.S.C. s.262) in terms of safety, purity, and potency of the product.

"Interchangeable" means "interchangeable" as defined in subsection (i) of section 351 of the Public Health Service Act (42 U.S.C. s.262(i)) and indicated as interchangeable by the federal Food and Drug Administration in the "Lists of Licensed Biological Products with Reference Product Exclusivity and Biosimilarity or Interchangeability Evaluations," sometimes referred to as the "Purple Book."

“Reference product” means a “reference product” as defined in subsection (i) of section 351 of the Public Health Services Act (42 U.S.C. s.262(i)) and refers to the single biological product against which a biological product is evaluated in an application for a license as a biosimilar biological product.

"Therapeutically equivalent" means a therapeutic equivalence rating of "A" has been listed by the federal Food and Drug Administration in the "Approved Drug Products with Therapeutic Equivalence Evaluations," sometimes referred to as the "Orange Book[.]" , or have no clinically meaningful differences in safety, purity, or potency (safety and effectiveness) compared to the reference product by the federal Food and Drug Administration in the “Lists of Licensed Biological Products with the Reference Produce Exclusivity and Biosimilarity or Interchangeability Evaluations,” sometimes referred to as the “Purple Book.”¹

(cf: P.L.2015, c.130, s.1)

¹2. Section 2 of P.L.2015, c.130 (C.24:6k-2) is amended to read as follows:

2. The New Jersey State Board of Pharmacy shall maintain a link to the current list of all [biological products] biosimilars determined by the federal Food and Drug Administration to be interchangeable pursuant to section 351 of the Public Health Service Act (42 U.S.C. s.262) on the Board of Pharmacy's Internet website.¹

(cf: P.L.2015, c.130, s.2)

¹3. Section 3 of P.L.2015, c.130 (C.24:6K-3) is amended to read as follows:

3. a. A pharmacist [may] shall substitute a [biological product] biosimilar for a prescribed [biological] reference product, provided that the following conditions are met:

(1) the authorized prescriber has not indicated that there shall be no substitution as set forth in section 8 of P.L.1977, c.240 (C.24:6E-7); and

(2) the [biological product] biosimilar to be substituted has been determined by the federal Food and Drug Administration to be:

(a) interchangeable with the prescribed [biological] reference product; or

(b) therapeutically equivalent to the prescribed [biological] reference product or any other interchangeable biosimilar to the prescribed reference product.

b. [If a pharmacist dispenses a biological product, the pharmacist or the pharmacist's designee shall, within five business days following the dispensing of the biological product, communicate to the prescriber the specific product provided to the patient, including the name of the product and the manufacturer. No communication shall be required under this subsection when:

(1) there is no biological product that has been determined by the federal Food and Drug Administration to be either:

(a) interchangeable with the product prescribed; or

(b) therapeutically equivalent to the product prescribed; or

(2) a refill prescription is not changed from the product dispensed on the prior filling of the prescription.

c. The communication requirement under subsection b. of this section may be satisfied by making an entry in an interoperable electronic medical records system or an electronic pharmacy record that can be accessed electronically by the prescriber, or through the use of another electronic prescribing technology that can be accessed electronically by the prescriber. Entry into an electronic records system as described in this paragraph is presumed to provide notice to the prescriber. Otherwise, the communication may be conveyed using other electronic means, if available, or by facsimile.

d.] A pharmacist who substitutes a [biological product] biosimilar in compliance with this section shall record, on the prescription label and record of dispensing, the product name and manufacturer of the [biological product] biosimilar dispensed, followed by the words: "Substituted for" and the name of the [biological] reference product for which the prescription was written.

[e]c. The same recordkeeping requirements as apply to the dispensing of drugs shall apply to the dispensing of [biological products] a biosimilar.

[f] d. A pharmacist who substitutes a [biological product] biosimilar in compliance with this section shall incur no greater liability in filling the prescription by dispensing the [biological product] biosimilar than would be incurred in filling the prescription by dispensing the prescribed [biological] reference product.¹

(cf: P.L.2015, c.130, s.3)

¹4. (New section) a. If a biosimilar or interchangeable drug is approved by the federal Food and Drug Administration and marketed pursuant to the approval, and has a lower Wholesale Acquisition Cost (WAC) to the carrier or pharmacy benefits manager than the reference product for which it is deemed biosimilar or interchangeable, then a carrier or pharmacy benefits manager shall immediately review the biosimilar or interchangeable drug for inclusion in its formulary. Upon inclusion in its formulary, the carrier or pharmacy benefits manager shall:

(1) immediately make the biosimilar or interchangeable drug available with the same or more favorable cost sharing, including actual out-of-pocket cost, relative to the reference product; and

(2) not impose any prior authorization, step therapy limitation, or other restrictions on a health care prescriber or pharmacy that makes it more difficult for a covered person to obtain coverage of, or access to, the biosimilar or interchangeable drug than the reference product.

b. As used in this section:

“Carrier” means an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State and shall include the State Health Benefits Program, School Employees’ Health Benefits Program, and managed care organizations contracted with the Division of Medical Assistance and Health Services in the Department of Human Services to provide benefits to Medicaid beneficiaries.

“Biological product” means the same as defined in subsection (i) of section 351 of the Public Health Service Act (42 U.S.C. s.262(i)), and refers to a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein other than a chemically synthesized polypeptide, or analogous product, or arsphenamine or any derivative of arsphenamine or any other trivalent organic arsenic compound, applicable to the prevention, treatment, or cure of a disease or condition of human beings.

“Biosimilar” means the same as defined pursuant to subsection (i) of section 351 of the Public Health Service Act (42 U.S.C. s.262(i)), and refers to a biological product that is highly similar to a specific reference product, notwithstanding minor difference in clinically inactive compounds, and that there are no clinically meaningful differences between the reference product and the biological product that has been licensed as biosimilar pursuant to section 351 of the Public Health Services Act (42 U.S.C. s.262) in terms of safety, purity, and potency of the product.

“Reference product” means the same as defined in subsection (i) of section 351 of the Public Health Services Act (42 U.S.C. s.262(i)) and refers to the single biological product against which a biological product is evaluated in an application for a license as a biosimilar biological product.¹

¹[1.] 5.¹ As used in this act:

“Brand drug" means a drug for which an application has been approved under 21 U.S.C. s.355(c), or a biological product, other than a biosimilar, that is licensed under 42 U.S.C. s.262(a).

"Generic drug" means a drug that is approved under 21 U.S.C. s.355(j) and is listed in the Approved Drug Products with Therapeutic Equivalence Evaluations publication by the federal Food and Drug Administration as therapeutically equivalent to a reference drug, even if the manufacturer of the reference drug applies a trade name to the drug.

“Managed care organization” means a health maintenance organization contracted with the Division of Medical Assistance and Health Services in the Department of Human Services to provide benefits to enrolled beneficiaries under the Medicaid program, established pursuant to P.L.1968, c. 413 (C.30:4D-1 et seq.).

“Reference listed drug” means the listed drug identified by the federal Food and Drug Administration as the drug product upon which an applicant relies in seeking approval of its application submitted under 21 U.S.C. s.355(j).

“Reference product” means a single biological product, licensed pursuant to 42 U.S.C. s.262(a), against which a proposed biosimilar or interchangeable product is compared, and listed as a reference product in the Database of Licensed Biological Products by the federal Food and Drug Administration.

“Wholesale acquisition cost” means the manufacturer’s listed price for the drug or biological to wholesalers or direct purchasers in New Jersey, as defined in 42 U.S.C. s.1847A(c)(6)(B), not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data.

¹[2.] 6.¹ a. When a brand drug is prescribed to treat an enrollee who has not previously been treated with the prescribed drug, the enrollee shall receive a biosimilar product, if one is available.

b. A healthcare provider may appeal the application of subsection a. of this section to a particular patient pursuant to subsection d. of section 4 of P.L.2025, c.50 (C.30:4D-7xx).

¹[3.] 7.¹ a. A managed care organization shall publish and maintain an accurate and complete list of all covered drugs on the organization’s formulary, including any tiering structure that the organization has adopted and any restrictions on the manner in which a drug is obtained, in a manner that is easily accessible to current and prospective enrollees, the State, and the general public.

b. (1) A formulary shall be easily accessible on the managed care organization’s public website through a clearly identifiable link or tab without requiring an individual to create or access an account or enter a policy number.

(2) If a managed care organization makes a change to the formulary during the plan year, it shall be updated within 30 calendar days and contain, in bold type, the date of the update, with the updates clearly identifiable.

¹[4. ] 8.¹ a. If a generic drug is approved by the federal Food and Drug Administration, marketed pursuant to the approval, and has a wholesale acquisition cost that is less than the wholesale acquisition cost of the reference listed drug on the generic drug’s initial date of marketing, then a managed care organization that provides coverage for the generic drug’s reference listed drug at the time of the generic drug’s marketing date shall:

(1) immediately make the generic drug available on the formulary with more favorable cost sharing, including actual out-of-pocket costs, relative to the reference listed drug; and

(2) not impose any prior authorization, step therapy, or other limitation on coverage of the generic drug for which formulary placement is required under this subsection, nor impose any restriction on a pharmacy through which an enrollee may obtain the generic drug, that makes it more difficult for an enrollee to obtain coverage of, or access to, the generic drug than the reference listed drug.

b. A generic drug added to a formulary pursuant to subsection a. of this section shall remain on the formulary for as long as the wholesale acquisition cost of the generic drug is lower than the wholesale acquisition cost of the reference listed drug.

¹[5.] 9.¹ a. If a biosimilar is licensed by the federal Food and Drug Administration, is marketed pursuant to the licensure, and has a wholesale acquisition cost that is less than the wholesale acquisition cost of the reference product of the biosimilar on the initial date of marketing, then a managed care organization that provides coverage for the biosimilar’s reference product at the time of the biosimilar’s marketing date shall:

(1) immediately make at least one biosimilar available on the formulary on a tier with more favorable cost sharing, including actual out-of-pocket costs, relative to the reference product; and

(2) not impose any prior authorization, step therapy, or other limitation on coverage of a biosimilar for which formulary placement is required under this subsection, nor impose any restriction on a pharmacy through which an enrollee may obtain the biosimilar, that makes it more difficult for an enrollee to obtain coverage of, or obtain access to, the biosimilar than the reference product.

b. A biosimilar added to a formulary pursuant to subsection a. of this section shall remain on the formulary for so long as the wholesale acquisition cost of the biosimilar is lower than the wholesale acquisition cost of the reference listed drug.

¹[6.] 10.¹ Nothing in this act shall require a managed care organization to continue providing coverage for a brand drug after a generic drug or biosimilar is approved or licensed, as applicable, and marketed.

¹[7.] 11.¹ Nothing in sections 1 through 6 of this act shall require a managed care organization to provide coverage for a brand drug, generic drug, or biosimilar if the individuals who develop the formulary of the organization determine that the drug or biosimilar is no longer medically appropriate or cost-effective.

¹[8.] 12.¹ Nothing in sections 1 through 7 of this act shall interfere with a pharmacist complying with the “New Jersey Pharmacy Practice Act,” P.L.2003, c.280 (C.45:14-40 et seq.).

¹[9.] 13.¹ The Department of Human Services shall adopt rules and regulations, pursuant to the “Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to implement sections 1 through 8 of this act.

¹[10.] 14.¹ As used in this act:

“Brand drug" means a drug for which an application has been approved under 21 U.S.C. s.355(c), or a biological product, other than a biosimilar, that is licensed under 42 U.S.C. s.262(a).

“Covered person” means a person on whose behalf the State Health Benefits Program or the School Employees’ Health Benefits Program is obligated to pay benefits or provide services pursuant to the health benefits plan.

"Generic drug" means a drug that is approved under 21 U.S.C. s.355(j) and is listed in the Approved Drug Products with Therapeutic Equivalence Evaluations of the federal Food and Drug Administration as therapeutically equivalent to a reference drug, even if the manufacturer of such drug applies a trade name to the drug.

“Health benefits plan” means a plan providing health care benefits coverage for public employees and their dependents offered by the State Health Benefits Program or the School Employees’ Health Benefits Program.

“Vendor” means a third-party administrator that conducts claims administration, network management, claims processing, or other related services for the State Health Benefits Commission or the School Employees’ Health Benefits Commission.

“Wholesale acquisition cost” means the manufacturer’s list price for the drug or biological to wholesalers or direct purchasers in New Jersey, as defined in 42 U.S.C. s.1847A(c)(6)(B), not including prompt pay or other discounts, rebates or reductions in price, for the most recent month for which the information is available, as reported in wholesale price guides or other publications of drug or biological pricing data.

¹[11.] 15.¹ a. When a brand drug is prescribed to treat a covered person who has not previously been treated with the prescribed drug, the covered person shall receive a biosimilar product, if one is available.

b. A healthcare provider may appeal the application of subsection a. of this section to a particular patient pursuant to section 9 of P.L.2025, c.50 (C.52:14-17.28j).

¹[12.] 16.¹ a. A vendor shall publish and maintain an accurate and complete list of all covered drugs on the vendor’s formulary, including any tiering structure that the vendor has adopted and any restrictions on the manner in which a drug is obtained, in a manner that is easily accessible to a covered person, the State, and the general public.

b. (1) A formulary shall be easily accessible on the vendor’s public website through a clearly identifiable link or tab without requiring an individual to create or access an account or enter a policy number.

(2) If a vendor makes a change to the formulary during the plan year, the formulary shall be updated within 30 calendar days and shall contain, in bold type, the date of the update, with the updates clearly identifiable.

¹[13.] 17.¹ a. If a generic drug is approved by the federal Food and Drug Administration, marketed pursuant to such approval, and has a wholesale acquisition cost that is less than the wholesale acquisition cost of the reference listed drug on the generic drug’s initial date of marketing, then a vendor that provides coverage for the generic drug’s reference listed drug at the time of the generic drug’s marketing date shall:

(1) immediately make the generic drug available on the formulary with more favorable cost sharing, including actual out-of-pocket costs, relative to the reference listed drug; and

(2) not impose any prior authorization, step therapy, or other limitation on coverage of a generic drug for which formulary placement is required under this subsection, nor impose any restriction on a pharmacy through which a covered person may obtain the generic drug, that makes it more difficult for a covered person to obtain coverage of, or access to, the generic drug than the reference listed drug.

b. A generic drug added to a formulary pursuant to subsection a. of this section shall remain on the formulary for so long as the wholesale acquisition cost of the generic drug is lower than the wholesale acquisition cost of the reference listed drug.

¹[14.] 18.¹ a. If a biosimilar is licensed by the federal Food and Drug Administration, is marketed pursuant to the licensure, and has a wholesale acquisition cost that is less than the wholesale acquisition cost of the reference product of the biosimilar on the initial date of marketing, then a vendor that provides coverage for the biosimilar’s reference product at the time of the biosimilar’s marketing date shall:

(1) immediately make at least one biosimilar available on the formulary on a tier with more favorable cost sharing, including actual out-of-pocket costs, relative to the reference product; and

¹[15.] 19.¹ Nothing in this act shall require a vendor to continue providing coverage for a brand drug after a generic drug or biosimilar is approved or licensed, as applicable, and marketed.

¹[16.] 20.¹ Nothing in sections 10 through 15 of this act shall require a vendor to provide coverage for a brand drug, generic drug, or biosimilar if the individuals that develop the organization’s formulary determine that the drug or biosimilar is no longer medically appropriate or cost-effective.

¹[17.] 21.¹ Nothing in sections 10 through 16 of this act shall interfere with a pharmacist complying with the “New Jersey Pharmacy Practice Act,” P.L.2003, c.280 (C.45:14-40 et seq.).

¹[18.] 22.¹ The Department of Banking and Insurance shall adopt rules and regulations, pursuant to the “Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as may be necessary to implement sections 10 through 17 of this act.

¹[19.] 23.¹ This act shall take effect on January 1, 2027 and shall apply to all contracts and policies delivered, issued, executed, or renewed on or after that date.