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Assemblyman John McKeon. (Photo: Kevin Sanders for the New Jersey Globe).

Prescription drug pricing package moves one step forward through legislature

Three Murphy-backed bills pass Health Committee alongside separate drug affordability board legislation

By Joey Fox, May 24 2022 4:45 pm

Four bills designed to lower the price of prescription drugs, three of which are part of a package backed by Gov. Phil Murphy, cleared the Assembly Health Committee today after several months in limbo and several hours of comments from both business and progressive groups.

In February, Murphy unveiled a set of prescription drug proposals, including bills authorizing the Department of Community Affairs to collect and aggregate annual data on drug prices; creating transparency requirements for pharmacy benefits managers; and mandating that insurance providers cover EpiPens and asthma inhalers.

A separate bill to create a Prescription Drug Affordability Board (PDAB), tasked with  “protecting New Jersey residents, state and local governments, health benefits plans, health care providers, licensed pharmacies, and other stakeholders … from the high costs of prescription drug products,” also came before the committee. Unlike the other three bills, it’s not clear whether Murphy and other Democratic leaders are fully behind the effort to create such a board.

All four bills were previously cleared by the Assembly Financial Institutions Committee in March, and were sent to the Health Committee for second reading; their Senate equivalents, meanwhile, are awaiting second reading in the Senate Budget Committee.

“Transparency shines a light on drug pricing and holds manufacturers accountable for increases or high prices for new prescriptions,” Assemblyman John McKeon (D-West Orange), a prime sponsor on each of the bills, said in a statement. “Pharmacy benefits managers were created as middlemen to reduce costs but a lack of transparency has allowed them to operate virtually unchecked… This legislative package would help solve that problem.”

The PDAB proposal elicited praise at today’s hearing from a number of progressive groups, who said that it would strengthen the state’s ability to rein in prescription drug prices and hold bad actors accountable.

“The only way we will be able to fully understand drug pricing and rein in patient costs is [by establishing] an independent, neutral Prescription Drug Affordability Board,” testified Laura Waddell of New Jersey Citizen Action. “With a comprehensive analysis of the entire pharmaceutical supply chain, the Board would sift through all the noise to hold all actors accountable so that no one gets a free pass.”

Business and pharmaceutical groups, however, criticized the bill and said it would do little to lower drug costs; joining them in opposition was Sarah Yourman Tota, a chronically ill attendee who expressed her fears that overregulation could prevent the development of lifesaving drugs like those she uses.

“I am very concerned that the Prescription Drug Affordability Board … could undermine the development of new lifesaving and life-changing medications like the one that allowed me to manage and treat my cystic fibrosis complications,” Yourman Tota said. “Without the discovery of new drugs, rare disease patients of the future will be left with far fewer options for a cure.”

Representatives from the pharmaceutical industry, alongside several Republican legislators, similarly expressed discomfort with the bill requiring reporting on drug price data to the Department of Community Affairs.

“This legislation is perhaps overly burdensome when balanced against the benefit that it would have,” Assemblyman Brian Rumpf (R-Little Egg Harbor) said. “I would suggest that there are perhaps better uses for almost a million dollars of the state’s money than creating additional anti-competitive red tape for the businesses of New Jersey.”

Somewhat surprisingly, several progressive testifiers who supported the PDAB proposal also spoke against the price reporting bill, arguing that it was a toothless measure that would siphon resources away from more valuable areas.

“We really urge this committee to reject this bill, and instead to allocate the state’s financial resources to the establishment of the PDAB,” Renée Steinhagen of the New Jersey Appleseed Public Interest Law Center. “We think [it is] an ill-advised bill that, from our perspective, has been introduced and supported by the administration solely to sabotage the legislature’s serious effort to address the affordability problem of prescription drugs.”

The PDAB and drug price reporting bills were both ultimately cleared on 8-4 party-line votes, while the EpiPen and inhaler bill passed unanimously and the pharmacy business manager bill received three abstentions from Republican legislators.

After the four-hour meeting ended, Assembly Health Chair Herb Conaway (D-Delran) implied that the PDAB proposal may be less of a priority going forward, though he did note that its success in committees so far indicates it has some amount of support from legislative leadership.

“I wholeheartedly support these measures, I think the governor is leading us in the right direction on this,” Conaway said. “Our work’s not done, and we don’t have to do everything all at once. I’m very confident that the three bills in the governor’s package will find their way to his desk in short order, and we’ll see what else over the course of time bubbles up.”

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