NJ Bill Would Create Board To Fight High Prescription Drug Costs

NEW JERSEY — A bill that would establish a state Prescription Drug Affordability Board in New Jersey could help to reel in the “exorbitant” prices of medicine, supporters say. But one of the state’s largest business advocacy groups is opposing the proposed law, arguing that it’s not an effective way to tackle an otherwise worthy goal.

A-1747 passed a vote Tuesday in the Assembly Health Committee, and now heads to the speaker for further consideration. It calls for the establishment of a Prescription Drug Affordability Board. The bill would appropriate $1 million in fiscal year 2022 for salaries, benefits, and “one-time start-up costs,” according to the Office of Legislative Services.

Read the full text here.

According to one of its primary sponsors, Assemblyman John McKeon (District 27), millions of U.S. residents, including those in New Jersey, have been forced to ration or even skip taking necessary medications because of their high prices.

If it eventually passes a full vote in the Legislature and gets Gov. Phil Murphy’s signature, the bill would create a state-run board that would have several duties, McKeon said:

“The members would be responsible for conducting studies related to the pharmaceutical distribution and payment system, researching policies being used in other states and countries to lower the cost of pharmaceutical drug products, and determining if it is in the state’s interest to establish upper payment limits … The board would also be required to conduct a study on the generic drug market, identify which prescription drugs may present affordability challenges due to high wholesale costs, and submit reports to the Legislature on prescription drug price trends and recommendations to make prescription drugs more affordable.”

“There is no reason why the same prescription drugs should cost around 2.5 times more in the United States than they do in other countries,” McKeon argued after the bill was reported out of committee in February.

“We have to take action to offer New Jersey residents relief from high prescription drug costs,” McKeon said. “A Prescription Drug Affordability Board will provide us with critical information that will be invaluable in our efforts to understand why the prices have increased and how we can ensure that all New Jerseyans can afford the medications they need.”

A companion bill, S-329, was referred to Senate Budget and Appropriations Committee in March.

‘LAUDABLE, BUT NOT THE MOST EFFECTIVE’

The New Jersey Business and Industry Association (NJBIA) has opposed the bill, charging that it will “place price controls on the pharmaceutical industry,” rather than taking a “system-wide approach” to fighting unreasonable prices.

“The goal of lowering prescription drug prices is laudable, but it is not the most effective way to address patient out-of-pocket drug costs,” NJBIA Chief Government Affairs Officer Chrissy Buteas said.

“The fact is, addressing the pricing of health care is much more complex than setting a price mechanism for a multi-level health sector,” Buteas said. “Without that holistic approach, New Jersey will instead be sending a message to R&D companies that there are much more attractive states to invest in.”

Buteas said that New Jersey lags its regional competitors in critical indicators of innovation and this legislation would only hold the state back in the innovation space.

“The NJBIA shares Governor Murphy’s vision of New Jersey reclaiming its role as the innovation state,” Buteas said. “This legislation runs counter to that vision and only takes a punitive approach against pharmaceutical companies that will inhibit private investment and research, while also negatively impacting an industry that is so crucial for New Jersey’s economy.”

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