NJ looks to take on prescription drug costs with new review board
TRENTON – Among the ideas advancing in the final months of the legislative session is the creation of a state board that would study and potentially cap prescription drug prices.
Legislation creating the Prescription Drug Affordability Board advance in the Assembly back in June and through the Senate health committee last week, despite concerns from business groups that it would lead pharmaceutical companies to move their work to the states.
Evelyn Liebman, director of advocacy for AARP New Jersey, said prescription drug prices rose twice as fast as general inflation in 2020 and have outpaced inflation every year for a decade.
“And we are here in New Jersey and all across this country sick and tired of paying the highest drug prices in the world for prescription drugs that we need to save our lives,” Liebman said.
“Given the stalemate in Congress regarding legislation directed at lowering prescription drugs, we are especially grateful that New Jersey seems ready to move on this issue,” said Renée Steinhagen, executive director of New Jersey Appleseed Public Interest Law Center.
The bill is S1066/A2418. Among the ideas that would be studied by the board would be ideas such as import drugs from Canada or other countries or imposing price caps.
Alan Zakin, a public policy consultant for the New Jersey Manufacturing Extension Program, said the goal is laudable but would ultimately cost jobs in this state.
“Life sciences and companies in Massachusetts, North Carolina and Puerto Rico will like to hear that this is the way you’re focused because those jobs that we could be creating for the unemployed and underemployed here in New Jersey will instead be going to folks in those other areas,” Zakin said.
Will Lewis, chairman and chief executive officer of the Bridgewater-based biopharmaceutical company Insmed, said the short answer is to cap patient copays, then have drug companies, insurers and benefits managers sort out what’s next.
“Always, always start with the patient,” Lewis said. “And if we can cap the costs patients pay, then the problem is no longer theirs. It’s ours.”
But Lewis said drugs can cost multiple billions of dollars to develop and the proposed board sends a scary message to investors that could harm research.
“They’re just going to see us stepping through this door, and it is going to cause them to start to say: Maybe I should just invest in Google,” he said.
Dean Paranicas, president and chief executive officer of the Health Care Institute of New Jersey, said the board would provide a disincentive to invest in research in New Jersey.
“Proposals such as this at the both federal and state level put that innovation and the ability of American citizens and patients to benefit from them at great risk,” he said.
Paranicas says the issue is with insurance plans that charge high copays for limited lists of medicines. The proposed panel wouldn’t look at insurers though would analyze pharmacy benefit managers – the companies in the middle that manage prescription benefits.
Sen. Joseph Vitale, D-Middlesex, said the board would provide a way to study access to and cost of prescriptions and doesn’t mean the state doubts the importance of pharmaceutical companies. He suggested the concerns were overblown.
“The perspective that we’re all coming from now, it’s like this apocalyptic view of what will happen if this bill passes – it’s crazy. It’s not going to happen,” Vitale said.
The bill would need approvals by the two budget committees before any possible vote by the full Legislature. The final meetings of this two-year legislative session are on Jan. 10.