A Plan to Lower Prescription Drug Prices in New Jersey
With the cost of many prescription medications continuing to shoot through the roof a New Jersey lawmaker is pushing a plan to create a special panel to investigate how to hold the line of the price of drugs and even lower them for Garden State residents.
A measure, A-1747 sponsored by Assemblyman John McKeon, D-Essex, calls for the establishment of the Prescription Drug Affordability Board, as part of the Department of Law and Public Safety.
Drug prices keep rising
He said we need to do something because the cost of many prescription drugs is rising so fast that many people simply can’t afford to pay for them.
“When we look at, in 1996 a month’s supply of insulin was $20, and in 2020 it’s $300, that’s a fourteen hundred percent increase, that’s unsustainable,” he said.
He noted, “1 in 8 people in New Jersey ration their medications and 1 in 4 find it difficult to afford, and my God, this isn’t a partisan issue, it’s one that we all feel.”
McKeon said the pharmaceutical industry has done wonderful work but in 2020, 245 new drugs were put on the market and the ones already available all went up significantly in price so something must be done to hold the line on costs.
He said the Pharmaceutical Board would review what happens to a drug once it’s created.
Reviewing the system
“They would start with the manufacturers and how it is that they set pricing, and making recommendations on transparency which is important from that perspective,” he said.
He said the Board would also carefully look at the role of the Pharmacy Benefit Manager, PBM, and how they are involved in setting drug prices.
“The insurance companies create and hire them and they’re the ones that basically, they’re just supposed to adjust claims, but that’s like a wildfire that’s gotten out of control,” said McKeon.
He said PBM’s in many cases go well beyond adjusting claims.
Why are they needed?
“They’re into the business of dealing between the consumer, the pharmacies, the wholesaler, and that’s where there’s significant cost that is a part of the system,” he said.
He noted PBS’s are not used in other developed countries, where prescription drug prices are much lower than in the U.S.
McKeon said he has no doubt the Board could make solid recommendations that if adopted by the legislature, would wind up saving consumers money.
The Assembly Banking and Financial Institutions Committee has given the green light to the measure, which could be considered by the full Lower House in the coming weeks.