Bill > A1502

Introduced Session

This bill, the "Patient and Provider Protection Act," establishes certain requirements for pharmacy benefits managers relating to contractual agreements with manufacturers and pharmacies. Under the bill, pharmacy benefits managers have a fiduciary duty to act in the best interests of a carrier with which it contracts. In addition, pharmacy benefits managers are prohibited from engaging in any marketing activity that uses inaccurate or misleading information to convince or attempt to convince covered persons to use a contracted or network pharmacy. Furthermore, the bill stipulates that an agreement between a pharmacy benefits manager and a manufacturer is not valid if the contract conditions any rebate on the exclusion of generic drugs from coverage. The bill stipulates that a commercial market plan contract between a pharmacy benefits manager and a contracted pharmacy or network pharmacy is, in the event of a dispute, to be presumed to be a "contract of adhesion." A contract of adhesion is a standardized contract in which one party has significantly superior bargaining power. In a contractual dispute involving a contract of adhesion, the courts may subject the contract to special scrutiny. The bill also requires pharmacy benefits managers, for a prescription drug, to reimburse: (1) a contracted pharmacy or a network pharmacy at a rate that is at least equal to the pharmacy's cost of acquiring the prescription drug; and (2) the State fee-for-service benchmark of the National Average Drug Acquisition Cost (NADAC) plus the prevailing State defined Medicaid professional dispensing fee. If the NADAC is not established for a specific national drug code, the ingredient reimbursement rate shall default to the Wholesale Average Cost (WAC), or the Suggested Wholesale Price (SWP). The bill also stipulates that a carrier may not engage in differential payment pricing in commercial market plans. A pharmacy benefits manager is required to reimburse all contracted pharmacies at the same rate regardless of ownership or affiliation. Under the bill, a pharmacy and therapeutics committee is to ensure that no decision concerning the inclusion of a prescription drug in a formulary system, or in a particular tier of the formulary system, places a prescription drug with a higher cost to the patient in a more favorable position than a generic or biosimilar prescription drug with a lower cost.

AI Summary

Committee Categories

Roy Freiman (D)*,  Lou Greenwald (D)*,  Dan Hutchison (D)*,  Luanne Peterpaul (D)*,  Gary Schaer (D)*,  Alexander Schnall (D)*,  Sterley Stanley (D)*,  Verlina Reynolds-Jackson (D),  Heather Simmons (D),  Balvir Singh (D), 

Introduced, Referred to Assembly Financial Institutions and Insurance Committee (on 01/13/2026)

Official Document