TRENTON, NJ — A new bill introduced in the New Jersey Senate aims to set minimum reimbursement rates for pharmacies serving Medicaid patients and ensure patients can access prescription drugs from any willing provider.
Key Points
- Senate Bill 3538 mandates Medicaid reimbursements to pharmacies of at least drug cost plus $10.92 per prescription
- The bill requires managed care organizations to allow patient choice of any in-network pharmacy
- A state audit would examine Medicaid drug spending and fund flow from insurers to pharmacies
Sponsored by Senators Vin Gopal (D-11) and Linda R. Greenstein (D-14), the “Equitable Drug Pricing and Patient Access Act” would standardize how pharmacies are paid for prescriptions under both Medicaid fee-for-service and managed care. The legislation sets the minimum reimbursement rate as the national average drug acquisition cost plus a professional dispensing fee of $10.92.
The bill also strengthens pharmacy access by requiring Medicaid managed care plans to allow any qualified, in-network pharmacy to dispense covered medications without regard to cost or restrictive pharmacy benefit manager (PBM) rules. Pharmacies cannot be forced to accept reimbursement below their cost of acquisition.
Patient access and provider fairness emphasized
Under the legislation, patients enrolled in Medicaid managed care would have the right to choose any qualified pharmacy as long as the provider agrees to standard terms. No pharmacy could be excluded if it meets contract conditions.
Out-of-network pharmacies would be reimbursed at the same rate as in-network providers for covered drug services, further increasing flexibility for Medicaid beneficiaries.
The bill authorizes the State Auditor to perform a financial review of Medicaid drug pricing practices to determine potential savings and evaluate the flow of funds from managed care organizations through PBMs to pharmacies.
Implementation and oversight
The Commissioner of Human Services is directed to apply for necessary federal approvals and may adopt rules to support the bill’s rollout. The measure would take effect seven months after enactment and apply to new Medicaid contracts from that point forward.
Total Medicaid drug costs in New Jersey climbed from $2.1 billion in fiscal year 2019 to $2.8 billion in 2024, prompting legislators to seek reforms targeting cost transparency and equitable reimbursement.
New Jersey’s proposed drug pricing law would mandate fair pharmacy pay and broaden prescription access for Medicaid patients statewide.
