TO:                      Members of the Assembly Financial Institutions and Insurance Committee

FROM:                Hilary Chebra, Manager, Government Affairs, CCSNJ

RE:                       A-2418 (McKeon/Moen)

DATE:                  June 2, 2021

The Chamber of Commerce Southern New Jersey (CCSNJ) would like to voice our opposition to A-2418 (McKeon/Moen), which would establish the Prescription Drug Affordability Board. While the CCSNJ supports the goal of ensuring quality and affordable health care, we are concerned that this bill will place burdensome mandates on an industry that has been, and remains, vital to the state’s recovery from the COVID-19 pandemic. 

As written, this bill establishes the Prescription Drug Affordability Board in the Division of Consumer Affairs in the New Jersey Department of Law and Public Safety (NJLPS). Specifically, the bill requires the Prescription Drug Affordability Board to conduct a study of the entire pharmaceutical distribution and payment system in the state, as well as policy options being used in other states and countries to lower the list price of pharmaceutical drug products. If the Board determines that it is in the best interests of the state to develop a process to establish upper payment limits for prescription drug products, the Board will be required to draft a plan of action that includes criteria to establish upper payment limits or consideration of certain costs.

 Although well-intended, A-2418 (McKeon/Moen) could limit access to important medication for New Jersey residents. The CCSNJ is concerned that if a pharmacy or provider cannot obtain a medicine at the government price, then it will not be available in the state. The bill also does not take into account the role of insurers, pharmacy benefit managers (PBMs), and wholesalers in determining cost of medication for patients. These stakeholders often dictate the terms of coverage for medicines and the amount a patient ultimately pays, which frequently include discounts and rebates.

Additionally, the CCSNJ is concerned that this bill will adversely impact the critically important pharmaceutical industry in New Jersey by disincentivizing investment into research and development. The world has seen how important research and development in this field is over the past year and should be doing all we can to incentivize investment in pharma, especially given the important role it plays in New Jersey’s economy.  

For these reasons, the CCSNJ respectfully opposes A-2418 (McKeon/Moen).