Every New Jersey resident deserves access to affordable medicine. Yet, the burden of high and rising drug prices has put essential medications out of reach for many, harming their health, well-being, and financial stability. To combat this crisis, New Jersey lawmakers recently enacted a number of prescription drug reforms, including a law establishing the Drug Affordability Council.
Even with these new laws, however, more actions are needed to fully address the prescription affordability crisis in New Jersey. This analysis highlights the significant role of the Drug Affordability Council in advancing future drug pricing reforms, and includes four recommendations for the council so it can reach its full potential.
New Reforms Take Important Steps But Leave Many Behind
During the 2023 state budget negotiations, lawmakers advanced several significant initiatives to address prescription drug affordability. A package of bills signed by Governor Murphy include measures to increase transparency in the pharmaceutical market, better regulate pharmacy benefit managers (the middlemen of the pharmaceutical industry), and cap prices for a few essential drugs (insulin, EpiPens, and asthma inhalers) in certain insurance plans.[i] One of these bills, S1615, also established the Drug Affordability Council. Together, these reforms complement actions taken at the federal level in the Inflation Reduction Act, which took steps to improve drug affordability for Medicare enrollees.[ii]
Yet, like a rope bridge with weak and missing planks, the reforms still leave a significant amount of work to achieve affordable prescription drugs for all who need them. Many of these reforms only help residents enrolled in particular insurance plans: the federal Inflation Reduction Act, as mentioned, focuses on Medicare enrollees, while many of the state-level reforms focus on individuals insured through certain state-regulated plans or, at their broadest, help those with insurance coverage that includes extremely high copays for medicines. This leaves many people without meaningful assistance, including those who are enrolled in employer self-funded plans as well as those who are uninsured.
The Drug Affordability Council Can Help Advance Future Reforms
Addressing this affordability crisis for all residents requires addressing the root causes of high drug prices that harm everyone, regardless of insurance coverage. Fortunately, the new Drug Affordability Council holds enormous potential to address these root causes and transform the lives of countless patients who have struggled to access life-saving treatments. While the Council cannot unilaterally enact and implement new reforms, it can provide policy and regulatory recommendations to state lawmakers and administrative officials to stop pharmaceutical companies from inflating drug prices, thereby holding them accountable and curbing unjustifiable cost hikes that hinder patients’ access to life-saving treatments.
The Council will also have access to data collected through newly enacted transparency measures, as well as any information gathered through its own research and convenings. With this unprecedented level of data access, its members will be able to produce detailed recommendations for legislative and executive measures for effectively lowering pharmaceutical costs. These reports mark a crucial step in prioritizing the needs of patients over corporate interests.
Recommendations for the Drug Affordability Council
State leaders must set a strong foundation for the Council as it gets up and running to ensure it fulfills its potential in meaningfully addressing high prescription drug costs. This starts with thoughtful appointments to the Council, including those with a patient/consumer perspective, and by setting clear expectations on the need for transparency, community input, and bold recommendations based on best practices from other states. Below are four recommendations that the Murphy administration should consider over the coming months.
1. Appoint Members Who Represent the Interests of Patients, Not the Pharmaceutical Industry
Members of the Council will play a crucial role in setting the prescription drug reform agenda, informing data collection and analyses, and communicating recommendations to legislative and executive leadership. This requires a high level of knowledge of the pharmaceutical industry and relevant policy, as well as a critical eye for research. Ensuring that these roles are fulfilled not only by people with experience in the health care profession but also by those who can represent the patients’ perspectives is crucial for the Council’s work.
The Governor, Senate President, and Speaker of the Assembly should carefully review candidates’ expertise and backgrounds when considering their appointments, always remembering that this Council is meant to work for New Jersey residents. The law requires that the Council’s membership be established within 180 days of the bill’s enactment, providing a deadline of January 6, 2024 for the appointments.[iii]
2. Establish a User-Friendly Website to Communicate the Council’s Work
Transparency and accountability must be prioritized in the Council’s research, data collection, and reporting on its own activities. Drug affordability boards in other states have created websites that quickly and easily guide visitors to an explanation of their work, any reports issued, and ways that the public or other interested stakeholders can reach out to discuss priorities.[iv]
New Jersey’s Drug Affordability Council and the Department of Law and Public Safety, the department that will house the Council, should follow the lead of other states by establishing an easy-to-navigate site that can keep the public informed and involved.
3. Build Relationships With Communities Early in the Process
Once the Council’s membership is confirmed, those members should quickly establish a regular schedule of meetings with community organizations to gather input on their work. An in-depth understanding of the major issues facing consumers, and a willingness to incorporate those experiences into the Council’s work, will be essential to conducting successful research and making sound recommendations.
The law requires that the Drug Affordability Council hold open meetings and accept public comments, and that the first of these meetings be held within 30 days once its membership is confirmed.[v] While the public’s involvement in these meetings is a good step for transparency, truncated comments at busy meetings will not be enough to understand the complex landscape of affordability obstacles. Members should incorporate residents’ input even more effectively through regular conversations with community partners throughout the Council’s work.
4. Consider Major Policy Recommendations With Guidance From Other States
The Council will not have to start from scratch, as several other states are many steps ahead in their boards’ and councils’ work. While New Jersey’s Council will approach drug affordability through a Garden State-specific lens, that does not mean that complicated policies explored in detail in other states should be ignored. Instead, the Council should consider major reform recommendations made by other boards, including policies with fully developed frameworks, such as upper payment limits.[vi]
By working with already-existing policies and research from other states, the New Jersey Drug Affordability Council can move quickly to recommend significant reforms and finally help Garden State residents struggling with exorbitant prescription drug prices.
[i] Office of Governor Phil Murphy, Governor Murphy Signs Legislative Package to Make Prescription Drugs More Affordable for New Jerseyans, 2023. https://www.nj.gov/governor/news/news/562023/20230710a.shtml
[ii] Kaiser Family Foundation, Explaining the Prescription Drug Provisions in the Inflation Reduction Act, 2023. https://www.kff.org/medicare/issue-brief/explaining-the-prescription-drug-provisions-in-the-inflation-reduction-act/
[iii] P.L.2023, c.106, section 10b. https://pub.njleg.state.nj.us/Bills/2022/S2000/1615_R2.PDF
[iv] Example websites: Colorado Prescription Drug Affordability Board and Advisory Council (https://doi.colorado.gov/insurance-products/health-insurance/prescription-drug-affordability-review-board), Maryland Prescription Drug Affordability Board (https://pdab.maryland.gov/), Oregon Prescription Drug Affordability Board (https://dfr.oregon.gov/pdab/pages/index.aspx).
[v] P.L.2023, c.106, section 10d-g. https://pub.njleg.state.nj.us/Bills/2022/S2000/1615_R2.PDF
[vi] Three states have empowered their prescription drug affordability boards to set upper payment limits (Maryland, Colorado, and Minnesota). While New Jersey’s Council does not have the power to set upper payment limits itself, it can research potential limits and make recommendations based on that research. Helpful resources from Maryland and Colorado with background research on this policy include: Jane Horvath, Presentation for Maryland Prescription Drug Affordability Board, State Prescription Drug Upper Payment Limits Explained, 22 March 2021. Available at: https://pdab.maryland.gov/documents/presentations/Horvath_Health_Policy_Upper_Pymt_Limits_03222021.pdf or on file with author; State of Reform, Maryland’s Prescription Drug Affordability Board to soon publish draft plan for establishing upper payment limits, 2023, https://stateofreform.com/featured/2023/05/marylands-prescription-drug-affordability-board-to-soon-publish-draft-plan-for-establishing-upper-payment-limits/; Program on Regulation, Therapeutics, and Law (PORTAL), presentation to Maryland Prescription Drug Affordability Board, Cost Reviews & Upper Payment Limits, 22 May 2023. Available at: https://pdab.maryland.gov/documents/meetings/2023/havard_med_sch_prst.pdf and on file with author; Colorado Prescription Drug Affordability Board, materials on UPL Methodology. Available at: https://drive.google.com/drive/folders/159F04Zi8bWLkRgXrP_uEfsu-uSf4nSJv and on file with author.