Bill Text: NJ S4205 | 2026-2027 | Regular Session | Introduced
Bill Title: Requires pharmacy benefits manager compensation to be based on bona fide service fee.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-05-11 - Introduced in the Senate, Referred to Senate Commerce Committee [S4205 Detail]
Download: New_Jersey-2026-S4205-Introduced.html
Sponsored by:
Senator RAJ MUKHERJI
District 32 (Hudson)
SYNOPSIS
Requires pharmacy benefits manager compensation to be based on bona fide service fee.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning pharmacy benefits manager compensation and amending P.L.2023, c.107.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 9 of P.L.2023, c.107 (C.17B:27F-3.4) is amended to read as follows:
9. a. If a carrier uses a pharmacy benefits manager to administer or manage the prescription drug benefits of covered persons, any pharmacy benefits manager compensation, for purposes of calculating a carrier's anticipated loss ratio or any loss ratio calculated as part of any applicable medical loss ratio filing or rate filing, shall:
(1) constitute an administrative cost incurred by the carrier in connection with a health benefits plan; and
(2) not constitute a benefit provided under a health benefits plan. A carrier shall claim only the amounts paid by the pharmacy benefits manager to a pharmacy or pharmacist as an incurred claim.
b. Any rate filing submitted by a carrier with respect to a health benefits plan that provides coverage for prescription drugs or pharmacy services and that is administered or managed by a pharmacy benefits manager shall include:
(1) a memorandum prepared by a qualified actuary describing the calculation of the pharmacy benefits manager compensation; and
(2) any records and supporting information as the department reasonably determines is necessary to confirm the calculation of the pharmacy benefits manager compensation.
c. Upon request, a carrier shall provide any records to the department that relate to the calculation of the pharmacy benefits manager and pharmacy services administrative organization compensation.
d. A pharmacy benefits manager and pharmacy services administrative organization shall provide any necessary documentation requested by a carrier that relates to pharmacy benefits manager compensation in order to comply with the requirements of this section.
e. (1) Compensation to a pharmacy benefits manager or affiliate of a pharmacy benefits manager for the administration and management of prescription drug benefits shall not be in any form of a commission structure or fee other than a bona fide service fee.
(2) As used in this subsection, "bona fide service fee" means a fee that is reflective of the fair market value, as determined by the Commissioner of Banking and Insurance, for a bona fide, itemized service actually performed on behalf of a purchaser, that the purchaser would otherwise perform or contract for in the absence of a pharmacy benefits management services contract and that is not passed on in whole or in part to a covered person. The fee shall be in a flat dollar amount and shall not be directly or indirectly based on, or contingent upon:
(a) a drug price, such as wholesale acquisition cost, or a drug benchmark price, such as average wholesale price;
(b) the amount of discounts, rebates, fees, or other direct or indirect remuneration with respect to a drug dispensed to a covered person;
(c) formulary placement decisions or the volume or value of any referrals or business generated between the pharmacy benefits manager and purchaser; or
(d) any other amounts or methodologies prohibited by the department.
(cf: P.L.2023, c.107, s.9)
2. This act shall take effect on the first day of the fourth month next following the date of enactment and shall apply to contracts and agreements entered into, renewed, modified, or amended on or after the effective date, but the Commissioner of Banking and Insurance may take such anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.
STATEMENT
This bill establishes pharmacy benefits manager compensation based on a bona fide service fee.
Under the bill, compensation to a pharmacy benefits manager or affiliate of a pharmacy benefits manager for the administration and management of prescription drug benefits may not be in any form of a commission structure or fee other than a bona fide service fee. For purposes of this bill, "bona fide service fee" means a fee that is reflective of the fair market value, as determined by the Commissioner of Banking and Insurance, for a bona fide, itemized service actually performed on behalf of a purchaser, that the purchaser would otherwise perform or contract for in the absence of a pharmacy benefits management services contract and that is not passed on in whole or in part to a covered person. The fee is required to be a flat dollar amount and may not be directly or indirectly based on, or contingent upon:
(1) a drug price, such as wholesale acquisition cost, or a drug benchmark price, such as average wholesale price;
(2) the amount of discounts, rebates, fees, or other direct or indirect remuneration with respect to a drug dispensed to a covered person;
(3) formulary placement decisions or the volume or value of any referrals or business generated between the pharmacy benefits manager and purchaser; or
(4) any other amounts or methodologies prohibited by the department.
