New Jersey Citizen Action Calls for Upper Payment Limits to Rein in Soaring Prescription Drug Costs
NEWARK: New Jersey Citizen Action (NJCA) Healthcare Program Director, Laura Waddell, today called on state leaders to implement Upper Payment Limits (UPLs) to control unaffordable prescription drug prices in the state.
Responding to the Office of Health Care Affordability and Transparency (OHCAT) report, “Health Care Spending Trends for New Jersey Residents with Commercial Insurance, 2017–2022”, she said that research clearly shows prescription drug costs are spiraling out of control for state residents.
“Other states aren’t just studying this problem. Colorado and Maryland have implemented Upper Payment Limits (UPLs) on high-cost prescription drugs, with projected savings of tens of millions of dollars. Colorado expects to save $32 million on a single drug, and Maryland projects up to $12 million in combined Rx savings.”
“We are fortunate to have an entity like the Prescription Drug Affordability Council (PDAC) that can take this data and turn it into a policy recommendation. We urge PDAC and state policymakers to consider serious approaches, including setting Upper Payment Limits in New Jersey to rein in excessive drug prices.”
The report shows that prescription drug spending in New Jersey is growing faster than nearly every other category of health care costs. Between 2017 and 2022, per-person prescription drug spending in New Jersey increased by 50 percent, with an average annual growth rate of 8.4 percent. By 2022, New Jersey residents were spending $515 per person on prescription drugs, 21 percent higher than the national average of $427.
The report also directs that average price for prescription drug encounters increased by 26 percent between 2017 and 2022, with prices rising every year except between 2020 and 2021. At the same time, utilization increased by 18 percent, meaning patients are paying more and needing more medications.
The findings are reinforced by a companion report, “Health Care Cost Growth Benchmark Report: Performance Year 1 (2022-2023)” released at the same time, which indicates all the health care cost growth benchmarks set were missed in all tracked indicators. This report also highlights that continued growth in hospital costs is making hospital care unaffordable for New Jerseyans.
“These findings confirm what NJ patients already know and have been experiencing: that overall healthcare, and in particular, prescription drugs are unaffordable, and the problem is getting worse every year,” Waddell said. “New Jersey – and by extension the Sherrill administration - must use every tool available to bring prices down, and that work must start now.”
“The report identified the top 10 costliest prescription drugs in New Jersey during the study period. We want to see how the PDAC will use this information to create actionable recommendations to make medications more affordable in our state and deliver real savings to patients. Setting Upper Payment Limits addresses skyrocketing costs directly.”
“We also hope the Office of Health Care Affordability & Transparency will be fully codified with the establishment of an All-Payer Claims Database under Sherrill’s administration and position these mechanisms along with the PDAC as a strong foundation for policy innovation that delivers real relief to New Jersey families. Patients can’t afford to wait.”
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New Jersey Citizen Action is a statewide coalition and grassroots organization that fights for social, racial, and economic justice for all.
