Sweeney Recommends NJ Pharmacy Benefits Manager Initiative to New Hampshire Legislature Looking for Cost Savings
Senate President submits testimony showing how state will save over $2.5 billion through ‘reverse auction’ technology program
Trenton – Senate President Steve Sweeney today recommended New Jersey’s Pharmacy Benefits Manager (PBM) initiative to New Hampshire legislators seeking health care cost savings, noting that New Jersey will save over $2.5 billion through its program.
Senator Sweeney, who sponsored New Jersey’s PBM legislation, provided written testimony to the New Hampshire Senate Commerce Committee that was submitted by Mark Blum, Executive Director of America’s Agenda, a non-profit healthcare coalition and advocacy group that assisted in developing New Jersey’s landmark program.
“The innovation to prescription drug purchasing we adopted features an online auction, powered by a cutting-edge, ‘big data’ analytics technology platform, to create a dynamic, truly competitive marketplace in which PBMs bid and counter-bid against one another to win the State’s business. Think of it as an ‘eBay’ for PBMs,” Senator Sweeney explained in his testimony.
Senator Sweeney noted that the New Jersey model created “a competitive marketplace in which PBMs must compete in a transparent, online auction” for the right to sell prescription drugs to the state at the lowest cost.
Furthermore, the state government was able to use the same technology platform to conduct ongoing, automated and very fast review of prescription drug claims invoices, enabling the state to flag any overcharges within a few hours of invoice submission.
The Senate President praised his Senate and Assembly colleagues, leaders of the state’s public employee unions, America’s Agenda and officials in the previous Administration who partnered with him to make the PBM program savings a reality for over 750,000 public employees and family members.
While original projections forecast PBM reverse auction savings of $1.6 billion over three years, the ultimate savings proved higher, Senator Sweeney pointed out: “In September 2018, just 9 months into the first plan year under the new pharmacy benefits contract awarded through our PBM reverse auction, Governor Phil Murphy reported that the our technology-enabled PBM selection and accountability process had reduced pharmacy costs for state and local governments by over 25 percent.”
Active school employee members will see a sizable difference in their premiums for Plan Year 2019 with rates decreasing by 1.1 percent – in stark contrast to the 13% increase they saw last year – even before introduction of the new changes.
Senator Sweeney offered to assist the New Hampshire Legislature in the future to implement the New Jersey model.202001211222