Senate panel advances union-backed bill to expedite new PBM contract

November 03, 2016 - Politico
By Katie Jennings

Unions are taking a new legislative route to try and get Gov. Chris Christie's administration to alter the contract for the pharmacy benefits manager - the company that processes and manages prescription drugs claims - for the state health plans for public workers and teachers.

The bill (S2749), sponsored by Senate President Stephen Sweeney, directs the Division of Purchase and Property in the state treasury department to procure a pharmacy benefits manager contract "in an expedited process" that includes "reverse auction" bidding, technology that allows for competitive bidding on drug prices in real-time.

The bill passed out of the Senate Budget Committee unanimously on Thursday.

In a press release, Sweeney said the new approach could save $200 million a year, which would be split among the state, county and municipal governments and employees. In the past, Dudley Burdge of Communications Workers of America indicated the direct savings to the state would be $135 million.

"Under this plan, the state would hire a technology firm with the capacity to electronically audit all prescriptions, compare them against the prices that should be charged, and flag overcharges before the bills are paid by the state," Sweeney said in a statement. "This will help ensure that the state pays the proper reimbursement amounts for prescription drugs - and not a penny more."

In June, the State Health Benefits Program Commission approved a two-year extension of the current contract with Express Scripts, which was opposed by the commission's two union members.

At the time, Burdge, who sits on the commission, said it was "unconscionable" to extend the contract without a competitive bidding process as that means Express Scripts will have the contract for nine years.
The treasury department in November 2015 issued a request for proposal for a new pharmacy benefits manager, but the RFP was canceled in May and applicants were informed their bids were "non-responsive."

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