"Patient and Provider Protection Act."

A new Section 1 with 17 subsections of legislative findings is added, citing the federal Consolidated Appropriations Act of 2026 (which established a 'bona fide service fee' model for Medicare), FTC interim reports on PBM market power and specialty generic drug markups, a 2024 House Oversight Committee report, and USC Schaeffer Center research estimating that delinking PBM compensation from list prices could save approximately $95.4 billion annually.

Multiple provisions are explicitly extended to apply to contracts between PBMs and the State Health Benefits Program and the School Employees' Health Benefits Program (new subsections in Sections 3, 4, and 5). A cross-reference is also added stating that for purposes of another pending bill, 'health benefits plan' includes Medicaid, the State Health Benefits Program, and the School Employees' Health Benefits Program.

The pharmacy reimbursement and anti-steering provisions (Section 7) are broadened from applying only to 'commercial market plan' contracts to all contracts between PBMs and contracted or network pharmacies, removing the commercial-market limitation.

The definition of 'pharmacy benefits manager compensation' is replaced with 'pharmacy benefits manager fee,' now defined as a payment covering the cost of services actually performed and not exceeding their value, rather than the prior spread-pricing definition (the difference between what the carrier pays the PBM and what the PBM pays the pharmacy).

'Pharmacy benefits management services' is expanded from a brief three-item list to four detailed categories: negotiating drug prices and rebates, managing prescription drug benefits (claims processing, utilization review, prior authorization, appeals, network contracting, data management), performing administrative/clinical/pricing/financial/billing services, and any other services the department may define by rule.

The definition of 'commercial market plan' is removed entirely, which broadens the bill's applicability beyond just commercial plans to include public programs.

The formulary tiering prohibition (Section 3, subsection c) is narrowed: it now only applies when a PBM's recommendation to place a higher-cost drug in a more favorable tier is 'based solely on the cost of the prescription drug and not on another factor,' rather than the prior blanket prohibition.

The flat-fee requirement (Section 4, subsection e) is rewritten: PBMs may only derive income from PBM fees set forth in the agreement, replacing the prior language about 'flat fee arrangement' and prohibition on 'commission structure.'

New Section 4, subsection f explicitly prohibits PBM fees from being directly or indirectly based on: (1) the acquisition cost or any price metric of a drug, (2) savings, rebates, or other fees collected by the PBM, or (3) premiums, deductibles, or cost sharing charged to patients.

The pharmacy reimbursement standard is simplified: instead of requiring both (1) at least the pharmacy's cost of acquisition AND (2) the NADAC benchmark, it now requires only the NADAC-based rate (plus Medicaid dispensing fee), with an explicit carve-out for pharmacies in which the PBM or its affiliate holds an ownership interest.

New Section 7, subsection d adds an 'any willing pharmacy' provision: a PBM cannot deny a pharmacy or pharmacist network participation if they agree to the established terms and conditions.

New Section 7, subsection e prohibits PBMs from (1) requiring covered persons to use a pharmacy in which the PBM or its affiliate has an ownership interest, or (2) offering or implementing plan designs that encourage use of such affiliated pharmacies.

New Section 4, subsection i requires each PBM authorized in New Jersey to certify annually by December 31st, signed by its CEO or CFO, that it has fully and completely complied with the compensation requirements during the prior calendar year.

The fiduciary duty provision (Section 5) is expanded to require PBMs to also act in the best interests of the State Health Benefits Program and School Employees' Health Benefits Program, while adding a clarification that no private cause of action is created for individual subscribers or enrollees.