Establishes three-year Medicaid demonstration project to pay for certain drugs according to value-based system.

This bill creates a three-year pilot program in New Jersey's Medicaid system to test a value-based payment approach for certain high-cost prescription drugs. Under the program, the state would negotiate with drug manufacturers to tie reimbursement amounts to observed patient outcomes rather than just the price of the medication. The initiative would focus on at least three expensive drugs with measurable health results and would require Medicaid managed care organizations to participate. At the end of the three-year period, the state would report findings to the Governor and Legislature to determine whether to expand or modify the program.