New Jersey is home to one of the most robust life sciences ecosystems in the nation. With the highest concentration of scientists and engineers per square mile in the U.S. and a global reputation for life sciences innovation, the Garden State’s life sciences industry pioneers lifechanging medical breakthroughs for patients and creates myriad economic opportunities in the State and beyond its borders. Over 5,600 life sciences establishments operate in New Jersey, and employ over 116,000 New Jerseyans, but certain policies threaten the sector and the Patients it supports. As we look ahead to 2025, BioNJ is hopeful that education and collaboration with State lawmakers will promote thoughtful policy solutions to address challenges that plague this critical industry and patients in need.
Outsized Role of PBMs on Patient Access
As Patients work with their providers to find an effective treatment regimen, they often face a complex system that can limit access to the treatments they need. Pharmacy benefit managers (PBMs) are one of the most powerful entities in the healthcare system, but their practices continue to push treatments out of reach. PBMs act as intermediaries between insurers, manufacturers, and pharmacies to negotiate discounts and coverage of medications, but often take advantage of their influence to boost profits, while increasing out-of-pocket costs for Patients and administrative burdens for physicians. While New Jersey policymakers have shown leadership with meaningful steps to rein in these profiteering tactics, including the recent introduction of the Patient and Provider Protection Act, additional measures are necessary to increase transparency into how PBMs impact the healthcare system and prohibit practices that prioritize profits over Patient health outcomes.
Impacts of the IRA & Federal Drug Price Setting Policies
While several provisions in the Inflation Reduction Act of 2022 (IRA) deserve recognition for how they will improve access to medications, including the annual cap on out-of-pocket costs for Medicare beneficiaries and the expansion of the low-income subsidy program, others stand to limit medical innovation and Patient access. One such provision in the IRA limits the period of time before a drug is eligible for negotiation for small and large molecule treatments to nine and thirteen years, respectively. With less time to recoup their investments, some manufacturers have already begun to limit investment into small molecules, which account for a majority of FDA-approved therapies and treat hundreds of chronic and rare conditions. In fact, a recent survey of venture capitalists revealed that 85% of respondents were seeing less funding of small molecule projects as a result of the IRA. While it is essential that Patients aren’t faced with affordability barriers, lawmakers at both the federal and State levels must also consider how policies impact Patient access while supporting continued development of new treatments and cures.
Addressing Copay Accumulators
Copay accumulator adjustment programs continue to impact Patient out-of-pocket costs. When copay assistance doesn’t count toward a Patient’s deductible or annual out-of-pocket limit, Patients face unexpected costs while insurers collect payment and “double dip” — once from the copay assistance and again from the Patient directly. For Patients with chronic or rare conditions, copay accumulators create insurmountable financial barriers to accessing life-saving treatments. Many states, including New Jersey, have introduced legislation to protect Patients from copay accumulator policies, but 2 out of 6 New Jersey state-regulated plans still include these programs. Lawmakers in the Garden State must protect Patients by passing legislation, such as the Ensuring Fairness in Cost-Sharing Amounts Act of 2024, to ensure that all copays count toward a Patient’s deductible.
Expanding Coverage of Biomarker Testing
State lawmakers took an important step toward improving access to care by introducing legislation to expand coverage of comprehensive biomarker testing. This testing – which analyzes tissue, blood, or another biospecimen for the presence of a biomarker – is often used to help determine the best treatment. The legislation introduced this year would require health insurers to provide coverage for biomarker testing, helping to keep pace with advances in innovation and treatments for conditions like cancer. 66% of oncology providers reported that insurance coverage is a significant or moderate barrier to appropriate biomarker testing for their Patients. Supported by a broad slate of advocacy organizations, the New Jersey biomarker expansion legislation would lead to better health outcomes, improved quality of life, and lower costs.
As the life sciences trade association for New Jersey, BioNJ looks forward to continuing to work with our lawmakers to advance policies that support both the health outcomes of their constituents and the continued growth of the Garden State’s life sciences sector. Because Patients Can’t Wait.®
