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New Jersey State Senator Vin Gopal (District 11, Monmouth) recently introduced State Senate Bill 4717 that stands to reshape the pharmacy landscape and independent pharmacies are poised to benefit. The bill, designed to prohibit pharmacy benefits managers (PBMs) from owning or operating pharmacy practice sites, marks a decisive step toward restoring fairness, transparency and true competition in the marketplace.
Summary of S4717 as Proposed:
- Ends PBM Ownership of Pharmacies: If enacted, starting July 1, 2027, PBMs will be barred from directly or indirectly holding permits to operate New Jersey pharmacies. This means the large, vertically integrated PBM-owned chains will no longer be able to dominate both the management of prescription benefits and the operation of retail pharmacies.
- Restores Patient Choice: With PBMs out of the retail space, patients will have greater access to locally-owned, community pharmacies without being steered toward PBM-affiliated outlets.
- Special Exceptions for Rare Drugs: The law allows special permits for rare, orphan, or limited distribution drugs, ensuring patients' access to critical medications while maintaining the core prohibition on PBM ownership.
- Transparency and Communication: Pharmacies affected by the new rules will be required to notify patients and providers well in advance, making the transition smooth and ensuring continuity of care.
Why This Matters for Independent Pharmacies
For years, independent pharmacies have faced mounting challenges from PBM-owned competitors who set reimbursement rates, control formularies, and often direct patients to their own stores. This conflict of interest has squeezed margins, limited consumer choice and driven many independents out of business.
This new legislation directly addresses these inequities, reflecting findings by the Federal Trade Commission and the U.S. House Oversight Committee that PBMs' anticompetitive tactics have harmed both patients and local pharmacies.
Conclusion
This recently introduced legislation is a major step forward for independent pharmacies in New Jersey. However, this proposed legislation still must go through the legislative process before pharmacies can benefit. By eliminating the unfair advantages held by PBMs, the state is restoring balance to the pharmacy market and empowering local businesses to thrive. Independent pharmacies should monitor this legislation to stay informed of the bill's progress.
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