New Jersey’s old-fashioned prescription medication management system is going the way of Blockbuster video next year as a union initiated online marketplace promises massive savings for the state and better deals for members.
On the back end, the efficiencies of the marketplace are projected through a true comparison between pharmaceutical benefit managers’ offerings. If they materialize as expected, the state will save $1.5 billion from the period starting January 1, 2018 extending through calendar year 2020.
For individual members, users can currently download the free “OneRX” app and use it to compare pricing and availability of prescriptions at pharmacies. In addition to comparing costs, the app promises to track and make available manufacturers’ discounts and coupons.
Getting the sophisticated system approved by the state for the new contract period proved no easy task for the labor representatives on the State Health Benefits Plan (SHBP) and School Employees Health Benefits Plan (SEHBP) design committees, who share oversight with the governor’s appointees. Although the governor made public calls for more concessions from public workers in health care costs, implementing a new purchasing process to actually save money did not rank as a priority.
Patrick Nowlan, of Rutgers AAUP-AFT represents AFT and co-chairs the SHBP Plan Design Committee. Nowlan said that the projected savings are a result of the unions’ efforts “to implement practical and innovative reforms within the state’s infrastructure.” He said the platform will save resources for the state and members “without diminishing benefits for our members and their families.”
Jean Pierce, of Health Professionals & Allied Employees (HPAE-AFT), who represents AFT on the SEHBP Plan Design Committee, said, “The new technology will save taxpayers, public employees and their families hundreds of millions of dollars each year.”
The two partnered with plan design committee members including union representatives from NJEA, CWA, AFSCME, public safety and firefighters unions as well as governor’s appointees and state managerial staff to work through changing the procurement process to implement the bidding marketplace.
State Senate President introduced enabling legislation to allow for implementing the competitive online auction to select a new pharmacy benefit manager and monitor its effectiveness. In a press release, Senator Sweeney’s office estimated the state’s new contract will save nearly $350 million from prescription drug costs in calendar year 2018 with larger dollar savings in 2019 and 2020.
The system is currently in use by large entities including the University of California, the California pension system, Johnson & Johnson and American Airlines. The technology involves an online “reverse auction” [in which sellers offer drugs starting at high prices, then bid each other down over time, according to a NJSpotlight report, which estimates that the state now spends nearly $2 billion annually to provide medications to almost 700,000 state, county and local workers, teachers, and retired staff.
The state Treasury Department provided the year one 17 percent savings estimate and the Asbury Park Press lauded the plan overall, even as it editorialized against public worker benefit levels—blaming them for the state’s high real estate taxes.
“Health care is a human right,” said AFT New Jersey President Donna M. Chiera. “Unions will continue to advocate for universal access, promoting innovative programs such as the direct primary care model to enhance doctor-patient relationships and pioneering efficient solutions to save money such as this prescription medicine marketplace.”
New Jersey state colleges and universities are in the SHBP and workers there are covered by these benefit changes. New Jersey school districts and local governments have the option of being in the State administered plans, so call the union or check with your local president to determine how this applies to you. Anyone, in or out of SHBP/SEHBP can benefit from downloading and utilizing the consumer pharmacy comparison, discount and coupon functions of the app.