fn to a1830 3 fiscal note assembly, no. 1830 state of new jersey 215th legislature dated: march 15, 2013 summary

FN to A1830
3
FISCAL NOTE
ASSEMBLY, No. 1830
STATE OF NEW JERSEY
215th LEGISLATURE
DATED: MARCH 15, 2013
SUMMARY
Synopsis:
Requires insurance coverage in the individual and small employer
markets and SHBP and SEHBP for “off label” uses of certain drugs.
Type of Impact:
Expenditure Increase to the State General Fund, local boards of
education, local government entities.
Agencies Affected:
Division of Pensions in the Department of the Treasury, local boards
of education, and local government entities.
Executive Estimate
Fiscal Impact
FY 2014
FY 2015
FY 2016
State Cost
Immaterial
Local Cost
Immaterial
The Executive’s estimate is limited to the SHBP/SEHBP.
Office of Legislative Services
Fiscal Impact
FY 2014
FY 2015
FY 2016
State Cost
Unknown
Local Cost
Unknown
*
The Office of Legislative Services (OLS) can neither agree nor
disagree with the Executive Branch’s estimate.
*
This bill requires health benefit plans offered in the individual
and small employer markets in New Jersey that provide benefits for
drugs approved by the federal Food and Drug Administration (FDA),
as well as the State Health Benefits Program (SHBP) and the School
Employees’ Health Benefits Program (SEHBP), to provide coverage
for certain “off label” uses of those drugs for which they provide
benefits.
*
The Division of Pensions and Benefits in the Department of the
Treasury estimates that the enactment of this bill, with regard to
the SHBP/SEHBP, will have an immaterial financial impact on public
employer costs associated with the State-administered Employee
Prescription Drug Plan because the plan already manages coverage
for “off-label” prescription drugs via the appeal process.
*
The OLS notes that no data was provided with regard to the actual
demand for and potential utilization of “off-label” prescription
drugs outside of the purview of the appeals process. To the extent
that the demand for and utilization of “off-label” prescription
drugs would be greater than the utilization of “off-label” drugs
through the appeals process, the cost of this bill could have an
unknown, but more than an immaterial effect on the SHBP/SEHBP.
*
The OLS is not able to ascertain the fiscal impact with regard to
local government entities and boards of education that do not
participate in the SHBP/SEHBP in this State due to a lack of
information.
BILL DESCRIPTION
Assembly Bill No. 1830 of 2012 requires those health benefits plans
offered in the individual and small employer markets in New Jersey
that provide benefits for drugs that are approved by the federal FDA,
as well as the SHBP and SEHBP, to provide coverage for certain
“off-label” uses of those drugs for which they provide benefits.
Off-label use of a drug (that is, its use for a specific treatment for
which the drug has not been approved by FDA) is legal when prescribed
in a medically appropriate way.
The bill requires health insurance carriers that participate in the
Individual Health Coverage Program and the Small Employer Health
Benefits Program (as well as carriers offering other health benefits
plans), and SHBP and SEHBP, to provide coverage for the off-label use
of a drug if the drug is:
-- recognized as being medically appropriate for the specific
treatment for which it has been prescribed in one of the two
established reference compendia (the American Hospital Formulary
Service Drug Information or the United States Pharmacopeia Drug
Information); or
-- recommended by a clinical study or review article in a major
peer-reviewed professional journal.
The purpose of this bill is to extend the medical benefits that may
derive from the use of off-label drugs to persons who may not now be
able to access these medications, in particular those individuals who
are suffering from a terminal or chronically debilitating illness.
The bill takes effect on the first day of the fourth month next
following the date of enactment.
FISCAL ANALYSIS
EXECUTIVE BRANCH
The Division of Pensions and Benefits in the Department of the
Treasury estimates that the enactment of this bill, with regard to the
SHBP/SEHBP, will have an immaterial financial impact on public
employer costs associated with the State-administered Employee
Prescription Drug Plan because the plan already manages coverage for
“off-label” prescription drugs via the appeal process.
OFFICE OF LEGISLATIVE SERVICES
The OLS can neither agree nor disagree with the Executive Branch’s
estimate. According to the Division of Pensions and Benefits, the plan
manages coverage for “off-label” prescription drugs through the appeal
process indicating that coverage for “off label” prescription drugs is
not provided unless appealed and then approved. No data was provided
with regard to the demand for and potential utilization of “off-label”
prescription drugs, that is, the total number of prescriptions that
would have been written if the SHBP/SEHBP already provided coverage
for “off-label” drugs and no data was provided with regard to the
total number of prescriptions actually appealed and the number of
prescriptions appealed and then approved. To the extent that the
demand for and utilization of “off-label” prescription drugs is
greater than the utilization of “off-label” drugs through the appeals
process, the cost of this bill could have an unknown, but more than an
immaterial effect on the SHBP/SEHBP.
Section:
State Government
Analyst:
Kimberly McCord Clemmensen
Senior Fiscal Analyst
Approved:
David J. Rosen
Legislative Budget and Finance Officer
This fiscal note has been prepared pursuant to P.L.1980, c.67
(C.52:13B-6 et seq.).

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