New Jersey Citizen Action (NJCA) is urging state officials to adopt Upper Payment Limits (UPLs) as a way to address the increasing costs of prescription drugs. Laura Waddell, NJCA Healthcare Program Director, referenced findings from the Office of Health Care Affordability and Transparency’s report, “Health Care Spending Trends for New Jersey Residents with Commercial Insurance, 2017–2022,” which highlighted significant increases in drug prices for residents.
According to Waddell, other states have already implemented UPLs on high-cost medications and have projected substantial savings. “Other states aren’t just studying this problem. Colorado and Maryland have implemented Upper Payment Limits (UPLs) on high-cost prescription drugs, with projected savings of tens of millions of dollars. Colorado expects to save $32 million on a single drug, and Maryland projects up to $12 million in combined Rx savings.”
She emphasized the role of New Jersey’s Prescription Drug Affordability Council (PDAC) in addressing these issues: “We are fortunate to have an entity like the Prescription Drug Affordability Council (PDAC) that can take this data and turn it into a policy recommendation. We urge PDAC and state policymakers to consider serious approaches, including setting Upper Payment Limits in New Jersey to rein in excessive drug prices.”
The OHCAT report shows that spending on prescription drugs in New Jersey rose by 50 percent per person between 2017 and 2022, averaging an annual growth rate of 8.4 percent. By 2022, the average amount spent per resident was $515—21 percent higher than the national average.
Additionally, the average price for each prescription drug encounter increased by 26 percent during this period. Utilization also went up by 18 percent, meaning both prices and demand for medications are rising.
A companion report released at the same time showed that none of the health care cost growth benchmarks were met across tracked indicators and that hospital costs continue to climb, making care less affordable for many families.
“These findings confirm what NJ patients already know and have been experiencing: that overall healthcare, and in particular, prescription drugs are unaffordable, and the problem is getting worse every year,” Waddell said. “New Jersey – and by extension the Sherrill administration – must use every tool available to bring prices down, and that work must start now.”
She added: “The report identified the top 10 costliest prescription drugs in New Jersey during the study period. We want to see how the PDAC will use this information to create actionable recommendations to make medications more affordable in our state and deliver real savings to patients. Setting Upper Payment Limits addresses skyrocketing costs directly.”
Waddell also called for further action under Governor Sherrill’s administration: “We also hope the Office of Health Care Affordability & Transparency will be fully codified with the establishment of an All-Payer Claims Database under Sherrill’s administration and position these mechanisms along with the PDAC as a strong foundation for policy innovation that delivers real relief to New Jersey families. Patients can’t afford to wait.”
