Prescription drug spending in New Jersey continues to rise at a pace that is outstripping national trends, placing substantial strain on public workers, their families, and the agencies and unions that negotiate on their behalf. New data and ongoing legislative debates indicate that the state’s health-care cost structure—already among the highest in the country—is being pushed further upward by the proliferation of high-cost medications, elevated utilization patterns, and structural challenges built into the State Health Benefits Program.
New Jersey’s public-sector workforce has long relied on a health plan known for its broad benefit offerings, but that generosity now comes with a steep price. In 2023, the average annual cost per public worker in the State Health Benefits Program climbed to approximately $22,000—roughly 60 percent higher than the national average across both public and private plans. Rising medical inflation is part of the story. Hospitals, physicians, and drug manufacturers have raised prices across the board, and New Jersey is feeling those increases acutely. Yet several local dynamics are adding distinct pressure to the system.
One of the most significant drivers is the rapid uptake of high-cost GLP-1 medications originally designed to treat diabetes but now widely prescribed for weight loss. Drugs such as Ozempic, Wegovy, and Zepbound have reshaped the pharmaceutical landscape nationwide, but New Jersey stands out because its state health plan is among the few that offers broad coverage for these medications. While many employers and insurers are limiting or excluding these treatments due to their extraordinary cost, New Jersey’s more expansive coverage means higher utilization—and consequently, higher total spending.
Another factor is demographic and market drift within the SHBP. As healthier employers migrate away from the state plan and into private alternatives, the remaining membership pool tends to include individuals with greater health-care needs. This adverse selection dynamic pushes overall costs upward and increases premiums for the workers and agencies that remain in the system.
These rising expenses come at a moment when the debate over prescription drug pricing and negotiation power is intensifying in Trenton. Pharmacy Benefit Managers (PBMs), the intermediaries responsible for negotiating drug prices and securing rebates, are at the center of that debate. While PBMs play a controversial role nationwide, they also serve as one of the few mechanisms capable of securing substantial savings on medications—savings that directly benefit unions, employers, and employees.
Pending legislation in the Assembly, particularly A-4953, has become a focal point of concern for many in the labor and health-policy communities. Critics argue that the bill would prohibit incentive structures that PBMs use to negotiate lower prices on behalf of large purchaser groups, including public-sector unions. Without these tools, they warn, prescription drug costs could escalate even more rapidly, potentially adding hundreds of millions of dollars in new expenses across the commercial market and public plans statewide.
Supporters of maintaining PBM negotiating leverage note that the U.S. insurance system already faces misaligned incentives, especially regarding preventative and long-term health investments. Employers may be reluctant to pay for costly medications today—such as GLP-1 weight-loss drugs that could reduce future rates of chronic diseases—because they may not be the ones to benefit from the long-term savings. Removing price-negotiation mechanisms, they argue, would amplify these pressures rather than alleviate them.
Transparency has also emerged as a legislative priority. For years, policymakers and health advocates have pressed for clearer visibility into the prescription-drug supply chain, citing opaque pricing practices that make it difficult to understand why costs spike from year to year. Recent state laws aim to introduce more rigorous tracking and oversight of drug pricing trends, but those reforms will take time to yield actionable insights.
In the meantime, public workers across New Jersey are demanding that the state protect their ability to access high-quality health care without facing unsustainable premium increases. For many residents, health insurance is tied directly to their employer or union, making every legislative proposal concerning drug pricing or benefit design a matter of direct financial impact. As policymakers evaluate the long-term implications of A-4953 and related proposals, unions and patient advocates are urging them to preserve tools that keep prescription drugs accessible and affordable.
Residents seeking broader context on how these debates intersect with wellness, coverage, and statewide public-health concerns can explore additional reporting and resources through our health and wellness section.
The stakes are high. Prescription drug affordability is no longer an abstract policy discussion—it is a daily reality for New Jersey families balancing rising premiums, chronic health needs, and the hope that the state will chart a path that safeguards both fiscal stability and access to care.
