Bill Text: NY A02970 | 2019-2020 | General Assembly | Introduced

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Bill Title: Implements the pharmacy benefit manager transparency act requiring disclosure and publishing of reports relating to pharmacy benefit managers.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-01-08 - referred to insurance [A02970 Detail]

Download: New_York-2019-A02970-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                          2970
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    January 28, 2019
                                       ___________
        Introduced  by M. of A. ORTIZ -- read once and referred to the Committee
          on Insurance
        AN ACT to amend the insurance law, in relation to implementing the phar-
          macy benefit manager transparency act
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  The insurance law is amended by adding a new article 6 to
     2  read as follows:
     3                                  ARTICLE 6
     4                  PHARMACY BENEFIT MANAGER TRANSPARENCY ACT
     5  Section 601. Short title.
     6          602. Definitions.
     7          603. Responsibility to covered entities.
     8          604. Pharmacy benefit manager transparency.
     9          605. Report publication.
    10          606. Compliance and enforcement.
    11          607. Rulemaking authority.
    12    § 601. Short title. This article shall be known and may  be  cited  as
    13  the "pharmacy benefit manager transparency act".
    14    §  602.  Definitions.  For the purposes of this article, the following
    15  definitions shall apply:
    16    (1) "Covered entity" means a nonprofit  hospital  or  medical  service
    17  organization,  insurer,  health  coverage  plan,  or  health maintenance
    18  organization licensed in the state; a health program administered by the
    19  superintendent or the state in the capacity of provider of health cover-
    20  age; or an employer, labor union, or other group of persons organized in
    21  the state that provides health coverage to covered individuals  who  are
    22  employed or reside in the state.
    23    (2)  "Covered  individual"  means  a  member,  participant,  enrollee,
    24  contract holder, or policy holder or beneficiary of a covered entity who
    25  is provided health coverage by  the  covered  entity.  This  includes  a
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05277-01-9
        A. 2970                             2
     1  dependent  or  other  person  provided health coverage through a policy,
     2  contract, or plan for a covered individual.
     3    (3)  "Pharmacy benefit manager" means an entity that contracts with or
     4  is employed by a health benefit plan,  state  agency,  insurer,  managed
     5  care  organization, or other third-party payor for the administration or
     6  management of prescription drug benefits provided by  a  covered  entity
     7  for the benefit of covered individuals.
     8    (4)   "Wholesale   acquisition  cost"  means  the  list  price  for  a
     9  prescription drug, excluding any discounts, rebates,  or  reductions  in
    10  price,  as  reported  in the most recent editions of the wholesale price
    11  guides or  other  publications  of  drug  pricing  data  a  manufacturer
    12  provides  to wholesalers or distributors in the United States, as speci-
    13  fied in 42 U.S.C. 23 § 1395w-3a(c)(6)(B).
    14    § 603. Responsibility to covered  entities.  (1)  A  pharmacy  benefit
    15  manager shall exercise good faith and fair dealing in the performance of
    16  its  contractual  obligations to a covered entity, and shall perform its
    17  duties with care, skill, prudence, diligence, and professionalism.
    18    (2) A pharmacy benefit manager shall notify a covered entity in  writ-
    19  ing  of  any  activity,  policy, practice, ownership interest, or affil-
    20  iation of the pharmacy benefit  manager  that  presents  a  conflict  of
    21  interest that interferes with the requirements imposed by this article.
    22    §  604. Pharmacy benefit manager transparency. (1) Each pharmacy bene-
    23  fit manager under contract with a covered entity  shall  submit  to  the
    24  covered entity and to the superintendent no later than February first of
    25  each year the following information for the immediately preceding calen-
    26  dar year relative to such contract:
    27    (a)  The wholesale acquisition cost for each drug on its formulary and
    28  the total number of prescriptions that were dispensed.
    29    (b) The amount of rebates, discounts, and price concessions  that  the
    30  pharmacy  benefit  manager  received for each drug on its formulary. The
    31  amount of rebates shall include any utilization discounts  the  pharmacy
    32  benefit manager receives from a manufacturer.
    33    (c)  The amount of rebates, discounts, and price concessions described
    34  in paragraph (b) of this  subsection  that  were  passed  through  to  a
    35  covered  entity, and the amount that were retained by the pharmacy bene-
    36  fit manager, for each drug on its formulary.
    37    (d) The amount of any fee, administrative or otherwise, received  from
    38  a manufacturer.
    39    (e)  The nature, type, and amount of all other payments that the phar-
    40  macy benefit manager receives, directly or indirectly, from  a  manufac-
    41  turer  in  connection with a drug switch program, a formulary management
    42  program, a  mail  service  pharmacy,  educational  support,  data  sales
    43  related to a covered individual, or any other function.
    44    (f) The amount of any reimbursements the pharmacy benefit manager pays
    45  to contracting pharmacies, and the negotiated price covered entities pay
    46  the pharmacy benefit manager, for each drug on its formulary.
    47    (g) Any other information as deemed necessary by the superintendent.
    48    (2)  The  information  disclosed  pursuant  to  subsection one of this
    49  section shall include all retail, mail order, specialty, and  compounded
    50  prescription products.
    51    (3) Information submitted under this section shall be confidential and
    52  shall  not  be  disclosed  to  any  person  by the superintendent or the
    53  covered entity receiving the information. Such information shall not  be
    54  deemed a public record of the superintendent.
    55    §  605. Report publication. (1) In order to allow patients and employ-
    56  ers to compare the ability of pharmacy  benefit  managers  to  negotiate
        A. 2970                             3
     1  rebates,  discounts,  and  price  concessions  and  the  amount  of such
     2  rebates, discounts, and price concessions that  are  passed  through  to
     3  plan  sponsors,  and to allow covered entities to evaluate the nature of
     4  the relationship between pharmacy benefit managers and manufacturers and
     5  the  effectiveness  of  pharmacy  benefit managers in reducing costs for
     6  covered entities and their beneficiaries, no later than  February  first
     7  of each year, the superintendent shall issue a report to be published on
     8  the superintendent's website aggregating the information received by all
     9  pharmacy benefit managers under this section for the preceding year.
    10    (2)  The superintendent shall ensure that the information described in
    11  subsection one of this section is reported in a manner that prevents the
    12  disclosure of the identity of a specific  pharmacy  benefit  manager,  a
    13  covered  entity, prices charged for prescription drugs or any associated
    14  rebates, discounts or price concessions with respect  to  an  individual
    15  drug or an individual plan, or any information that identifies a product
    16  or manufacturer.
    17    (3)  On or before February first of each year the superintendent shall
    18  analyze the information submitted by pharmacy benefit managers  pursuant
    19  to  this article and produce an additional report to be published on the
    20  superintendent's website on the impact of pharmacy benefit  managers  on
    21  the cost, administration, and availability of prescription drugs.
    22    (4) The superintendent shall submit the report and any recommendations
    23  for  proposed legislation or further action by the state pursuant to the
    24  report's findings to the temporary president of the senate, the  speaker
    25  of  the  assembly  and  the governor on or before February first of each
    26  year.
    27    § 606. Compliance and enforcement.  (1)  All  contracts  for  pharmacy
    28  benefit  management entered into in this state or by a covered entity in
    29  this state shall comply with the requirements of this article.
    30    (2) The superintendent is responsible  for  the  enforcement  of  this
    31  article  and may reasonably examine and investigate to ensure compliance
    32  with the provisions herein.
    33    (3)  The  superintendent  shall  adopt  procedures  for  investigating
    34  complaints  of  noncompliance  with  this article. If the superintendent
    35  finds a pharmacy benefit manager has failed to comply with  any  of  the
    36  provisions  of  this  article,  the superintendent may, after notice and
    37  opportunity for a hearing, impose one or more sanctions as deemed appro-
    38  priate or necessary to bring non-complying entities  into  full  compli-
    39  ance, including, but not limited to:
    40    (a)  revoking  or  suspending  a  license issued to a pharmacy benefit
    41  manager, or denying an application for a renewal of a license;
    42    (b) imposing a period of probation best adapted to protect the  public
    43  health and safety and for any rehabilitation;
    44    (c)  imposing  an  administrative fine not to exceed two hundred fifty
    45  dollars for each violation or instance of noncompliance;
    46    (d) assessing costs to be paid by the pharmacy benefit manager; or
    47    (e) imposing restrictions on the scope of operation  of  the  pharmacy
    48  benefit manager in the state.
    49    (4)  In  addition  to  sanctions  for  noncompliance  as  described in
    50  subsection three of this section, if a pharmacy benefit manager fails to
    51  submit to the superintendent the information required under section  six
    52  hundred  four  of this article by the specified date, the superintendent
    53  may impose against the pharmacy benefit manager an administrative penal-
    54  ty of not more than two hundred fifty dollars for each day of such fail-
    55  ure.
        A. 2970                             4
     1    (5) Any money collected, as  administrative  penalties  or  otherwise,
     2  pursuant to this section must be used by the superintendent to cover the
     3  costs of implementation and enforcement of this article.
     4    §  607.  Rulemaking authority. The superintendent shall promulgate and
     5  adopt rules and regulations to effectuate the purposes and provisions of
     6  this article. The rules and regulations shall be subject  to  review  in
     7  accordance with general rules of administrative rulemaking and review of
     8  regulations in this state.
     9    § 2. This act shall take effect immediately.