Bill Text: NY S01768 | 2021-2022 | General Assembly | Introduced

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Bill Title: Relates to reducing pharmacy benefit manager costs; defines "pharmacy benefit manager".

Spectrum: Moderate Partisan Bill (Democrat 7-1)

Status: (Introduced - Dead) 2022-01-05 - REFERRED TO INSURANCE [S01768 Detail]

Download: New_York-2021-S01768-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          1768

                               2021-2022 Regular Sessions

                    IN SENATE

                                    January 15, 2021
                                       ___________

        Introduced by Sens. SKOUFIS, ADDABBO, HOYLMAN, MAY, RIVERA -- read twice
          and ordered printed, and when printed to be committed to the Committee
          on Insurance

        AN  ACT  to  amend  the  insurance law, in relation to reducing pharmacy
          benefit manager costs

          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 section 3114
     2  to read as follows:
     3    § 3114. Pharmacy benefit management  services.  (a)  Any  contract  or
     4  other  arrangement  entered  into  by  a  health insurer offering health
     5  insurance under article thirty-two or forty-three of  this  chapter  for
     6  the provision and administration of pharmacy benefit management services
     7  shall be based on a pass-through pricing model and include the following
     8  requirements:
     9    (1)  Payment  to  the  pharmacy  benefit  manager for pharmacy benefit
    10  management services shall be limited to  the  actual  ingredient  costs,
    11  dispensing  fees  paid  to  pharmacies,  and  an administrative fee that
    12  covers the cost of providing pharmacy benefit management services pursu-
    13  ant to a contract described  in  this  subsection.  The  department  may
    14  establish a maximum administrative fee;
    15    (2)  The  pharmacy  benefit  manager  shall  identify  all sources and
    16  amounts of income, payments, and  financial  benefits  to  the  pharmacy
    17  benefit  manager related to the provision and administration of pharmacy
    18  benefit management services on behalf of the health care  plan,  includ-
    19  ing,  but  not  limited  to, any pricing discounts, rebates of any kind,
    20  inflationary payments, credits, clawbacks,  fees,  grants,  chargebacks,
    21  reimbursements,  or  other benefits and shall ensure that any portion of
    22  such income, payments, and financial benefits is passed through  to  the
    23  health care plan in full to reduce the reportable ingredient cost;

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01685-01-1
        S. 1768                             2

     1    (3)  The  pharmacy benefit manager shall fully disclose to the depart-
     2  ment and to the health care plan the sources and amounts of all  income,
     3  payments,  and  financial  benefits referred to in paragraph two of this
     4  subsection received by the pharmacy benefit manager;
     5    (4)  The  pharmacy benefit manager shall identify all ingredient costs
     6  and dispensing fees or similar payments made  by  the  pharmacy  benefit
     7  manager  to  any  pharmacy  in  connection  with  the  contract or other
     8  arrangement;
     9    (5) The pharmacy benefit manager shall not utilize any form of  spread
    10  pricing in any contract or other arrangement with health care plans. For
    11  purposes of this subsection "spread pricing" means any amount charged or
    12  claimed  by the pharmacy benefit manager in excess of the amount paid to
    13  pharmacies on behalf of the health care plan less an administrative  fee
    14  as  described in this subsection. Any such excess amount shall be remit-
    15  ted to the health care plan on a quarterly basis;
    16    (6) Pharmacy benefit managers  shall  make  their  payment  model  for
    17  administrative fees available to the health care plan and to the depart-
    18  ment.    The  health  care plan shall, if so directed by the department,
    19  make changes to the payment model and resubmit an  amended  contract  or
    20  contracts to the department for review and approval.
    21    (b)  Any  changes  to  premiums resulting from such contracts shall be
    22  subject to the approval of the department.
    23    (c) For the purposes of  this  section,  the  term  "pharmacy  benefit
    24  manager"  means  an  entity  that  contracts with pharmacies or pharmacy
    25  contracting agents on behalf of a health plan,  state  agency,  insurer,
    26  managed care organization, or other third-party payor to provide pharma-
    27  cy health benefit services or administration.
    28    § 2. This act shall take effect immediately.