Bill Text: NY S06274 | 2019-2020 | General Assembly | Introduced
Bill Title: Establishes registration and licensing requirements for pharmacy benefit managers including reporting requirements, penalties for violations, revocation of licenses and registrations, prohibited practices and duty, accountability and transparency.
Spectrum: Moderate Partisan Bill (Democrat 5-1)
Status: (Introduced - Dead) 2020-01-08 - REFERRED TO INSURANCE [S06274 Detail]
Download: New_York-2019-S06274-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 6274 2019-2020 Regular Sessions IN SENATE May 31, 2019 ___________ Introduced by Sen. BRESLIN -- 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 registration and licensing of pharmacy benefit managers; and to amend the public health law, in relation to the substitution of prescriptions by pharmacy benefit managers 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 29 to 2 read as follows: 3 ARTICLE 29 4 PHARMACY BENEFIT MANAGERS 5 Section 2901. Definitions. 6 2902. Acting without a registration. 7 2903. Registration requirements for pharmacy benefit managers. 8 2904. Reporting requirements for pharmacy benefit managers. 9 2905. Acting without a license. 10 2906. Licensing of a pharmacy benefit manager. 11 2907. Revocation or suspension of a registration or license of a 12 pharmacy benefit manager. 13 2908. Penalties for violations. 14 2909. Stay or suspension of superintendent's determination. 15 2910. Revoked registrations or licenses. 16 2911. Change of address. 17 2912. Applicability of other laws. 18 2913. Assessments. 19 2914. Duty, accountability and transparency. 20 2915. Contract provisions. 21 § 2901. Definitions. For purposes of this article: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD13127-01-9S. 6274 2 1 (a) "Controlling person" is any person or other entity who or which 2 directly or indirectly has the power to direct or cause to be directed 3 the management, control or activities of a pharmacy benefit manager. 4 (b) "Health insurer" means an insurance company authorized in this 5 state to write accident and health insurance, a company organized pursu- 6 ant to article forty-three of this chapter, a municipal cooperative 7 health benefit plan established pursuant to article forty-seven of this 8 chapter, an organization certified pursuant to article forty-four of the 9 public health law, an institution of higher education certified pursuant 10 to section one thousand one hundred twenty-four of this chapter, or the 11 New York state health insurance plan established under article eleven of 12 the civil service law. 13 (c) "Pharmacy benefit management services" means directly or through 14 an intermediary, managing the prescription drug coverage provided by a 15 health insurer under a contract or policy delivered or issued for deliv- 16 ery in this state or a plan subject to section three hundred 17 sixty-four-j of the social services law, including the processing and 18 payment of claims for prescription drugs, the performance of drug utili- 19 zation review, the processing of drug prior authorization requests, the 20 adjudication of appeals or grievances related to prescription drug 21 coverage, contracting with network pharmacies, negotiation of rebates, 22 and controlling the cost of covered prescription drugs. 23 (d) "Pharmacy benefit manager" means a person, firm, association, 24 corporation or other entity that, pursuant to a contract with a health 25 insurer provides pharmacy benefit management services, except that term 26 shall not include: 27 (1) an officer or employee of a registered or licensed pharmacy bene- 28 fit manager; or 29 (2) a health insurer, or any manager thereof, individual or corporate, 30 or any officer, director or regular salaried employee thereof, providing 31 pharmacy benefit management services under a policy or contract issued 32 by the health insurer. 33 § 2902. Acting without a registration. (a) No person, firm, associ- 34 ation, corporation or other entity may act as a pharmacy benefit manager 35 prior to January first, two thousand twenty without having a valid 36 registration as a pharmacy benefit manager filed with the superintendent 37 in accordance with this article and any regulations promulgated there- 38 under. 39 (b) Prior to January first, two thousand twenty, no health insurer may 40 pay any fee or other compensation to any person, firm, association, 41 corporation or other entity for performing pharmacy benefit management 42 services unless the person, firm, association, corporation or other 43 entity is registered as a pharmacy benefit manager in accordance with 44 this article. 45 (c) Any person, firm, association, corporation or other entity that 46 violates this section shall, in addition to any other penalty provided 47 by law, be liable for restitution to any insurer or insured harmed by 48 the violation and shall also be subject to a penalty of the greater of 49 (1) two thousand dollars for the first violation and five thousand 50 dollars for each subsequent violation or (2) the aggregate economic 51 gross receipts attributable to all violations. 52 § 2903. Registration requirements for pharmacy benefit managers. (a) 53 Every pharmacy benefit manager that performs pharmacy benefit management 54 services prior to January first, two thousand twenty-one shall register 55 with the superintendent in a manner acceptable to the superintendent, 56 and shall pay a fee of two thousand dollars for each year or fraction ofS. 6274 3 1 a year in which the registration shall be valid. The superintendent, in 2 consultation with the commissioner of health, may establish, by regu- 3 lation, minimum registration standards required for a pharmacy benefit 4 manager. The superintendent can reject a registration application filed 5 by a pharmacy benefit manager that fails to comply with the minimum 6 registration standards. 7 (b) For each business entity, the officer or officers and director or 8 directors named in the application shall be designated responsible for 9 the business entity's compliance with the financial services and insur- 10 ance laws, rules and regulations of this state. 11 (c) Every registration will expire on December thirty-first, two thou- 12 sand twenty regardless of when registration was first made. 13 (d) Every pharmacy benefit manager that performs pharmacy benefit 14 management services at any time between January first, two thousand 15 nineteen and June first, two thousand nineteen, shall make the registra- 16 tion and fee payment required by subsection (a) of this section on or 17 before September first, two thousand nineteen. Any other pharmacy bene- 18 fit manager shall make the registration and fee payment required by 19 subsection (a) of this section prior to performing pharmacy benefit 20 management services. 21 (e) Registrants under this section shall be subject to examination by 22 the superintendent as often as the superintendent may deem it necessary. 23 The superintendent may promulgate regulations establishing methods and 24 procedures for facilitating and verifying compliance with the require- 25 ments of this article and such other regulations as necessary to enforce 26 the provisions of this article. 27 § 2904. Reporting requirements for pharmacy benefit managers. (a)(1) 28 On or before July first of each year, beginning in two thousand twenty, 29 every pharmacy benefit manager shall report to the superintendent, in a 30 statement subscribed and affirmed as true under penalties of perjury, 31 the information requested by the superintendent including, without limi- 32 tation, disclosure of any financial incentive or benefit for promoting 33 the use of certain drugs and other financial arrangements affecting 34 health insurers or their policyholders or insureds and any information 35 relating to the business, financial condition, or market conduct of the 36 pharmacy benefit manager. The superintendent also may require the filing 37 of quarterly or other statements, which shall be in such form and shall 38 contain such matters as the superintendent shall prescribe. 39 (2) The superintendent also may address to any pharmacy benefit manag- 40 er or its officers any inquiry in relation to its provision of pharmacy 41 benefit management services or any matter connected therewith. Every 42 pharmacy benefit manager or person so addressed shall reply in writing 43 to such inquiry promptly and truthfully, and such reply shall be, if 44 required by the superintendent, subscribed by such individual, or by 45 such officer or officers of the pharmacy benefit manager, as the super- 46 intendent shall designate, and affirmed by them as true under the penal- 47 ties of perjury. 48 (b) In the event any pharmacy benefit manager or person does not 49 submit the report required by paragraph one of subsection (a) of this 50 section or does not provide a good faith response to an inquiry from the 51 superintendent pursuant to paragraph two of subsection (a) of this 52 section within a time period specified by the superintendent of not less 53 than fifteen business days, the superintendent is authorized to levy a 54 civil penalty, after notice and hearing, against such pharmacy benefit 55 manager or person not to exceed one thousand dollars per day for eachS. 6274 4 1 day beyond the date the report is due or the date specified by the 2 superintendent for response to the inquiry. 3 (c) All information disclosed by a pharmacy benefit manager shall be 4 deemed confidential and not subject to disclosure unless the superinten- 5 dent determines that such disclosure is in the public interest, or is 6 necessary to carry out this article or to allow the department to 7 perform examinations or investigations authorized by law. 8 § 2905. Acting without a license. (a) No person, firm, association, 9 corporation or other entity may act as a pharmacy benefit manager on or 10 after January first, two thousand twenty-one without having authority to 11 do so by virtue of a license issued in force pursuant to the provisions 12 of this article. 13 (b) No health insurer may pay any fee or other compensation to any 14 person, firm, association, corporation or other entity for performing 15 pharmacy benefit management services on or after January first, two 16 thousand twenty-one unless the person, firm, association, corporation or 17 other entity is licensed as a pharmacy benefit manager in accordance 18 with this article. 19 (c) Any person, firm, association, corporation or other entity that 20 violates this section shall, in addition to any other penalty provided 21 by law, be subject to a penalty of the greater of (1) two thousand 22 dollars for the first violation and five thousand dollars for each 23 subsequent violation or (2) the aggregate gross receipts attributable to 24 all violations. 25 § 2906. Licensing of a pharmacy benefit manager. (a) The superinten- 26 dent may issue a pharmacy benefit manager's license to any person, firm, 27 association or corporation who or that has complied with the require- 28 ments of this article, including regulations promulgated by the super- 29 intendent. The superintendent, in consultation with the commissioner of 30 health, may establish, by regulation, minimum standards for the issuance 31 of a license to a pharmacy benefit manager. 32 (b) The minimum standards established under this subsection may 33 address, without limitation: 34 (1) conflicts of interest between pharmacy benefit managers and health 35 insurers; 36 (2) deceptive practices in connection with the performance of pharmacy 37 benefit management services; 38 (3) anti-competitive practices in connection with the performance of 39 pharmacy benefit management services; 40 (4) unfair claims practices in connection with the performance of 41 pharmacy benefit management services; and 42 (5) protection of consumers. 43 (c)(1) Any such license issued to a firm or association shall author- 44 ize all of the members of the firm or association and any designated 45 employees to act as pharmacy benefit managers under the license, and all 46 such persons shall be named in the application and supplements thereto. 47 (2) Any such license issued to a corporation shall authorize all of 48 the officers and any designated employees and directors thereof to act 49 as pharmacy benefit managers on behalf of such corporation, and all such 50 persons shall be named in the application and supplements thereto. 51 (3) For each business entity, the officer or officers and director or 52 directors named in the application shall be designated responsible for 53 the business entity's compliance with the insurance laws, rules and 54 regulations of this state. 55 (d)(1) Before a pharmacy benefit manager's license shall be issued or 56 renewed, the prospective licensee shall properly file in the office ofS. 6274 5 1 the superintendent a written application therefor in such form or forms 2 and supplements thereto as the superintendent prescribes, and pay a fee 3 of two thousand dollars for each year or fraction of a year in which a 4 license shall be valid. 5 (2) Every pharmacy benefit manager's license issued to a business 6 entity pursuant to this section shall expire on the thirtieth day of 7 November of even-numbered years. Every license issued pursuant to this 8 section to an individual pharmacy benefit manager who was born in an 9 odd-numbered year, shall expire on the individual's birthday in each 10 odd-numbered year. Every license issued pursuant to this section to an 11 individual pharmacy benefit manager who was born in an even-numbered 12 year, shall expire on the individual's birthday in each even-numbered 13 year. Every license issued pursuant to this section may be renewed for 14 the ensuing period of twenty-four months upon the filing of an applica- 15 tion in conformity with this subsection. 16 (e)(1) If an application for a renewal license shall have been filed 17 with the superintendent before October first of the year of expiration, 18 then the license sought to be renewed shall continue in full force and 19 effect either until the issuance by the superintendent of the renewal 20 license applied for or until five days after the superintendent shall 21 have refused to issue such renewal license and given notice of such 22 refusal to the applicant. 23 (2) Before refusing to renew any license pursuant to this section for 24 which a renewal application has been filed pursuant to paragraph one of 25 this subsection, the superintendent shall notify the applicant of the 26 superintendent's intention to do so and shall give such applicant a 27 hearing. 28 (f) The superintendent may refuse to issue a pharmacy benefit manag- 29 er's license if, in the superintendent's judgment, the applicant or any 30 member, principal, officer or director of the applicant, is not trust- 31 worthy and competent to act as or in connection with a pharmacy benefit 32 manager, or that any of the foregoing has given cause for revocation or 33 suspension of such license, or has failed to comply with any prerequi- 34 site for the issuance of such license. 35 (g) Licensees and applicants for a license under this section shall be 36 subject to examination by the superintendent as often as the superinten- 37 dent may deem it expedient. The superintendent may promulgate regu- 38 lations establishing methods and procedures for facilitating and verify- 39 ing compliance with the requirements of this section and such other 40 regulations as necessary. 41 (h) The superintendent may issue a replacement for a currently 42 in-force license that has been lost or destroyed. Before the replacement 43 license shall be issued, there shall be on file in the office of the 44 superintendent a written application for the replacement license, 45 affirming under penalty of perjury that the original license has been 46 lost or destroyed, together with a fee of two hundred dollars. 47 § 2907. Revocation or suspension of a registration or license of a 48 pharmacy benefit manager. (a) The superintendent may refuse to renew, 49 may revoke, or may suspend for a period the superintendent determines 50 the registration or license of any pharmacy benefit manager if, after 51 notice and hearing, the superintendent determines that the registrant or 52 licensee or any member, principal, officer, director, or controlling 53 person of the registrant or licensee, has: 54 (1) violated any insurance laws, or violated any regulation, subpoena 55 or order of the superintendent or of another state's insurance commis-S. 6274 6 1 sioner, or has violated any law in the course of his or her dealings in 2 such capacity; 3 (2) provided materially incorrect, materially misleading, materially 4 incomplete or materially untrue information in the registration or 5 license application; 6 (3) obtained or attempted to obtain a registration or license through 7 misrepresentation or fraud; 8 (4)(A) used fraudulent, coercive or dishonest practices; 9 (B) demonstrated incompetence; 10 (C) demonstrated untrustworthiness; or 11 (D) demonstrated financial irresponsibility in the conduct of business 12 in this state or elsewhere; 13 (5) improperly withheld, misappropriated or converted any monies or 14 properties received in the course of business in this state or else- 15 where; 16 (6) intentionally misrepresented the terms of an actual or proposed 17 insurance contract; 18 (7) been convicted of a felony; 19 (8) admitted or been found to have committed any insurance unfair 20 trade practice or fraud; 21 (9) had a pharmacy benefit manager registration or license, or its 22 equivalent, denied, suspended or revoked in any other state, province, 23 district or territory; 24 (10) failed to pay state income tax or comply with any administrative 25 or court order directing payment of state income tax; or 26 (11) ceased to meet the requirements for registration or licensure 27 under this article. 28 (b) Before revoking or suspending the registration or license of any 29 pharmacy benefit manager pursuant to the provisions of this article, the 30 superintendent shall give notice to the registrant or licensee and to 31 every sub-licensee and shall hold, or cause to be held, a hearing not 32 less than ten days after the giving of such notice. 33 (c) If a registration or license pursuant to the provisions of this 34 article is revoked or suspended by the superintendent, then the super- 35 intendent shall forthwith give notice to the registrant or licensee. 36 (d) The revocation or suspension of any registration or license pursu- 37 ant to the provisions of this article shall terminate forthwith such 38 registration or license and the authority conferred thereby upon all 39 sub-licensees. For good cause shown, the superintendent may delay the 40 effective date of a revocation or suspension to permit the registrant or 41 licensee to satisfy some or all of its contractual obligations to 42 perform pharmacy benefit management services in the state. 43 (e)(1) No individual, corporation, firm or association whose registra- 44 tion or license as a pharmacy benefit manager has been revoked pursuant 45 to subsection (a) of this section, and no firm or association of which 46 such individual is a member, and no corporation of which such individual 47 is an officer or director, and no controlling person of the registrant 48 or licensee shall be entitled to obtain any registration or license 49 under the provisions of this article for a period of one year after such 50 revocation, or, if such revocation be judicially reviewed, for one year 51 after the final determination thereof affirming the action of the super- 52 intendent in revoking such license. 53 (2) If any such registration or license held by a firm, association or 54 corporation be revoked, no member of such firm or association and no 55 officer or director of such corporation or any controlling person of the 56 registrant or licensee shall be entitled to obtain any registration orS. 6274 7 1 license, or to be named as a sub-licensee in any such license, under 2 this article for the same period of time, unless the superintendent 3 determines, after notice and hearing, that such member, officer or 4 director was not personally at fault in the matter on account of which 5 such registration or license was revoked. 6 (f) If any registered or licensed pharmacy benefit manager or any 7 person aggrieved shall file with the superintendent a verified complaint 8 setting forth facts tending to show sufficient ground for the revocation 9 or suspension of any pharmacy benefit manager's registration or license, 10 then the superintendent shall, after notice and a hearing, determine 11 whether such registration or license shall be suspended or revoked. 12 (g) The superintendent shall retain the authority to enforce the 13 provisions of and impose any penalty or remedy authorized by this chap- 14 ter against any person or entity who is under investigation for or 15 charged with a violation of this chapter, even if the person's or enti- 16 ty's registration or license has been surrendered, or has expired or has 17 lapsed by operation of law. 18 (h) A registrant or licensee subject to this article shall report to 19 the superintendent any administrative action taken against the regis- 20 trant or licensee in another jurisdiction or by another governmental 21 agency in this state within thirty days of the final disposition of the 22 matter. This report shall include a copy of the order, consent to order 23 or other relevant legal documents. 24 (i) Within thirty days of the initial pretrial hearing date, a regis- 25 trant or licensee subject to this article shall report to the super- 26 intendent any criminal prosecution of the registrant or licensee taken 27 in any jurisdiction. The report shall include a copy of the initial 28 complaint filed, the order resulting from the hearing and any other 29 relevant legal documents. 30 § 2908. Penalties for violations. (a) The superintendent, in lieu of 31 revoking or suspending the registration or license of a registrant or 32 licensee in accordance with the provisions of this article, may in any 33 one proceeding by order, require the registrant or licensee to pay to 34 the people of this state a penalty in a sum not exceeding the greater of 35 (1) two thousand dollars for each offense and five thousand dollars for 36 each subsequent violation or (2) the aggregate gross receipts attribut- 37 able to all offenses. 38 (b) Upon the failure of such a registrant or licensee to pay the 39 penalty ordered pursuant to subsection (a) of this section within twenty 40 days after the mailing of the order, postage prepaid, registered, and 41 addressed to the last known place of business of the licensee, unless 42 the order is stayed by an order of a court of competent jurisdiction, 43 the superintendent may revoke the registration or license of the regis- 44 trant or licensee or may suspend the same for such period as the super- 45 intendent determines. 46 § 2909. Stay or suspension of superintendent's determination. The 47 commencement of a proceeding under article seventy-eight of the civil 48 practice law and rules, to review the action of the superintendent in 49 suspending or revoking or refusing to renew any certificate under this 50 article, shall stay such action of the superintendent for a period of 51 thirty days. Such stay shall not be extended for a longer period unless 52 the court shall determine, after a preliminary hearing of which the 53 superintendent is notified forty-eight hours in advance, that a stay of 54 the superintendent's action pending the final determination or further 55 order of the court will not unduly injure the interests of the people of 56 the state.S. 6274 8 1 § 2910. Revoked registrations or licenses. (a)(1) No person, firm, 2 association, corporation or other entity subject to the provisions of 3 this article whose registration or license under this article has been 4 revoked, or whose registration or license to engage in the business of 5 pharmacy benefit management in any capacity has been revoked by any 6 other state or territory of the United States shall become employed or 7 appointed by a pharmacy benefit manager as an officer, director, manag- 8 er, controlling person or for other services, without the prior written 9 approval of the superintendent, unless such services are for maintenance 10 or are clerical or ministerial in nature. 11 (2) No person, firm, association, corporation or other entity subject 12 to the provisions of this article shall knowingly employ or appoint any 13 person or entity whose registration or license issued under this article 14 has been revoked, or whose registration or license to engage in the 15 business of pharmacy benefit management in any capacity has been revoked 16 by any other state or territory of the United States, as an officer, 17 director, manager, controlling person or for other services, without the 18 prior written approval of the superintendent, unless such services are 19 for maintenance or are clerical or ministerial in nature. 20 (3) No corporation or partnership subject to the provisions of this 21 article shall knowingly permit any person whose registration or license 22 issued under this article has been revoked, or whose registration or 23 license to engage in the business of pharmacy benefit management in any 24 capacity has been revoked by any other state, or territory of the United 25 States, to be a shareholder or have an interest in such corporation or 26 partnership, nor shall any such person become a shareholder or partner 27 in such corporation or partnership, without the prior written approval 28 of the superintendent. 29 (b) The superintendent may approve the employment, appointment or 30 participation of any such person whose registration or license has been 31 revoked: 32 (1) if the superintendent determines that the duties and responsibil- 33 ities of such person are subject to appropriate supervision and that 34 such duties and responsibilities will not have an adverse effect upon 35 the public, other registrants or licensees, or the registrant or licen- 36 see proposing employment or appointment of such person; or 37 (2) if such person has filed an application for reregistration or 38 relicensing pursuant to this article and the application for reregistra- 39 tion or relicensing has not been approved or denied within one hundred 40 twenty days following the filing thereof, unless the superintendent 41 determines within the said time that employment or appointment of such 42 person by a registrant or licensee in the conduct of a pharmacy benefit 43 management business would not be in the public interest. 44 (c) The provisions of this section shall not apply to the ownership of 45 shares of any corporation registered or licensed pursuant to this arti- 46 cle if the shares of such corporation are publicly held and traded in 47 the over-the-counter market or upon any national or regional securities 48 exchange. 49 § 2911. Change of address. A registrant or licensee under this article 50 shall inform the superintendent by a means acceptable to the superinten- 51 dent of a change of address within thirty days of the change. 52 § 2912. Applicability of other laws. Nothing in this article shall be 53 construed to exempt a pharmacy benefit manager from complying with the 54 provisions of articles twenty-one and forty-nine of this chapter and 55 article forty-nine of the public health law or any other provision of 56 this chapter or the financial services law.S. 6274 9 1 § 2913. Assessments. Pharmacy benefit managers that file a registra- 2 tion with the department or are licensed by the department shall be 3 assessed by the superintendent for the operating expenses of the depart- 4 ment that are solely attributable to regulating such pharmacy benefit 5 managers in such proportions as the superintendent shall deem just and 6 reasonable. 7 § 2914. Duty, accountability and transparency. (a) A pharmacy benefit 8 manager shall have a fiduciary relationship with and an obligation to 9 the health insurer and shall perform pharmacy benefit management 10 services with care, skill, prudence, diligence, and professionalism. 11 (b) All funds received by a pharmacy benefit manager in relation to 12 providing pharmacy benefit management services shall be received by the 13 pharmacy benefit manager in trust for the health plan and shall be used 14 or distributed only pursuant to the pharmacy benefit manager's contract, 15 or other terms in the absence of a contract, with the health insurer or 16 applicable law; except for any administrative fee or payment expressly 17 provided for in the contract, or other terms in the absence of a 18 contract, between the pharmacy benefit manager and the health insurer or 19 provider to compensate the pharmacy benefit manager for his or her 20 services. 21 (c) Each pharmacy benefit manager shall periodically account to the 22 health insurer for all funds received by the pharmacy benefit manager. 23 The health plan or provider shall have access to all financial and 24 utilization information of the pharmacy benefit manager in relation to 25 pharmacy benefit management provided to the health plan or provider. 26 (d) The pharmacy benefit manager shall disclose in writing to the 27 health insurer the terms and conditions of any contract or arrangement 28 between the pharmacy benefit manager and any party relating to pharmacy 29 benefit management services provided to the health insurer. 30 (e) The pharmacy benefit manager shall disclose in writing to the 31 health insurer any activity, policy, practice, contract or arrangement 32 of the pharmacy benefit manager that directly or indirectly presents any 33 conflict of interest with the pharmacy benefit manager's relationship 34 with or obligation to the health insurer. 35 (f) Any information required to be disclosed by a pharmacy benefit 36 manager to a health insurer under this section that is reasonably desig- 37 nated by the pharmacy benefit manager as proprietary or trade secret 38 information shall be kept confidential by the health insurer, except as 39 required or permitted by law, including disclosure necessary to prose- 40 cute or defend any legitimate legal claim or cause of action. 41 (g) The superintendent shall establish, by regulation, minimum stand- 42 ards for pharmacy benefit management services which shall address the 43 elimination of conflicts of interest between pharmacy benefit managers 44 and health insurers; and the elimination of deceptive practices, anti- 45 competitive practices, and unfair claims practices. 46 § 2915. Contract provisions. No pharmacy benefit manager shall, with 47 respect to contracts between such pharmacy benefit manager and a pharma- 48 cy or, alternatively, such pharmacy benefit manager and a pharmacy's 49 contracting agent, such as a pharmacy services administrative organiza- 50 tion: 51 (a) prohibit or penalize a pharmacist or pharmacy from disclosing to 52 an individual purchasing a prescription medication information regard- 53 ing: 54 (1) the cost of the prescription medication to the individual, orS. 6274 10 1 (2) the availability of any therapeutically equivalent alternative 2 medications or alternative methods of purchasing the prescription medi- 3 cation, including but not limited to, paying a cash price; 4 (b) charge or collect from an individual a copayment that exceeds the 5 total submitted charges by the pharmacy for which the pharmacy is paid. 6 If an individual pays a copayment, the pharmacy shall retain the adjudi- 7 cated costs and the pharmacy benefit manager shall not redact or recoup 8 the adjudicated cost; or 9 (c) require a pharmacy to meet any pharmacy accreditation standard or 10 recertification requirement inconsistent with, more stringent than, or 11 in addition to federal and state requirements for licensure as a pharma- 12 cy. 13 § 2. Subdivision 4 of section 280-a of the public health law is renum- 14 bered subdivision 5 and a new subdivision 4 is added to read as follows: 15 4. No pharmacy benefit manager shall substitute or cause the substi- 16 tuting of one prescription drug for another in dispensing a prescription 17 or alter or cause the altering of the term of a prescription, except 18 with approval of the prescriber or as explicitly required or permitted 19 by law. 20 § 3. Subsection (b) of section 2402 of the insurance law, as amended 21 by section 71 of part A of chapter 62 of the laws of 2011, is amended to 22 read as follows: 23 (b) "Defined violation" means the commission by a person of an act 24 prohibited by: subsection (a) of section one thousand one hundred two, 25 section one thousand two hundred fourteen, one thousand two hundred 26 seventeen, one thousand two hundred twenty, one thousand three hundred 27 thirteen, subparagraph (B) of paragraph two of subsection (i) of section 28 one thousand three hundred twenty-two, subparagraph (B) of paragraph two 29 of subsection (i) of section one thousand three hundred twenty-four, two 30 thousand one hundred two, two thousand one hundred seventeen, two thou- 31 sand one hundred twenty-two, two thousand one hundred twenty-three, 32 subsection (p) of section two thousand three hundred thirteen, section 33 two thousand three hundred twenty-four, two thousand five hundred two, 34 two thousand five hundred three, two thousand five hundred four, two 35 thousand six hundred one, two thousand six hundred two, two thousand six 36 hundred three, two thousand six hundred four, two thousand six hundred 37 six, two thousand seven hundred three, two thousand nine hundred two, 38 two thousand nine hundred five, three thousand one hundred nine, three 39 thousand two hundred twenty-four-a, three thousand four hundred twenty- 40 nine, three thousand four hundred thirty-three, paragraph seven of 41 subsection (e) of section three thousand four hundred twenty-six, four 42 thousand two hundred twenty-four, four thousand two hundred twenty-five, 43 four thousand two hundred twenty-six, seven thousand eight hundred nine, 44 seven thousand eight hundred ten, seven thousand eight hundred eleven, 45 seven thousand eight hundred thirteen, seven thousand eight hundred 46 fourteen and seven thousand eight hundred fifteen of this chapter; or 47 section 135.60, 135.65, 175.05, 175.45, or 190.20, or article one 48 hundred five of the penal law. 49 § 4. This act shall take effect immediately and shall be deemed to 50 have been in full force and effect on and after July 1, 2019.
