BILL NUMBER: S950
SPONSOR: THOMAS
 
TITLE OF BILL:
An act to amend the public health law, in relation to pharmacy benefit
managers
 
PURPOSE OR GENERAL IDEA OF BILL:
This bill requires pharmacy benefit managers to reimburse pharmacies no
less than their acquisition costs for prescription drugs.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends Public Health Law 6 280-a to add new defi-
nitions for "pharmacy acquisition cost," "pharmacy benefit manager
affiliate," and "pharmacy benefits plan or program."
The bill also allows a pharmacy to appeal a dispute regarding generic
drug pricing, including reimbursement below the pharmacy acquisition
cost. If the national drug code number provide by the pharmacy benefit
manager is not available to the pharmacy from their usual wholesaler
then the pharmacy benefit manager must adjust the maximum allowable cost
and allow the pharmacy to reverse and rebill. A pharmacy benefit manager
cannot reimburse a pharmacy less than the amount that the pharmacy bene-
fit manager reimburses a pharmacy benefit manager affiliate for the same
services. A pharmacy may decline to provide services if, as a result of
a maximum allowable cost, a pharmacy is to be paid less than the acqui-
sition cost.
A pharmacy benefit manager must allow pharmacies subject to the maximum
allow cost price to access the prices and must update the maximum allow-
able cost prices within seven days of an increase of ten percent or more
in the pharmacy acquisition cost from sixty percent or more of pharma-
ceutical wholesalers doing business in the state.
Section two of the bill is the effective date.
 
JUSTIFICATION:
Pharmacy benefit managers (PBMs) are companies that manage prescription
drug benefit programs for health plans. For generic drugs, PBMs utilize
pricing benchmarks, known as maximum allowable costs (MACs) developed
and managed by each individual PBM. MAC pricing is not generally
included in contracts between PBMs and pharmacies and each pharmacy
patient's health policy may be governed by a different MAC list to which
the pharmacist does not have access. This makes it difficult for a
pharmacy to know the reimbursement rate of a generic drug prior to fill-
ing a prescription.
In addition to a lack of transparency surrounding generic drug pricing,
PBMs also unfairly reimburse pharmacies. Reimbursement rates are often
less than the amount that it cost the pharmacy to purchase the drug.
Individual PBM reimbursement rates are also not uniform - PBM-affiliated
pharmacies receive reimbursement at significantly higher rates.
This bill addresses both the transparency and reimbursement issues aris-
ing from pharmacy benefit managers.
 
PRIOR LEGISLATIVE HISTORY:
2021-22: S.6020 (Thomas) - Referred to Health.
 
FISCAL IMPLICATIONS:
None to the state.
 
EFFECTIVE DATE:
This act shall take effect immediately.