BILL NUMBER: S438A
SPONSOR: MYRIE
 
TITLE OF BILL:
An act to amend the insurance law, in relation to prescription drug
supply chain transparency; and to amend the state finance law, in
relation to deposits into the pharmacy benefit manager regulatory fund
 
PURPOSE:
Requires registration and disclosures by Pharmacy Services Administra-
tive Organizations (PSA0s), switch companies, and rebate aggregators to
the Department of Financial Services (DFS).
 
SUMMARY:
Section 1 names the act the "Prescription Drug Supply Chain Transparency
Act."
Section 2 adds Article 30 to the Insurance Law (sections 3001-3010),
defining manufacturer, PSAO, rebate aggregator, and switch company;
requires electronic filings, special reports, investigations by the DFS
Superintendent, registration, and disclosures; and directs fees and
penalties to the Pharmacy Benefit Manager Regulatory Fund under State
Finance Law section 99-oo.
Section 3 amends State Finance Law section 99-oo to deposit collected
fees and penalties into the fund.
Section 4 sets the effective date.
 
JUSTIFICATION:
Rising drug costs burden New Yorkers. Intermediaries such as PBMs,
PSAOs, switch companies, and rebate aggregators operate with little
oversight and may engage in conflicts of interest, anticompetitive, or
deceptive practices that raise costs. Federal scrutiny has increased,
including a 2022 FTC inquiry and a 2023 U.S. House investigation. The
bill increases transparency and accountability through annual registra-
tion, conflict disclosures, and audited financial reporting.
 
LEGISLATIVE HISTORY:
S6738 (2023-24): Passed Senate.
 
FISCAL IMPLICATIONS:
None. Fees and penalties fund implementation through the Pharmacy Bene-
fit Manager Regulatory Fund.
 
EFFECTIVE DATE:
150 days after becoming law.

Statutes affected:
S438: 99-oo state finance law, 99-oo(3) state finance law
S438A: 99-oo state finance law, 99-oo(3) state finance law