BILL NUMBER: S2128
SPONSOR: JACKSON
 
TITLE OF BILL:
An act to amend the insurance law and the public health law, in relation
to requiring certain health insurance issuers to certify that at least a
majority of prescription drug rebates are provided to patients at the
point of sale
 
PURPOSE:
To ensure patients benefit from substantial discounts that exist within
the prescription drug supply chain.
 
SUMMARY OF PROVISIONS:
Section 1 adds a new Section 3245 to Article 32 of the Insurance Law,
defining "Defined cost sharing," "Insurer," "Price Protection Rebate,"
and "Rebate;" requiring individual and small group carriers to certify
that at least a majority (greater than 85%) of prescription drug rebates
are provided to patients at the point of sale.
Section 2 adds a new Section 4331 to Article 43 of the Insurance Law,
defining "Defined cost sharing," "Insurer," "Price Protection Rebate,"
and "Rebate;" requiring individual and small group carriers to certify
that at least a majority (greater than 85%) of prescription drug rebates
are provided to patients at the point of sale.
Section 3 adds a new Section 4417 to Article 44 of the Public Health
Law, defining "Defined cost sharing," "Insurer," "Price Protection
Rebate," and "Rebate;" requiring individual and small group carriers to
certify that at least a majority (greater than 85%) of prescription drug
rebates are provided to patients at the point of sale.
Section 4 is the effective date.
 
JUSTIFICATION:
The difference between list prices of prescription drugs and the net
prices paid by pharmacy benefit managers and health insurers has been
growing exponentially in recent years. While many entities benefit from
these large negotiated discounts - estimated at $166 billion in 2018 one
group gets the short end of the stick: patients.
As more and more health insurance benefit designs rely on coinsurance
and deductibles, patients end up paying cost sharing on the list price
of the drug even as their health plan is reaping significant discounts.
Unlike negotiated discounts on other services like hospital care, these
savings are not shared with patients in the deductible phase of a plan
and patients often end up paying more than their health plan for a drug.
Plans argue that the discounts are used to lower premiums for everyone,
but patients with complex and chronic conditions end up carrying the
biggest burden - exactly the opposite of how insurance should work. This
bill strikes a careful balance, allowing rebates and discounts to be
socialized and keep premiums down to a point, but also making sure some
of those significant discounts are passed along to the place they're
most important to patients - at the pharmacy counter.
West Virginia is currently the only state requiring drug rebates to be
passed along to the patient at the point of sale. The legislation is
considered the model for other states with rebates at 100$ being passed
along to patients. Many health plans have already implemented this
option and have marketed this approach as good for patients and "worth
it."
 
LEGISLATIVE HISTORY:
2023-2024: S.2393B - REPORTED AND COMMITTED TO FINANCE/ A. 1962-A -
amend and recommit to insurance
2021-2022: S.2006 - Referred to Insurance/A. 5218-A - Referred to Insur-
ance
2019-2020: S.6489 - Referred to Insurance/A. 8310 - Referred to Insur-
ance
 
STATE AND LOCAL FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.