BILL NUMBER: S3485A
SPONSOR: HINCHEY
 
TITLE OF BILL:
An act to amend the insurance law, in relation to prescription drug
formulary coverage for interchangeable biologics and biosimilars
 
PURPOSE:
To reduce prescription drug costs in New York by allowing biosimilar
medicines to be substituted for the original biologics.
 
SUMMARY OF PROVISIONS:
Section one amends section 4903 of the Insurance law to add both inter-
changeable biologics and biosimilars to New York's step therapy proto-
col, allowing utilization review agents to require an insured to try an
interchangeable biologic or biosimilar medication before covering the
name brand drug. Section two amends section 3242 of the Insurance law to
allow insurance companies to move a reference drug to a tier with a
larger deductible, copayment, or coinsurance if a biosimilar version of
that drug exists and is added to the formulary at the same time. Section
three amends section 4329 of the Insurance law to allow non-pro- fit
insurance companies to move a reference drug to a tier with a larger
deductible, copayment, or coinsurance if a biosimilar version of that
drug exists and is added to the formulary at the same time. Section four
redesignates a subsection from (c) to
(d). Section five redesignates a subsection (c) to (d). Section six
establishes the effective date.
 
JUSTIFICATION:
Biological medications or 'biologics' are on the cutting edge of medical
technology and are used to treat complicated conditions and diseases,
including cancer, rheumatoid arthritis, diabetes, and multiple sclero-
sis. These drugs are often life-changing and lifesaving, but they are
also delicate and complicated to produce. Biologics are made using
living organisms that produce the proteins required to make the medica-
tion. This process makes these medications incredibly cost-prohibitive
for companies to develop and test, resulting in high costs to patients
and insurance companies. However, alternative versions of biologics
called 'biosimilars' have been developed. Biosimilars are FDA-approved
drugs that are similar to an existing biologic medication (or reference
drug) and produce the same outcome. Biosimilars are produced by manufac-
turers who did not develop the original biologic. Because these manufac-
turers did not have to finance the extensive costs associated with
biologic development, they can sell the medication at a lower cost. In
addition, biosimilars under- go an abbreviated FDA approval process
because the reference biologic has demonstrated the medication's effec-
tiveness. This shorter proceeding further reduces development costs for
biosimilar manufacturers and contributes to lower biosimilar prices.
This bill would amend New York State's insurance law to allow insurance
providers to require their insureds to try a biosimilar medication
instead of the reference drug and place a biosimilar in a less expensive
tier of prescription medication. This would generate cost savings for
both the patient and the insurance company as biosimilars can vary in
price from the reference product from as low as 5% to in most cases 85%
less expensive, making access to medication more affordable for patients
and relieving the costs that insurance plans are incurring as well as
subscribers who continue to see higher costs in premiums due to alleged
high prescription drug costs. By encouraging lower cost products to be
offered at the lowest cost for patients, we are encouraging lower costs
for the patients and those employers and plans paying for the products.
 
LEGISLATIVE HISTORY:
2023-2024: A.9055/S.7768
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S3485: 4903 insurance law, 4903(c-1) insurance law, 3242 insurance law, 3242(c) insurance law, 4329 insurance law, 4329(c) insurance law
S3485A: 4903 insurance law, 4903(c-1) insurance law, 3242 insurance law, 3242(c) insurance law, 4329 insurance law, 4329(c) insurance law