BILL NUMBER: S3485
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
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 biosimiiar 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 from (c) to (d).
Section six establishes the 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 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 (for reference drug)and produce the same
outcome. Biosimilars are produced by manufactures did not develop the
original biologic. Because these manufacturers did not have to finance
the extensive costs associated with biologic development, they can sell
the medication at a lower cost. In addition, biosimilar undergo an
abbreviated FDA approval process because the reference biologic has
demonstrated the medication's effectiveness. This shorter proceeding
further reduces a 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 plant 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