S6940  HANNON   Same as A 8781  Rosenthal L      Add Alert 

 
                STATE OF NEW YORK
        ________________________________________________________________________

                                          6940

                               2017-2018 Regular Sessions

                    IN SENATE

                                    November 13, 2017
                                       ___________

        Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules

        AN ACT to amend the public health law, in relation to prohibited  activ-
          ities by pharmacy benefit managers

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 280-a of the public health law is amended by adding
     2  two new subdivisions 3 and 4 to read as follows:
     3    3. No pharmacy  benefit  manager  shall,  with  respect  to  contracts
     4  between  such pharmacy benefit manager and a pharmacy or, alternatively,
     5  such pharmacy benefit manager and a pharmacy's contracting  agent,  such
     6  as a pharmacy services administrative organization:
     7    (a)  prohibit  or penalize a pharmacist or pharmacy from disclosing to
     8  an individual purchasing a prescription medication  information  regard-
     9  ing:
    10    (1) the cost of the prescription medication to the individual, or
    11    (2)  the  availability  of  any therapeutically equivalent alternative
    12  medications or alternative methods of purchasing the prescription  medi-
    13  cation, including but not limited to, paying a cash price; or
    14    (b)  charge or collect from an individual a copayment that exceeds the
    15  total submitted charges by the pharmacy for which the pharmacy is  paid.
    16  If an individual pays a copayment, the pharmacy shall retain the adjudi-
    17  cated  costs and the pharmacy benefit manager shall not redact or recoup
    18  the adjudicated cost.
    19    4. Any provision of a contract that violates the  provisions  of  this
    20  section shall be deemed to be void and unenforceable.
    21    §  2.  This  act shall take effect on the ninetieth day after it shall
    22  have become a law.


         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13755-01-7

 
BILL NUMBER: S6940

SPONSOR: HANNON

 
TITLE OF BILL:

An act to amend the public health law, in relation to prohibited activ-
ities by pharmacy benefit managers

 
PURPOSE:

To prohibit pharmacy benefit managers from imposing clawbacks and phar-
macy gag clauses

 
SUMMARY OF PROVISIONS:

Section one amends Public Health Law § 280-a to bar Pharmacy Benefit
Managers (PBMs) from prohibiting or penalizing pharmacists from disclos-
ing to individuals the cost of a prescription medication and the avail-
ability of therapeutically equivalent alternatives or alternative
payment methods, such as paying cash, that may be less expensive.

Further, this section prohibits the imposition of a copayment that
exceeds the total submitted charge by the pharmacy and prohibits a PBM
from redacting or recouping the adjudicated cost from the pharmacy.

Lastly, this section is amended to provide that any contract that
violates the provisions of this section shall be deemed void and unen-
forceable.

Section two provides that the act shall take effect 90 days after enact-
ment.

 
JUSTIFICATION:

As prescription drug costs continue to drive up health care costs, the
practices of pharmacy benefit managers have come into question, and a
number of states have sought to provide consumers more transparency in
drug pricing. One practice, referred to as pharmacy clawbacks occurs
when a patient pays the pharmacy a copayment that is more than the actu-
al cost of the drug, the PBM then recoups or clawsback the excess cost
collected by the pharmacy. Some reports suggest clawbacks happen in 10%
of pharmacist transactions. Another practice, referred to as gag claus-
es, prohibit a pharmacists from telling a consumer the price of the
medication or the fact that if they simply pay out of pocket the drug
would actually cost less. PBMs prohibit such disclosure as it would
limit their ability to clawback. This legislation would prohibit such
practices.

Mirroring language adopted in other states such as Connecticut, Tennes-
see, North Dakota, Georgia and Louisiana, this legislation will ensure
New York consumers are not overpaying for prescription medications only
to benefit PBMs.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
90 days after enactment.