Requires a pharmacy benefit manager to pay a participating pharmacy at minimum at the national average drug acquisition cost (NADAC) rate, or at the pharmacy acquisition cost rate if greater or there is not a NADAC rate, plus a professional dispensing fee that is at minimum the professional dispensing fee paid under the state medical assistance program.
STATE OF NEW YORK
________________________________________________________________________
5882--B
2025-2026 Regular Sessions
IN ASSEMBLY
February 24, 2025
___________
Introduced by M. of A. McDONALD, WOERNER, BOLOGNA, DAIS, GRIFFIN, HEVE-
SI, STIRPE, LEE, KAY, BRABENEC, BUTTENSCHON, SHIMSKY, GLICK, McMAHON,
MANKTELOW, ANGELINO, K. BROWN, BLANKENBUSH, ROMERO, OTIS, PAULIN,
DINOWITZ, SOLAGES, SAYEGH, GALLAHAN, JONES, SIMONE, ALVAREZ, RAJKUMAR,
REYES, BURDICK, LASHER, LUPARDO, BARRETT, RA, ROSENTHAL, SIMON, McDO-
NOUGH, BENEDETTO, ZACCARO, DeSTEFANO, BLUMENCRANZ -- Multi-Sponsored
by -- M. of A. LEVENBERG -- read once and referred to the Committee
on Health -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- again reported from said
committee with amendments, ordered reprinted as amended and recommit-
ted to said committee
AN ACT to amend the public health law and the insurance law, in relation
to payments by pharmacy benefit managers to participating pharmacies
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 280-a of the public health law is
2 amended by adding two new paragraphs (j) and (k) to read as follows:
3 (j) "Pharmacy acquisition cost rate" means the cost paid by a partic-
4 ipating pharmacy to acquire generic, brand name drugs, or biologic
5 products, or drugs produced through genetic technology or biopharmaceu-
6 tical processes pursuant to cost invoices from the pharmacy.
7 (k) "National average drug acquisition cost" means the monthly survey
8 of retail pharmacies conducted by the federal Centers for Medicare and
9 Medicaid Services (CMS) to determine average acquisition cost for Medi-
10 caid covered outpatient drugs.
11 § 2. Subdivision 3 of section 280-a of the public health law, as
12 amended by chapter 128 of the laws of 2022, is amended to read as
13 follows:
14 3. Prescriptions. (a) A pharmacy benefit manager may not substitute or
15 cause the substituting of one prescription drug for another in dispens-
16 ing a prescription, or alter or cause the altering of the terms of a
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01972-08-5
A. 5882--B 2
1 prescription, except with the approval of the prescriber or as explicit-
2 ly required or permitted by law, including regulations of the department
3 of financial services or the department of health. The superintendent
4 and commissioner, in coordination with each other, are authorized to
5 promulgate regulations to determine when substitution of prescription
6 drugs may be required or permitted.
7 (b) To the extent permitted under federal law, a pharmacy benefit
8 manager shall pay a participating pharmacy at minimum at the national
9 average drug acquisition cost (NADAC) rate or at the pharmacy acquisi-
10 tion cost rate if there is not a NADAC rate, plus a professional
11 dispensing fee that is at minimum the professional dispensing fee paid
12 under the state medical assistance program. For generic, brand name
13 medications, biologic products, or drugs produced through genetic tech-
14 nology or biopharmaceutical processes as required by a manufacturer, a
15 federal or state regulatory agency, or accrediting body that require
16 unique handling, distribution or administration, in-depth patient teach-
17 ing, coordination of care, or frequent or special monitoring to ensure
18 successful use, special packaging, shipping or other costs to be
19 incurred by the pharmacy for the dispensing process that is greater than
20 the professional dispensing fee paid by the state medical assistance
21 program, participating pharmacies shall be paid a professional dispens-
22 ing fee for these costs to ensure a participating pharmacy is not paid
23 less than its cost to acquire and dispense medications. A pharmacy
24 benefit manager shall not pay a participating pharmacy below its pharma-
25 cy acquisition cost but may require demonstration of such cost through
26 the provision of pharmacy invoices. Provided, however, this paragraph
27 shall not apply to prescriptions, prescription drugs, or payments for
28 prescription drugs, distributed, or paid for in whole or in part, by a
29 trust fund established or maintained under the Labor Management
30 Relations Act (29 U.S. Code § 186), pursuant to coverage required by the
31 terms of a collective bargaining agreement between an employer and a
32 labor organization or certified employee organization; or pursuant to a
33 health plan, welfare fund, pharmaceutical plan, or other form of medical
34 or prescription coverage established, adopted, utilized, funded, or
35 agreed upon by an employer and a labor organization or certified employ-
36 ee organization pursuant to a collective bargaining agreement; or, where
37 the plan, coverage, fund, or program has been collectively bargained and
38 pertains to a sponsored multi-employer plan, including but not limited
39 to, plans developed under article five-G of the general municipal law,
40 articles forty-four and forty-seven of the insurance law, or any plans
41 created pursuant to the Internal Revenue Code, Employee Retirement
42 Income Security Act or any applicable federal statute that provides such
43 benefits to employee and retiree groups.
44 § 3. The opening paragraph of subdivision 4 of section 280-a of the
45 public health law, as added by chapter 828 of the laws of 2021, is
46 amended to read as follows:
47 A pharmacy benefit manager shall, with respect to contracts between a
48 pharmacy benefit manager and a pharmacy or, alternatively, a pharmacy
49 benefit manager and a pharmacy's contracting agent, such as a pharmacy
50 services administrative organization, include a reasonable process to
51 appeal, investigate and resolve disputes regarding multi-source generic,
52 brand name, and biologic product, and drugs produced through genetic
53 technology or biopharmaceutical processes drug pricing. The appeals
54 process shall include the following provisions:
55 § 4. Section 2911 of the insurance law is amended by adding a new
56 subsection (d) to read as follows:
A. 5882--B 3
1 (d) To the extent permitted under federal law, a pharmacy benefit
2 manager shall pay a participating pharmacy at minimum at the national
3 average drug acquisition cost (NADAC) rate, as defined in subdivision
4 one of section two hundred eighty-a of the public health law, or at the
5 pharmacy acquisition cost rate, as defined in subdivision one of section
6 two hundred eighty-a of the public health law, if there is not a NADAC
7 rate, plus a professional dispensing fee that is at minimum the profes-
8 sional dispensing fee paid under the state medical assistance program.
9 For generic, brand name medications, biologic products, or drugs
10 produced through genetic technology or biopharmaceutical processes as
11 required by a manufacturer, a federal or state regulatory agency, or
12 accrediting body that require unique handling, distribution or adminis-
13 tration, in-depth patient teaching, coordination of care, or frequent or
14 special monitoring to ensure successful use, special packaging, shipping
15 or other costs to be incurred by the pharmacy for the dispensing process
16 that is greater than the professional dispensing fee paid by the state
17 medical assistance program, participating pharmacies shall be paid a
18 professional dispensing fee for these costs to ensure a participating
19 pharmacy is not paid less than its cost to acquire and dispense medica-
20 tions. A pharmacy benefit manager shall not pay a participating pharmacy
21 below its pharmacy acquisition cost but may require demonstration of
22 such cost through the provision of pharmacy invoices. A pharmacy benefit
23 manager shall, with respect to contracts between a pharmacy benefit
24 manager and a pharmacy or, alternatively, a pharmacy benefit manager and
25 a pharmacy's contracting agent, such as a pharmacy services administra-
26 tive organization, include a reasonable process to appeal, investigate
27 and resolve disputes regarding multi-source generic, brand name, biolog-
28 ic product, and drugs produced through genetic technology or biopharma-
29 ceutical processes drug pricing. The appeals process shall be considered
30 within the existing appeals process under section two hundred eighty-a
31 of the public health law. Provided, however, this paragraph shall not
32 apply to prescriptions, prescription drugs, or payments for prescription
33 drugs, distributed, or paid for in whole or in part, by a trust fund
34 established or maintained under the Labor Management Relations Act (29
35 U.S. Code § 186), pursuant to coverage required by the terms of a
36 collective bargaining agreement between an employer and a labor organ-
37 ization or certified employee organization; or pursuant to a health
38 plan, welfare fund, pharmaceutical plan, or other form of medical or
39 prescription coverage established, adopted, utilized, funded, or agreed
40 upon by an employer and a labor organization or certified employee
41 organization pursuant to a collective bargaining agreement; or, where
42 the plan, coverage, fund, or program has been collectively bargained and
43 pertains to a sponsored multi-employer plan, including but not limited
44 to, plans developed under article five-G of the general municipal law,
45 articles forty-four and forty-seven of the insurance law, or any plans
46 created pursuant to the Internal Revenue Code, Employee Retirement
47 Income Security Act or any applicable federal statute that provides such
48 benefits to employee and retiree groups.
49 § 5. This act shall take effect January 1, 2026 and shall apply to all
50 policies and contracts issued, renewed, modified, altered or amended on
51 and after such date.
