Enacts the "New York affordable drug manufacturing act" to direct the commissioner of health to enter into partnerships to increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of prescription drugs for public and private purchasers, taxpayers, and consumers, and to increase patient access to affordable drugs.
STATE OF NEW YORK
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1618
2025-2026 Regular Sessions
IN SENATE
January 13, 2025
___________
Introduced by Sens. RIVERA, COONEY, MAY -- read twice and ordered print-
ed, and when printed to be committed to the Committee on Health
AN ACT to amend the public health law, in relation to enacting the "New
York affordable drug manufacturing act"
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "New York affordable drug manufacturing act".
3 § 2. Article 2-A of the public health law is amended by adding a new
4 title IV to read as follows:
5 TITLE IV
6 NEW YORK AFFORDABLE DRUG MANUFACTURING ACT
7 Section 282. Definitions.
8 283. Partnerships; production and distribution of generic
9 prescription drugs.
10 284. Reporting.
11 285. Proprietary information.
12 § 282. Definitions. As used in this title, the following terms shall
13 have the following meanings:
14 1. "Generic prescription drug" means a drug that is approved pursuant
15 to an application submitted under subdivision (j) of section 355 of the
16 Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 301 et seq.), or a
17 biosimilar, as defined under the federal Public Health Service Act (42
18 U.S.C. Sec. 262) that is not under patent.
19 2. "Partnerships" means agreements for the procurement of generic
20 prescription drugs by way of contracts or purchasing by a payer, state
21 governmental agency, group purchasing organization, nonprofit organiza-
22 tion, or other entity.
23 § 283. Partnerships; production and distribution of generic
24 prescription drugs. 1. (a) The commissioner shall enter into partner-
25 ships, consistent with paragraph (b) of subdivision two of this section,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04133-01-5
S. 1618 2
1 in consultation with all appropriate state agencies and the department
2 of health or equivalent institution of any other state as determined by
3 the commissioner, to increase competition, lower prices, and address
4 shortages in the market for generic prescription drugs, to reduce the
5 cost of prescription drugs for public and private purchasers, taxpayers,
6 and consumers, and to increase patient access to affordable drugs.
7 (b) The department shall have the ability to hire staff to oversee and
8 project-manage the partnerships for manufacturing or distribution of
9 generic prescription drugs.
10 2. (a) The commissioner shall enter into partnerships resulting in the
11 production or distribution of generic prescription drugs, with the
12 intent that these drugs be made widely available to public and private
13 purchasers, facilities licensed pursuant to article twenty-eight of this
14 chapter, and pharmacies as defined in section six thousand eight hundred
15 two of the education law, as appropriate. The generic prescription drugs
16 shall be produced or distributed by a drug company or generic drug
17 manufacturer that is registered with the United States Food and Drug
18 Administration.
19 (b) (i) The commissioner shall only enter into partnerships pursuant
20 to paragraph (a) of this subdivision to produce a generic prescription
21 drug at a price that results in savings, targets failures in the market
22 for generic drugs, and improves patient access to affordable medica-
23 tions.
24 (ii) For top drugs identified pursuant to the criteria listed in
25 subparagraph (v) of this paragraph, the department shall determine if
26 viable pathways exist for partnerships to manufacture or distribute
27 generic prescription drugs by examining the relevant legal, market,
28 policy, and regulatory factors.
29 (iii) The department shall consider the following, if applicable, when
30 setting the price of the generic prescription drug:
31 (1) United States Food and Drug Administration user fees.
32 (2) Abbreviated new drug application acquisition costs amortized over
33 a five-year period.
34 (3) Mandatory rebates.
35 (4) Total contracting and production costs for the drug, including a
36 reasonable amount for administrative, operating, and rate-of-return
37 expenses of the drug company or generic drug manufacturer.
38 (5) Research and development costs attributed to the drug over a five-
39 year period.
40 (6) Other initial start-up costs amortized over a five-year period.
41 (iv) Each drug shall be made available to providers, patients, and
42 purchasers at a transparent price and without rebates, other than feder-
43 ally required rebates.
44 (v) The department shall prioritize the selection of generic
45 prescription drugs that have the greatest impact on lowering drug costs
46 to patients, increasing competition and addressing shortages in the
47 prescription drug market, improving public health, or reducing the cost
48 of prescription drugs to public and private purchasers.
49 (c) (i) In identifying generic prescription drugs to be produced, the
50 department shall consider prescription drug retail price lists made
51 pursuant to section two hundred seventy-eight of this article.
52 (ii) The partnerships entered into pursuant to paragraph (a) of this
53 subdivision shall include the production of at least one form of insu-
54 lin, provided that a viable pathway for manufacturing a more affordable
55 form of insulin exists.
S. 1618 3
1 (iii) The department shall prioritize drugs for chronic and high-cost
2 conditions.
3 (d) The department shall consult with all of the following public and
4 private purchasers to assist in developing a list of generic
5 prescription drugs to be manufactured or distributed through partner-
6 ships and to determine the volume of each generic prescription drug that
7 can be procured over a multiyear period to support a market for a lower
8 cost generic prescription drug:
9 (i) The department of mental hygiene, the office for people with
10 developmental disabilities, the office of general services, and the
11 department of corrections and community supervision, or the entities
12 acting on behalf of each of those state purchasers.
13 (ii) Health insurers licensed pursuant to the insurance law.
14 (iii) Hospitals.
15 (iv) Any other entity as determined by the commissioner.
16 (e) Before effectuating a partnership pursuant to this section, the
17 commissioner shall determine minimum thresholds for procurement of an
18 entity's expected volume of a targeted drug from the company or manufac-
19 turer over a multiyear period.
20 (f) All state agencies shall be required to purchase generic
21 prescription drugs from the department or entities that contract or
22 partner with the department pursuant to this chapter.
23 (g) The department shall not be required to consult with every entity
24 listed in subparagraphs (ii), (iii) and (iv) of paragraph (d) of this
25 subdivision, so long as purchaser engagement includes a reasonable
26 representation from these groups.
27 § 284. Reporting. 1. On or before January first, two thousand twenty-
28 eight, the department shall submit a report to the legislature that
29 assesses the feasibility of directly manufacturing generic prescription
30 drugs and selling generic prescription drugs at a fair price. The report
31 shall include, but not be limited to, an analysis of governance struc-
32 ture options for manufacturing functions, including chartering a private
33 organization, a public-private partnership, or a public board of direc-
34 tors.
35 2. On or before March first, two thousand twenty-seven, the department
36 shall report to the legislature on both of the following:
37 (a) A description of the status of all drugs targeted under this chap-
38 ter.
39 (b) An analysis of how the activities of the department may impact
40 competition, access to targeted drugs, the costs of those drugs, and the
41 costs of generic prescription drugs to public and private purchasers.
42 § 285. Proprietary information. Notwithstanding any provision of law
43 to the contrary, all nonpublic information and documents obtained by the
44 department pursuant to this title shall not be required to be disclosed
45 pursuant to article six of the public officers law.
46 § 3. Severability. If any clause, sentence, paragraph, section or part
47 of this act shall be adjudged by any court of competent jurisdiction to
48 be invalid and after exhaustion of all further judicial review, the
49 judgment shall not affect, impair or invalidate the remainder thereof,
50 but shall be confined in its operation to the clause, sentence, para-
51 graph, section or part of this act directly involved in the controversy
52 in which the judgment shall have been rendered.
53 § 4. This act shall take effect on the first of January next succeed-
54 ing one year after it shall have become a law.
