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
________________________________________________________________________
5939--B
2025-2026 Regular Sessions
IN SENATE
March 4, 2025
___________
Introduced by Sens. SKOUFIS, ADDABBO, FAHY, FERNANDEZ, GALLIVAN, GRIFFO,
HINCHEY, MARTINS, MAYER, RIVERA, C. RYAN, SCARCELLA-SPANTON, STAVISKY
-- read twice and ordered printed, and when printed to be committed to
the Committee on Health -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
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
17 prescription, except with the approval of the prescriber or as explicit-
18 ly required or permitted by law, including regulations of the department
19 of financial services or the department of health. The superintendent
20 and commissioner, in coordination with each other, are authorized to
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01972-07-5
S. 5939--B 2
1 promulgate regulations to determine when substitution of prescription
2 drugs may be required or permitted.
3 (b) To the extent permitted under federal law, a pharmacy benefit
4 manager shall pay a participating pharmacy at minimum at the national
5 average drug acquisition cost (NADAC) rate or at the pharmacy acquisi-
6 tion cost rate if there is not a NADAC rate, plus a professional
7 dispensing fee that is at minimum the professional dispensing fee paid
8 under the state medical assistance program. For generic, brand name
9 medications, biologic products, or drugs produced through genetic tech-
10 nology or biopharmaceutical processes as required by a manufacturer, a
11 federal or state regulatory agency, or accrediting body that require
12 unique handling, distribution or administration, in-depth patient teach-
13 ing, coordination of care, or frequent or special monitoring to ensure
14 successful use, special packaging, shipping or other costs to be
15 incurred by the pharmacy for the dispensing process that is greater than
16 the professional dispensing fee paid by the state medical assistance
17 program, participating pharmacies shall be paid a professional dispens-
18 ing fee for these costs to ensure a participating pharmacy is not paid
19 less than its cost to acquire and dispense medications. A pharmacy
20 benefit manager shall not pay a participating pharmacy below its pharma-
21 cy acquisition cost but may require demonstration of such cost through
22 the provision of pharmacy invoices. Provided, however, this paragraph
23 shall not apply to prescriptions, prescription drugs, or payments for
24 prescription drugs, distributed, or paid for in whole or in part, by a
25 trust fund established or maintained under the Labor Management
26 Relations Act (29 U.S. Code § 186), pursuant to coverage required by the
27 terms of a collective bargaining agreement between an employer and a
28 labor organization or certified employee organization; or pursuant to a
29 health plan, welfare fund, pharmaceutical plan, or other form of medical
30 or prescription coverage established, adopted, utilized, funded, or
31 agreed upon by an employer and a labor organization or certified employ-
32 ee organization pursuant to a collective bargaining agreement; or, where
33 the plan, coverage, fund, or program has been collectively bargained and
34 pertains to a sponsored multi-employer plan, including but not limited
35 to, plans developed under article five-G of the general municipal law,
36 articles forty-four and forty-seven of the insurance law, or any plans
37 created pursuant to the Internal Revenue Code, Employee Retirement
38 Income Security Act or any applicable federal statute that provides such
39 benefits to employee and retiree groups.
40 § 3. The opening paragraph of subdivision 4 of section 280-a of the
41 public health law, as added by chapter 828 of the laws of 2021, is
42 amended to read as follows:
43 A pharmacy benefit manager shall, with respect to contracts between a
44 pharmacy benefit manager and a pharmacy or, alternatively, a pharmacy
45 benefit manager and a pharmacy's contracting agent, such as a pharmacy
46 services administrative organization, include a reasonable process to
47 appeal, investigate and resolve disputes regarding multi-source generic,
48 brand name, and biologic product, and drugs produced through genetic
49 technology or biopharmaceutical processes drug pricing. The appeals
50 process shall include the following provisions:
51 § 4. Section 2911 of the insurance law is amended by adding a new
52 subsection (d) to read as follows:
53 (d) To the extent permitted under federal law, a pharmacy benefit
54 manager shall pay a participating pharmacy at minimum at the national
55 average drug acquisition cost (NADAC) rate, as defined in subdivision
56 one of section two hundred eighty-a of the public health law, or at the
S. 5939--B 3
1 pharmacy acquisition cost rate, as defined in subdivision one of section
2 two hundred eighty-a of the public health law, if there is not a NADAC
3 rate, plus a professional dispensing fee that is at minimum the profes-
4 sional dispensing fee paid under the state medical assistance program.
5 For generic, brand name medications, biologic products, or drugs
6 produced through genetic technology or biopharmaceutical processes as
7 required by a manufacturer, a federal or state regulatory agency, or
8 accrediting body that require unique handling, distribution or adminis-
9 tration, in-depth patient teaching, coordination of care, or frequent or
10 special monitoring to ensure successful use, special packaging, shipping
11 or other costs to be incurred by the pharmacy for the dispensing process
12 that is greater than the professional dispensing fee paid by the state
13 medical assistance program, participating pharmacies shall be paid a
14 professional dispensing fee for these costs to ensure a participating
15 pharmacy is not paid less than its cost to acquire and dispense medica-
16 tions. A pharmacy benefit manager shall not pay a participating pharmacy
17 below its pharmacy acquisition cost but may require demonstration of
18 such cost through the provision of pharmacy invoices. A pharmacy benefit
19 manager shall, with respect to contracts between a pharmacy benefit
20 manager and a pharmacy or, alternatively, a pharmacy benefit manager and
21 a pharmacy's contracting agent, such as a pharmacy services administra-
22 tive organization, include a reasonable process to appeal, investigate
23 and resolve disputes regarding multi-source generic, brand name, biolog-
24 ic product, and drugs produced through genetic technology or biopharma-
25 ceutical processes drug pricing. The appeals process shall be considered
26 within the existing appeals process under section two hundred eighty-a
27 of the public health law. Provided, however, this paragraph shall not
28 apply to prescriptions, prescription drugs, or payments for prescription
29 drugs, distributed, or paid for in whole or in part, by a trust fund
30 established or maintained under the Labor Management Relations Act (29
31 U.S. Code § 186), pursuant to coverage required by the terms of a
32 collective bargaining agreement between an employer and a labor organ-
33 ization or certified employee organization; or pursuant to a health
34 plan, welfare fund, pharmaceutical plan, or other form of medical or
35 prescription coverage established, adopted, utilized, funded, or agreed
36 upon by an employer and a labor organization or certified employee
37 organization pursuant to a collective bargaining agreement; or, where
38 the plan, coverage, fund, or program has been collectively bargained and
39 pertains to a sponsored multi-employer plan, including but not limited
40 to, plans developed under article five-G of the general municipal law,
41 articles forty-four and forty-seven of the insurance law, or any plans
42 created pursuant to the Internal Revenue Code, Employee Retirement
43 Income Security Act or any applicable federal statute that provides such
44 benefits to employee and retiree groups.
45 § 5. This act shall take effect January 1, 2026 and shall apply to all
46 policies and contracts issued, renewed, modified, altered or amended on
47 and after such date.
