NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6546
SPONSOR: Steck TITLE OF BILL:
An act to amend the education law, in relation to prohibiting the owner-
ship, operation or control of pharmacies by pharmacy benefit managers
SUMMARY OF PROVISIONS::
Prohibitions. a. No person, firm, corporation or association shall both
directly or indirectly own, operate, control, or direct the operation of
the whole or any pert of a pharmacy and directly or indirectly 6 own,
operate or control the whole or any part of a pharmacy benefit 7 manag-
er.
PURPOSE AND JUSTIFICATION::
A study published by the UC Berkeley School of Public Health and USC in
2024 found that between 2010 and 2021, about 1 in 3 pharmacies have
closed in the United States despite many states, including New York,
expanding the scope of pharmacy services beyond dispensing medication.
Researchers cite the FTC finding that the key factor contributing to the
high volume of closure of independent pharmacies is their exclusion from
preferred pharmacy networks.
Pharmacy Benefit Managers (PBMs) control prescription drug benefits for
insurance companies and employers. Because of this, they can direct
patients to their own pharmacies, making them the "preferred option."
The majority of the pharmacies PBMs direct patients to are large retail
chains that can offer lower co-pays, discounts, and rewards programs
that small pharmacies often cannot offer.1
To keep small pharmacies competitive, this legislation will prohibit all
PBMs operating in New York State from owning, operating, controlling, or
directing a pharmacy. By prohibiting PBMs from owning pharmacies, small
pharmacies would benefit from more competition with larger pharmacies
and transparent reimbursement rates. Patients would also benefit from
lower prescription drug prices since pharmacies would no longer need to
inflate prices to cover PBM fees and clawbacks.
This legislation mirrors bipartiSan federal legislation introduced by
Senators Elizabeth Warren (D-MA) and Josh Hawley (R-MO)2
EXISTING LAW::
None.
PRIOR LEGISLATIVE HISTORY::
New legislation.
FISCAL IMPLICATIONS::
None to the state
EFFECTIVE DATE::
This act will take effect immediately
1 https://pubtichealth.berketey.edu/news-media/
research-hightights/nearty-1-in-3-retait- pharrnacies-haveclosed-since-
2010
2 https://www.warren.senate.gov/imo/media/
doc/patlents_before_monopolies_pbm_act_-__final_bill_text.pdf
