- Summary
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S06531 Summary:
BILL NO | S06531 |
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SAME AS | SAME AS A02836-A |
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SPONSOR | BRESLIN |
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COSPNSR | RIVERA, MAY, METZGER |
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MLTSPNSR | |
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Rpld & add §280-a, Pub Health L; add Art 29 §§2901 - 2913, amd §2402, Ins L | |
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Provides for pharmacy benefit management and the procurement of prescription drugs to be dispensed to patients, or the administration or management of prescription drug benefits; sets forth definitions; provides for funds received by a pharmacy in trust for the health plan or provider and provides for accountability of such funds; further provides for an appeals process to investigate and resolve disputes regarding multi-source generic drug pricing. |
S06531 Actions:
BILL NO | S06531 | |||||||||||||||||||||||||||||||||||||||||||||||||
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06/14/2019 | REFERRED TO RULES | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2019 | ORDERED TO THIRD READING CAL.1467 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2019 | PASSED SENATE | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2019 | DELIVERED TO ASSEMBLY | |||||||||||||||||||||||||||||||||||||||||||||||||
06/17/2019 | referred to ways and means | |||||||||||||||||||||||||||||||||||||||||||||||||
06/20/2019 | substituted for a2836a | |||||||||||||||||||||||||||||||||||||||||||||||||
06/20/2019 | ordered to third reading rules cal.543 | |||||||||||||||||||||||||||||||||||||||||||||||||
06/20/2019 | passed assembly | |||||||||||||||||||||||||||||||||||||||||||||||||
06/20/2019 | returned to senate | |||||||||||||||||||||||||||||||||||||||||||||||||
12/17/2019 | DELIVERED TO GOVERNOR | |||||||||||||||||||||||||||||||||||||||||||||||||
12/26/2019 | VETOED MEMO.286 |
S06531 Committee Votes:
Go to topS06531 Floor Votes:
Yes
Abbate
Yes
Crespo
ER
Gantt
Yes
LiPetri
Yes
Perry
Yes
Simon
Yes
Abinanti
Yes
Crouch
Yes
Garbarino
Yes
Lupardo
Yes
Pheffer Amato
Yes
Simotas
Yes
Arroyo
Yes
Cruz
Yes
Giglio
Yes
Magnarelli
Yes
Pichardo
Yes
Smith
Yes
Ashby
Yes
Cusick
Yes
Glick
Yes
Malliotakis
Yes
Pretlow
Yes
Smullen
Yes
Aubry
Yes
Cymbrowitz
Yes
Goodell
Yes
Manktelow
Yes
Quart
Yes
Solages
Yes
Barclay
Yes
Davila
Yes
Gottfried
Yes
McDonald
Yes
Ra
Yes
Stec
Yes
Barnwell
Yes
De La Rosa
Yes
Griffin
ER
McDonough
Yes
Raia
Yes
Steck
Yes
Barrett
Yes
DenDekker
Yes
Gunther
Yes
McMahon
Yes
Ramos
Yes
Stern
Yes
Barron
Yes
DeStefano
Yes
Hawley
Yes
Mikulin
Yes
Raynor
Yes
Stirpe
Yes
Benedetto
Yes
Dickens
Yes
Hevesi
Yes
Miller B
Yes
Reilly
Yes
Tague
Yes
Bichotte
Yes
Dilan
Yes
Hunter
Yes
Miller MG
Yes
Reyes
Yes
Taylor
Yes
Blake
Yes
Dinowitz
Yes
Hyndman
Yes
Miller ML
Yes
Richardson
Yes
Thiele
Yes
Blankenbush
Yes
DiPietro
Yes
Jacobson
Yes
Montesano
Yes
Rivera
Yes
Titus
Yes
Brabenec
Yes
D'Urso
Yes
Jaffee
Yes
Morinello
Yes
Rodriguez
Yes
Vanel
Yes
Braunstein
Yes
Eichenstein
Yes
Jean-Pierre
Yes
Mosley
Yes
Romeo
Yes
Walczyk
Yes
Bronson
Yes
Englebright
Yes
Johns
Yes
Niou
Yes
Rosenthal D
Yes
Walker
Yes
Buchwald
Yes
Epstein
Yes
Jones
Yes
Nolan
Yes
Rosenthal L
Yes
Wallace
Yes
Burke
Yes
Fahy
Yes
Joyner
Yes
Norris
Yes
Rozic
Yes
Walsh
Yes
Buttenschon
Yes
Fall
Yes
Kim
Yes
O'Donnell
Yes
Ryan
Yes
Weinstein
Yes
Byrne
Yes
Fernandez
Yes
Kolb
Yes
Ortiz
Yes
Salka
Yes
Weprin
Yes
Byrnes
Yes
Finch
Yes
Lalor
Yes
Otis
Yes
Santabarbara
Yes
Williams
Yes
Cahill
Yes
Fitzpatrick
Yes
Lavine
Yes
Palmesano
Yes
Sayegh
Yes
Woerner
Yes
Carroll
Yes
Friend
Yes
Lawrence
Yes
Palumbo
Yes
Schimminger
Yes
Wright
Yes
Colton
Yes
Frontus
Yes
Lentol
Yes
Paulin
Yes
Schmitt
Yes
Zebrowski
Yes
Cook
Yes
Galef
Yes
Lifton
ER
Peoples-Stokes
Yes
Seawright
Yes
Mr. Speaker
‡ Indicates voting via videoconference
S06531 Text:
Go to top STATE OF NEW YORK ________________________________________________________________________ 6531 2019-2020 Regular Sessions IN SENATE June 14, 2019 ___________ Introduced by Sens. BRESLIN, RIVERA -- 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 pharmacy benefit managers; to amend the insurance law, in relation to registration and licensing of pharmacy benefit managers; and to repeal certain provisions of the public health law relating thereto 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 REPEALED and a 2 new section 280-a is added to read as follows: 3 § 280-a. Pharmacy benefit managers. 1. Definitions. As used in this 4 section, the following terms shall have the following meanings: 5 (a) "Health plan or provider" means an entity for which a pharmacy 6 benefit manager provides pharmacy benefit management including, but not 7 limited to: (i) a health benefit plan or other entity that approves, 8 provides, arranges for, or pays for health care items or services, under 9 which prescription drugs for beneficiaries of the entity are purchased 10 or which provides or arranges reimbursement in whole or in part for the 11 purchase of prescription drugs; or (ii) a health care provider or 12 professional that acquires prescription drugs to use or dispense in 13 providing health care to patients where the prescription drug is the 14 subject of the pharmacy benefit manager's pharmacy benefit management 15 services. 16 (b) "Pharmacy benefit management services" means the service provided 17 to a health plan or provider, directly or through another entity, and 18 regardless of whether the pharmacy benefit manager and the health plan 19 or provider are related, or associated by ownership, common ownership, 20 organization or otherwise; including the procurement of prescription 21 drugs to be dispensed to patients, or the administration or management 22 of prescription drug benefits, including but not limited to, any of the 23 following: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06526-05-9S. 6531 2 1 (i) mail service pharmacy; 2 (ii) claims processing, retail network management, or payment of 3 claims to pharmacies for dispensing prescription drugs; 4 (iii) clinical or other formulary or preferred drug list development 5 or management; 6 (iv) negotiation or administration of rebates, discounts, payment 7 differentials, or other incentives, for the inclusion of particular 8 prescription drugs in a particular category or to promote the purchase 9 of particular prescription drugs; 10 (v) patient compliance, therapeutic intervention, or generic substi- 11 tution programs; 12 (vi) disease management; 13 (vii) drug utilization review or prior authorization; 14 (viii) adjudication of appeals or grievances related to prescription 15 drug coverage; 16 (ix) contracting with network pharmacies; and 17 (x) controlling the cost of covered prescription drugs. 18 (c) "Pharmacy benefit manager" means any entity that performs pharmacy 19 benefit management services for a health plan or provider. 20 (d) "Maximum allowable cost price" means a maximum reimbursement 21 amount set by the pharmacy benefit manager for therapeutically equiv- 22 alent multiple source generic drugs. 23 (e) "Controlling person" means any person or other entity who or which 24 directly or indirectly has the power to direct or cause to be directed 25 the management, control or activities of a pharmacy benefit manager. 26 (f) "Covered individual" means a member, participant, enrollee, 27 contract holder or policy holder or beneficiary of a health plan or 28 provider. 29 (g) "License" means a license to be a pharmacy benefit manager, under 30 article twenty-nine of the insurance law. 31 (h) "Spread pricing" means the practice of a pharmacy benefit manager 32 retaining an additional amount of money in addition to the amount paid 33 to the pharmacy to fill a prescription. 34 2. Duty, accountability and transparency. (a) The pharmacy benefit 35 manager shall have a duty and obligation to the covered individual and 36 the health plan or provider, and shall perform pharmacy benefit manage- 37 ment services with care, skill, prudence, diligence, and professional- 38 ism, and for the best interests primarily of the covered individual, and 39 the health plan or provider. 40 (b) All funds received by the pharmacy benefit manager in relation to 41 providing pharmacy benefit management services shall be received by the 42 pharmacy benefit manager in trust for the health plan or provider and 43 shall be used or distributed only pursuant to the pharmacy benefit 44 manager's contract with the health plan or provider or applicable law; 45 including any administrative fee or payment expressly provided for in 46 the contract between the pharmacy benefit manager and the health plan or 47 provider to compensate the pharmacy benefit manager for its services. 48 Any funds received by the pharmacy benefit manager through spread pric- 49 ing shall be subject to this paragraph. 50 (c) The pharmacy benefit manager shall periodically account to the 51 health plan or provider for any pricing discounts, rebates of any kind, 52 inflationary payments, credits, clawbacks, fees, grants, chargebacks, 53 reimbursements, or other benefits received by the pharmacy benefit 54 manager. The pharmacy benefit manager shall ensure that any portion of 55 such income, payments, and financial benefits is passed through to the 56 health plan or provider in full to reduce the reportable ingredientS. 6531 3 1 cost. The health plan or provider shall have access to all financial and 2 utilization information of the pharmacy benefit manager in relation to 3 pharmacy benefit management services provided to the health plan or 4 provider. 5 (d) The pharmacy benefit manager shall disclose in writing to the 6 health plan or provider the terms and conditions of any contract or 7 arrangement between the pharmacy benefit manager and any party relating 8 to pharmacy benefit management services provided to the health plan or 9 provider including but not limited to, dispensing fees paid to the phar- 10 macies. 11 (e) The pharmacy benefit manager shall disclose in writing to the 12 health plan or provider any activity, policy, practice, contract or 13 arrangement of the pharmacy benefit manager that directly or indirectly 14 presents any conflict of interest with the pharmacy benefit manager's 15 relationship with or obligation to the health plan or provider. 16 (f) Any information required to be disclosed by a pharmacy benefit 17 manager to a health plan or provider under this section that is reason- 18 ably designated by the pharmacy benefit manager as proprietary or trade 19 secret information shall be kept confidential by the health plan or 20 provider, except as required or permitted by law, including disclosure 21 necessary to prosecute or defend any legitimate legal claim or cause of 22 action. 23 (g) The commissioner shall establish, by regulation, minimum standards 24 for pharmacy benefit management services which shall address the elimi- 25 nation of conflicts of interest between pharmacy benefit managers and 26 health benefit plans and health care providers; and the elimination of 27 deceptive practices, anti-competitive practices, and unfair claims prac- 28 tices. 29 (h) A health care provider and a covered individual shall be deemed to 30 be third-party beneficiaries of the duties, obligations and requirements 31 applicable to the pharmacy benefit manager under this section and shall 32 be entitled to legal or equitable relief for any injury or loss to the 33 health care provider or the covered individual caused by any violation 34 of such duties, obligations or requirements. 35 3. Prescriptions. A pharmacy benefit manager may not substitute or 36 cause the substituting of one prescription drug for another in dispens- 37 ing a prescription, or alter or cause the altering of the terms of a 38 prescription, except with the approval of the prescriber or as explicit- 39 ly required or permitted by law. 40 4. Appeals. A pharmacy benefit manager shall, with respect to 41 contracts between a pharmacy benefit manager and a pharmacy or, alterna- 42 tively, a pharmacy benefit manager and a pharmacy's contracting agent, 43 such as a pharmacy services administrative organization, include a 44 reasonable process to appeal, investigate and resolve disputes regarding 45 multi-source generic drug pricing. The appeals process shall include the 46 following provisions: 47 (a) the right to appeal by the pharmacy and/or the pharmacy's 48 contracting agent shall be limited to thirty days following the initial 49 claim submitted for payment; 50 (b) a telephone number through which a network pharmacy may contact 51 the pharmacy benefit manager for the purpose of filing an appeal and an 52 electronic mail address of the individual who is responsible for proc- 53 essing appeals; 54 (c) the pharmacy benefit manager shall send an electronic mail message 55 acknowledging receipt of the appeal. The pharmacy benefit manager shall 56 respond in an electronic message to the pharmacy and/or the pharmacy'sS. 6531 4 1 contracting agent filing the appeal within seven business days indicat- 2 ing its determination. If the appeal is determined to be valid, the 3 maximum allowable cost for the drug shall be adjusted for the appealing 4 pharmacy effective as of the date of the original claim for payment. The 5 pharmacy benefit manager shall require the appealing pharmacy to reverse 6 and rebill the claim in question in order to obtain the corrected 7 reimbursement; 8 (d) if an update to the maximum allowable cost is warranted, the phar- 9 macy benefit manager or covered entity shall adjust the maximum allow- 10 able cost of the drug effective for all similarly situated pharmacies in 11 its network in the state on the date the appeal was determined to be 12 valid; and 13 (e) if an appeal is denied, the pharmacy benefit manager shall identi- 14 fy the national drug code of a therapeutically equivalent drug, as 15 determined by the federal Food and Drug Administration, that is avail- 16 able for purchase by pharmacies in this state from wholesalers regis- 17 tered pursuant to subdivision four of section sixty-eight hundred eight 18 of the education law at a price which is equal to or less than the maxi- 19 mum allowable cost for that drug as determined by the pharmacy benefit 20 manager. 21 5. Contract provisions. No pharmacy benefit manager shall, with 22 respect to contracts between such pharmacy benefit manager and a pharma- 23 cy or, alternatively, such pharmacy benefit manager and a pharmacy's 24 contracting agent, such as a pharmacy services administrative organiza- 25 tion: 26 (a) prohibit or penalize a pharmacist or pharmacy from disclosing to 27 an individual purchasing a prescription medication information regard- 28 ing: 29 (1) the cost of the prescription medication to the individual, or 30 (2) the availability of any therapeutically equivalent alternative 31 medications or alternative methods of purchasing the prescription medi- 32 cation, including but not limited to, paying a cash price; 33 (b) charge or collect from an individual a copayment that exceeds the 34 total submitted charges by the pharmacy for which the pharmacy is paid. 35 If an individual pays a copayment, the pharmacy shall retain the adjudi- 36 cated costs and the pharmacy benefit manager shall not redact or recoup 37 the adjudicated cost; or 38 (c) require a pharmacy to meet any pharmacy accreditation standard or 39 recertification requirement inconsistent with, more stringent than, or 40 in addition to federal and state requirements for licensure as a pharma- 41 cy. 42 § 2. The insurance law is amended by adding a new article 29 to read 43 as follows: 44 ARTICLE 29 45 PHARMACY BENEFIT MANAGERS 46 Section 2901. Definitions. 47 2902. Acting without a registration. 48 2903. Registration requirements for pharmacy benefit managers. 49 2904. Reporting requirements for pharmacy benefit managers. 50 2905. Acting without a license. 51 2906. Licensing of a pharmacy benefit manager. 52 2907. Revocation or suspension of a registration or license of a 53 pharmacy benefit manager. 54 2908. Penalties for violations. 55 2909. Stay or suspension of superintendent's determination. 56 2910. Revoked registrations or licenses.S. 6531 5 1 2911. Change of address. 2 2912. Applicability of other laws. 3 2913. Assessments. 4 § 2901. Definitions. For purposes of this article: 5 (a) "Controlling person" is any person or other entity who or which 6 directly or indirectly has the power to direct or cause to be directed 7 the management, control or activities of a pharmacy benefit manager. 8 (b) The terms "health plan or provider", "pharmacy benefit manager" 9 and "pharmacy benefit management services" have the same meanings as 10 defined by section two hundred eighty-a of the public health law. 11 § 2902. Acting without a registration. (a) No person, firm, associ- 12 ation, corporation or other entity may act as a pharmacy benefit manager 13 on or after April first, two thousand twenty and prior to January first, 14 two thousand twenty-one, without having a valid registration as a phar- 15 macy benefit manager filed with the superintendent in accordance with 16 this article and any regulations promulgated thereunder. 17 (b) Any person, firm, association, corporation or other entity that 18 violates this section shall, in addition to any other penalty provided 19 by law, be liable for restitution to any health plan or provider or 20 covered individual harmed by the violation and shall also be subject to 21 a penalty not exceeding of the greater of (1) one thousand dollars for 22 the first violation and two thousand five hundred dollars for each 23 subsequent violation or (2) the aggregate economic gross receipts 24 attributable to all violations. 25 § 2903. Registration requirements for pharmacy benefit managers. (a) 26 Every pharmacy benefit manager that performs pharmacy benefit management 27 services on or after April first, two thousand twenty and prior to Janu- 28 ary first, two thousand twenty-one shall register with the superinten- 29 dent in a manner acceptable to the superintendent, and shall pay a fee 30 of one thousand dollars for each year or fraction of a year in which the 31 registration shall be valid. The superintendent, in consultation with 32 the commissioner of health, may establish, by regulation, minimum regis- 33 tration standards required for a pharmacy benefit manager. The super- 34 intendent can reject a registration application filed by a pharmacy 35 benefit manager that fails to comply with the minimum registration stan- 36 dards. 37 (b) For each business entity, the officer or officers and director or 38 directors named in the application shall be designated responsible for 39 the business entity's compliance with the financial services and insur- 40 ance laws, rules and regulations of this state. 41 (c) Every registration will expire on December thirty-first, two thou- 42 sand twenty regardless of when registration was first made. 43 (d) Every pharmacy benefit manager that performs pharmacy benefit 44 management services at any time prior to April first, two thousand twen- 45 ty, shall make the registration and fee payment required by subsection 46 (a) of this section on or before April first, two thousand twenty. Any 47 other pharmacy benefit manager shall make the registration and fee 48 payment required by subsection (a) of this section prior to performing 49 pharmacy benefit management services. 50 (e) Registrants under this section shall be subject to examination by 51 the superintendent as often as the superintendent may deem it necessary. 52 The superintendent may promulgate regulations establishing methods and 53 procedures for facilitating and verifying compliance with the require- 54 ments of this article and such other regulations as necessary to enforce 55 the provisions of this article.S. 6531 6 1 § 2904. Reporting requirements for pharmacy benefit managers. (a)(1) 2 On or before July first of each year, beginning in two thousand twenty, 3 every pharmacy benefit manager shall report to the superintendent, in a 4 statement subscribed and affirmed as true under penalties of perjury, 5 the information requested by the superintendent including, without limi- 6 tation, 7 (i) any pricing discounts, rebates of any kind, inflationary payments, 8 credits, clawbacks, fees, grants, chargebacks, reimbursements, other 9 financial or other reimbursements, incentives, inducements, refunds or 10 other benefits received by the pharmacy benefit manager; and 11 (ii) the terms and conditions of any contract or arrangement, includ- 12 ing other financial or other reimbursements incentives, inducements or 13 refunds between the pharmacy benefit manager and any other party relat- 14 ing to pharmacy benefit management services provided to a health plan or 15 provider including but not limited to, dispensing fees paid to pharma- 16 cies. 17 The superintendent may require the filing of quarterly or other state- 18 ments, which shall be in such form and shall contain such matters as the 19 superintendent shall prescribe. 20 (2) The superintendent may address to any pharmacy benefit manager or 21 its officers any inquiry in relation to its provision of pharmacy bene- 22 fit management services or any matter connected therewith. Every phar- 23 macy benefit manager or person so addressed shall reply in writing to 24 such inquiry promptly and truthfully, and such reply shall be, if 25 required by the superintendent, subscribed by such individual, or by 26 such officer or officers of the pharmacy benefit manager, as the super- 27 intendent shall designate, and affirmed by them as true under the penal- 28 ties of perjury. 29 (b) In the event any pharmacy benefit manager or person does not 30 submit the report required by paragraph one of subsection (a) of this 31 section or does not provide a good faith response to an inquiry from the 32 superintendent pursuant to paragraph two of subsection (a) of this 33 section within a time period specified by the superintendent of not less 34 than fifteen business days, the superintendent is authorized to levy a 35 civil penalty, after notice and hearing, against such pharmacy benefit 36 manager or person not to exceed one thousand dollars per day for each 37 day beyond the date the report is due or the date specified by the 38 superintendent for response to the inquiry. 39 (c) All information disclosed by a pharmacy benefit manager under this 40 section shall be deemed confidential and not subject to public disclo- 41 sure except by court order. 42 § 2905. Acting without a license. (a) No person, firm, association, 43 corporation or other entity may act as a pharmacy benefit manager on or 44 after January first, two thousand twenty-one without having authority to 45 do so by virtue of a license issued in force pursuant to the provisions 46 of this article. 47 (b) Any person, firm, association, corporation or other entity that 48 violates this section shall, in addition to any other penalty provided 49 by law, be subject to a penalty not exceeding the greater of (1) one 50 thousand dollars for the first violation and two thousand five hundred 51 dollars for each subsequent violation or (2) the aggregate economic 52 gross receipts attributable to all violations. 53 § 2906. Licensing of a pharmacy benefit manager. (a) The superinten- 54 dent may issue a pharmacy benefit manager's license to any person, firm, 55 association or corporation who or that has complied with the require- 56 ments of this article, including regulations promulgated by the super-S. 6531 7 1 intendent. The superintendent, in consultation with the commissioner of 2 health, may establish, by regulation, minimum standards for the issuance 3 of a license to a pharmacy benefit manager. 4 (b) The minimum standards established under this subsection may 5 address, without limitation: 6 (1) conflicts of interest between pharmacy benefit managers and health 7 plans or insurers; 8 (2) deceptive practices in connection with the performance of pharmacy 9 benefit management services; 10 (3) anti-competitive practices in connection with the performance of 11 pharmacy benefit management services; 12 (4) unfair claims practices in connection with the performance of 13 pharmacy benefit management services; and 14 (5) protection of consumers. 15 (c)(1) Any such license issued to a firm or association shall author- 16 ize all of the members of the firm or association and any designated 17 employees to act as pharmacy benefit managers under the license, and all 18 such persons shall be named in the application and supplements thereto. 19 (2) Any such license issued to a corporation shall authorize all of 20 the officers and any designated employees and directors thereof to act 21 as pharmacy benefit managers on behalf of such corporation, and all such 22 persons shall be named in the application and supplements thereto. 23 (3) For each business entity, the officer or officers and director or 24 directors named in the application shall be designated responsible for 25 the business entity's compliance with the insurance laws, rules and 26 regulations of this state. 27 (d)(1) Before a pharmacy benefit manager's license shall be issued or 28 renewed, the prospective licensee shall properly file in the office of 29 the superintendent a written application therefor in such form or forms 30 and supplements thereto as the superintendent prescribes, and pay a fee 31 of two thousand dollars for each year or fraction of a year in which a 32 license shall be valid. 33 (2) Every pharmacy benefit manager's license shall expire thirty-six 34 months after the date of issue. Every license issued pursuant to this 35 section may be renewed for the ensuing period of thirty-six months upon 36 the filing of an application in conformity with this subsection. 37 (e)(1) If an application for a renewal license shall have been filed 38 with the superintendent before November first of the year of expiration, 39 then the license sought to be renewed shall continue in full force and 40 effect either until the issuance by the superintendent of the renewal 41 license applied for or until five days after the superintendent shall 42 have refused to issue such renewal license and given notice of such 43 refusal to the applicant. 44 (2) Before refusing to renew any license pursuant to this section for 45 which a renewal application has been filed pursuant to paragraph one of 46 this subsection, the superintendent shall notify the applicant of the 47 superintendent's intention to do so and shall give such applicant a 48 hearing. 49 (f) The superintendent may refuse to issue a pharmacy benefit manag- 50 er's license if, in the superintendent's judgment, the applicant or any 51 member, principal, officer or director of the applicant, is not trust- 52 worthy and competent to act as or in connection with a pharmacy benefit 53 manager, or that any of the foregoing has given cause for revocation or 54 suspension of such license, or has failed to comply with any prerequi- 55 site for the issuance of such license.S. 6531 8 1 (g) Licensees and applicants for a license under this section shall be 2 subject to examination by the superintendent as often as the superinten- 3 dent may deem it expedient. The superintendent may promulgate regu- 4 lations establishing methods and procedures for facilitating and verify- 5 ing compliance with the requirements of this section and such other 6 regulations as necessary. 7 (h) The superintendent may issue a replacement for a currently 8 in-force license that has been lost or destroyed. Before the replacement 9 license shall be issued, there shall be on file in the office of the 10 superintendent a written application for the replacement license, 11 affirming under penalty of perjury that the original license has been 12 lost or destroyed, together with a fee of two hundred dollars. 13 (i) No pharmacy benefit manager shall engage in any practice or action 14 that a health plan or provider is prohibited from engaging in pursuant 15 to this chapter. 16 § 2907. Revocation or suspension of a registration or license of a 17 pharmacy benefit manager. (a) The superintendent may refuse to renew, 18 may revoke, or may suspend for a period the superintendent determines 19 the registration or license of any pharmacy benefit manager if, after 20 notice and hearing, the superintendent determines that the registrant or 21 licensee or any member, principal, officer, director, or controlling 22 person of the registrant or licensee, has: 23 (1) violated any insurance laws, section two hundred eighty-a of the 24 public health law or violated any regulation, subpoena or order of the 25 superintendent or of another state's insurance commissioner, or has 26 violated any law in the course of his or her dealings in such capacity 27 after such license has been issued or renewed pursuant to section two 28 thousand nine hundred six of this article; 29 (2) provided materially incorrect, materially misleading, materially 30 incomplete or materially untrue information in the registration or 31 license application; 32 (3) obtained or attempted to obtain a registration or license through 33 misrepresentation or fraud; 34 (4)(A) used fraudulent, coercive or dishonest practices; 35 (B) demonstrated incompetence; 36 (C) demonstrated untrustworthiness; or 37 (D) demonstrated financial irresponsibility in the conduct of business 38 in this state or elsewhere; 39 (5) improperly withheld, misappropriated or converted any monies or 40 properties received in the course of business in this state or else- 41 where; 42 (6) intentionally misrepresented the terms of an actual or proposed 43 insurance contract; 44 (7) admitted or been found to have committed any insurance unfair 45 trade practice or fraud; 46 (8) had a pharmacy benefit manager registration or license, or its 47 equivalent, denied, suspended or revoked in any other state, province, 48 district or territory; 49 (9) failed to pay state income tax or comply with any administrative 50 or court order directing payment of state income tax; or 51 (10) ceased to meet the requirements for registration or licensure 52 under this article. 53 (b) Before revoking or suspending the registration or license of any 54 pharmacy benefit manager pursuant to the provisions of this article, the 55 superintendent shall give notice to the registrant or licensee and toS. 6531 9 1 every sub-licensee and shall hold, or cause to be held, a hearing not 2 less than ten days after the giving of such notice. 3 (c) If a registration or license pursuant to the provisions of this 4 article is revoked or suspended by the superintendent, then the super- 5 intendent shall forthwith give notice to the registrant or licensee. 6 (d) The revocation or suspension of any registration or license pursu- 7 ant to the provisions of this article shall terminate forthwith such 8 registration or license and the authority conferred thereby upon all 9 sub-licensees. For good cause shown, the superintendent may delay the 10 effective date of a revocation or suspension to permit the registrant or 11 licensee to satisfy some or all of its contractual obligations to 12 perform pharmacy benefit management services in the state. 13 (e)(1) No individual, corporation, firm or association whose registra- 14 tion or license as a pharmacy benefit manager has been revoked pursuant 15 to subsection (a) of this section, and no firm or association of which 16 such individual is a member, and no corporation of which such individual 17 is an officer or director, and no controlling person of the registrant 18 or licensee shall be entitled to obtain any registration or license 19 under the provisions of this article for a minimum period of one year 20 after such revocation, or, if such revocation be judicially reviewed, 21 for a minimum period of one year after the final determination thereof 22 affirming the action of the superintendent in revoking such license. 23 (2) If any such registration or license held by a firm, association or 24 corporation be revoked, no member of such firm or association and no 25 officer or director of such corporation or any controlling person of the 26 registrant or licensee shall be entitled to obtain any registration or 27 license, or to be named as a sub-licensee in any such license, under 28 this article for the same period of time, unless the superintendent 29 determines, after notice and hearing, that such member, officer or 30 director was not personally at fault in the matter on account of which 31 such registration or license was revoked. 32 (f) If any corporation, firm, association or person aggrieved shall 33 file with the superintendent a verified complaint setting forth facts 34 tending to show sufficient ground for the revocation or suspension of 35 any pharmacy benefit manager's registration or license, then the super- 36 intendent shall, after notice and a hearing, determine whether such 37 registration or license shall be suspended or revoked. 38 (g) The superintendent shall retain the authority to enforce the 39 provisions of and impose any penalty or remedy authorized by this chap- 40 ter against any person or entity who is under investigation for or 41 charged with a violation of this chapter, even if the person's or enti- 42 ty's registration or license has been surrendered, or has expired or has 43 lapsed by operation of law. 44 (h) A registrant or licensee subject to this article shall report to 45 the superintendent any administrative action taken against the regis- 46 trant or licensee in another jurisdiction or by another governmental 47 agency in this state within thirty days of the final disposition of the 48 matter. This report shall include a copy of the order, consent to order 49 or other relevant legal documents. 50 (i) Within thirty days of the initial pretrial hearing date, a regis- 51 trant or licensee subject to this article shall report to the super- 52 intendent any criminal prosecution of the registrant or licensee taken 53 in any jurisdiction. The report shall include a copy of the initial 54 complaint filed, the order resulting from the hearing and any other 55 relevant legal documents.S. 6531 10 1 § 2908. Penalties for violations. (a) The superintendent, in lieu of 2 revoking or suspending the registration or license of a registrant or 3 licensee in accordance with the provisions of this article, may in any 4 one proceeding by order, require the registrant or licensee to pay to 5 the people of this state a penalty in a sum not exceeding the greater of 6 (1) one thousand dollars for each offense and two thousand five hundred 7 dollars for each subsequent violation or (2) the aggregate gross 8 receipts attributable to all offenses. 9 (b) Upon the failure of such a registrant or licensee to pay the 10 penalty ordered pursuant to subsection (a) of this section within twenty 11 days after the mailing of the order, postage prepaid, registered, and 12 addressed to the last known place of business of the licensee, unless 13 the order is stayed by an order of a court of competent jurisdiction, 14 the superintendent may revoke the registration or license of the regis- 15 trant or licensee or may suspend the same for such period as the super- 16 intendent determines. 17 § 2909. Stay or suspension of superintendent's determination. The 18 commencement of a proceeding under article seventy-eight of the civil 19 practice law and rules, to review the action of the superintendent in 20 suspending or revoking or refusing to renew any certificate under this 21 article, shall stay such action of the superintendent for a period of 22 thirty days. Such stay shall not be extended for a longer period unless 23 the court shall determine, after a preliminary hearing of which the 24 superintendent is notified forty-eight hours in advance, that a stay of 25 the superintendent's action pending the final determination or further 26 order of the court will not unduly injure the interests of the people of 27 the state. 28 § 2910. Revoked registrations or licenses. (a)(1) No person, firm, 29 association, corporation or other entity subject to the provisions of 30 this article whose registration or license under this article has been 31 revoked, or whose registration or license to engage in the business of 32 pharmacy benefit management in any capacity has been revoked by any 33 other state or territory of the United States shall become employed or 34 appointed by a pharmacy benefit manager as an officer, director, manag- 35 er, controlling person or for other services, without the prior written 36 approval of the superintendent, unless such services are for maintenance 37 or are clerical or ministerial in nature. 38 (2) No person, firm, association, corporation or other entity subject 39 to the provisions of this article shall knowingly employ or appoint any 40 person or entity whose registration or license issued under this article 41 has been revoked, or whose registration or license to engage in the 42 business of pharmacy benefit management in any capacity has been revoked 43 by any other state or territory of the United States, as an officer, 44 director, manager, controlling person or for other services, without the 45 prior written approval of the superintendent, unless such services are 46 for maintenance or are clerical or ministerial in nature. 47 (3) No corporation or partnership subject to the provisions of this 48 article shall knowingly permit any person whose registration or license 49 issued under this article has been revoked, or whose registration or 50 license to engage in the business of pharmacy benefit management in any 51 capacity has been revoked by any other state, or territory of the United 52 States, to be a shareholder or have an interest in such corporation or 53 partnership, nor shall any such person become a shareholder or partner 54 in such corporation or partnership, without the prior written approval 55 of the superintendent.S. 6531 11 1 (b) The superintendent may approve the employment, appointment or 2 participation of any such person whose registration or license has been 3 revoked: 4 (1) if the superintendent determines that the duties and responsibil- 5 ities of such person are subject to appropriate supervision and that 6 such duties and responsibilities will not have an adverse effect upon 7 the public, other registrants or licensees, or the registrant or licen- 8 see proposing employment or appointment of such person; or 9 (2) if such person has filed an application for reregistration or 10 relicensing pursuant to this article and the application for reregistra- 11 tion or relicensing has not been approved or denied within one hundred 12 twenty days following the filing thereof, unless the superintendent 13 determines within the said time that employment or appointment of such 14 person by a registrant or licensee in the conduct of a pharmacy benefit 15 management business would not be in the public interest. 16 (c) The provisions of this section shall not apply to the ownership of 17 shares of any corporation registered or licensed pursuant to this arti- 18 cle if the shares of such corporation are publicly held and traded in 19 the over-the-counter market or upon any national or regional securities 20 exchange. 21 § 2911. Change of address. A registrant or licensee under this article 22 shall inform the superintendent by a means acceptable to the superinten- 23 dent of a change of address within thirty days of the change. 24 § 2912. Applicability of other laws. Nothing in this article shall be 25 construed to exempt a pharmacy benefit manager from complying with the 26 provisions of articles twenty-one and forty-nine of this chapter and 27 articles forty-four and forty-nine and section two hundred eighty-a of 28 the public health law, section three hundred sixty-four-j of the social 29 services law, or any other provision of this chapter or the financial 30 services law. 31 § 2913. Assessments. Pharmacy benefit managers that file a registra- 32 tion with the department or are licensed by the department shall be 33 assessed by the superintendent for the operating expenses of the depart- 34 ment that are solely attributable to regulating such pharmacy benefit 35 managers in such proportions as the superintendent shall deem just and 36 reasonable. 37 § 3. Subsection (b) of section 2402 of the insurance law, as amended 38 by section 71 of part A of chapter 62 of the laws of 2011, is amended to 39 read as follows: 40 (b) "Defined violation" means the commission by a person of an act 41 prohibited by: subsection (a) of section one thousand one hundred two, 42 section one thousand two hundred fourteen, one thousand two hundred 43 seventeen, one thousand two hundred twenty, one thousand three hundred 44 thirteen, subparagraph (B) of paragraph two of subsection (i) of section 45 one thousand three hundred twenty-two, subparagraph (B) of paragraph two 46 of subsection (i) of section one thousand three hundred twenty-four, two 47 thousand one hundred two, two thousand one hundred seventeen, two thou- 48 sand one hundred twenty-two, two thousand one hundred twenty-three, 49 subsection (p) of section two thousand three hundred thirteen, section 50 two thousand three hundred twenty-four, two thousand five hundred two, 51 two thousand five hundred three, two thousand five hundred four, two 52 thousand six hundred one, two thousand six hundred two, two thousand six 53 hundred three, two thousand six hundred four, two thousand six hundred 54 six, two thousand seven hundred three, two thousand nine hundred two, 55 two thousand nine hundred five, three thousand one hundred nine, three 56 thousand two hundred twenty-four-a, three thousand four hundred twenty-S. 6531 12 1 nine, three thousand four hundred thirty-three, paragraph seven of 2 subsection (e) of section three thousand four hundred twenty-six, four 3 thousand two hundred twenty-four, four thousand two hundred twenty-five, 4 four thousand two hundred twenty-six, seven thousand eight hundred nine, 5 seven thousand eight hundred ten, seven thousand eight hundred eleven, 6 seven thousand eight hundred thirteen, seven thousand eight hundred 7 fourteen and seven thousand eight hundred fifteen of this chapter; or 8 section 135.60, 135.65, 175.05, 175.45, or 190.20, or article one 9 hundred five of the penal law. 10 § 4. Severability. If any provision of this act, or any application 11 of any provision of this act, is held to be invalid, or ruled by any 12 federal agency to violate or be inconsistent with any applicable federal 13 law or regulation, that shall not affect the validity or effectiveness 14 of any other provision of this act, or of any other application of any 15 provision of this act. 16 § 5. This act shall take effect on the ninetieth day after it shall 17 become a law and shall apply to any contract for providing pharmacy 18 benefit management made or renewed on or after that date. Effective 19 immediately, the commissioner of health shall make regulations and take 20 other actions reasonably necessary to implement this act on that date.