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S06297 Summary:

Add 3114, Ins L
Relates to reducing pharmacy benefit manager costs; defines "pharmacy benefit manager".
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S06297 Actions:

06/17/2019referred to insurance
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S06297 Text:

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                    IN SENATE
                                      June 3, 2019
        Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules
        AN ACT to amend the insurance law,  in  relation  to  reducing  pharmacy
          benefit manager costs
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The insurance law is amended by adding a new  section  3114
     2  to read as follows:
     3    §  3114.  Pharmacy  benefit  management  services. (a) Any contract or
     4  other arrangement entered into  by  a  health  insurer  offering  health
     5  insurance  under  article  thirty-two or forty-three of this chapter for
     6  the provision and administration of pharmacy benefit management services
     7  shall be based on a pass-through pricing model and include the following
     8  requirements:
     9    (1) Payment to the  pharmacy  benefit  manager  for  pharmacy  benefit
    10  management  services  shall  be  limited to the actual ingredient costs,
    11  dispensing fees paid to  pharmacies,  and  an  administrative  fee  that
    12  covers the cost of providing pharmacy benefit management services pursu-
    13  ant  to  a  contract  described  in  this subsection. The department may
    14  establish a maximum administrative fee;
    15    (2) The pharmacy  benefit  manager  shall  identify  all  sources  and
    16  amounts  of  income,  payments,  and  financial benefits to the pharmacy
    17  benefit manager related to the provision and administration of  pharmacy
    18  benefit  management  services on behalf of the health care plan, includ-
    19  ing, but not limited to, any pricing discounts,  rebates  of  any  kind,
    20  inflationary  payments,  credits,  clawbacks, fees, grants, chargebacks,
    21  reimbursements, or other benefits and shall ensure that any  portion  of
    22  such  income,  payments, and financial benefits is passed through to the
    23  health care plan in full to reduce the reportable ingredient cost;
    24    (3) The pharmacy benefit manager shall fully disclose to  the  depart-
    25  ment  and to the health care plan the sources and amounts of all income,
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 6297                             2
     1  payments, and financial benefits referred to in paragraph  two  of  this
     2  subsection received by the pharmacy benefit manager;
     3    (4)  The  pharmacy benefit manager shall identify all ingredient costs
     4  and dispensing fees or similar payments made  by  the  pharmacy  benefit
     5  manager  to  any  pharmacy  in  connection  with  the  contract or other
     6  arrangement;
     7    (5) The pharmacy benefit manager shall not utilize any form of  spread
     8  pricing in any contract or other arrangement with health care plans. For
     9  purposes of this subsection "spread pricing" means any amount charged or
    10  claimed  by the pharmacy benefit manager in excess of the amount paid to
    11  pharmacies on behalf of the health care plan less an administrative  fee
    12  as  described in this subsection. Any such excess amount shall be remit-
    13  ted to the health care plan on a quarterly basis;
    14    (6) Pharmacy benefit managers  shall  make  their  payment  model  for
    15  administrative fees available to the health care plan and to the depart-
    16  ment.    The  health  care plan shall, if so directed by the department,
    17  make changes to the payment model and resubmit an  amended  contract  or
    18  contracts to the department for review and approval.
    19    (b)  Any  changes  to  premiums resulting from such contracts shall be
    20  subject to the approval of the department.
    21    (c) For the purposes of  this  section,  the  term  "pharmacy  benefit
    22  manager"  means  an  entity  that  contracts with pharmacies or pharmacy
    23  contracting agents on behalf of a health plan,  state  agency,  insurer,
    24  managed care organization, or other third-party payor to provide pharma-
    25  cy health benefit services or administration.
    26    § 2. This act shall take effect immediately.
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