STATE OF NEW YORK
________________________________________________________________________
5877
2021-2022 Regular Sessions
IN ASSEMBLY
March 1, 2021
___________
Introduced by M. of A. JOYNER, COOK, LAVINE, GALEF -- Multi-Sponsored by
-- M. of A. McDONOUGH, SIMON -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the general business law, in relation to mail order
pharmacies
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general business law is amended by adding a new article
2 40 to read as follows:
3 ARTICLE 40
4 MAIL ORDER PHARMACIES
5 Section 900. Legislative findings and declarations; purposes.
6 901. Definitions.
7 902. Prohibited conduct.
8 903. Action to recover damages by an enrollee.
9 904. Violations.
10 905. Enforcement by attorney general.
11 906. Applicability.
12 § 900. Legislative findings and declarations; purposes. 1. The legis-
13 lature finds and declares that:
14 (a) The number of Americans who are prescribed three or more medica-
15 tions is growing at an alarming rate, with approximately ten percent of
16 the population taking five or more prescription medications. These Amer-
17 icans face many challenges when they are required to receive some of
18 their prescriptions from a mail order pharmacy while receiving other
19 prescriptions from a local retail pharmacy. These challenges include
20 the discovery of potential adverse interactions among their prescription
21 drugs, comprehensive counseling, the coordination and timing of the
22 receipt of prescriptions, and the ability to keep information regarding
23 their medical condition or conditions private.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03930-01-1
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1 (b) Americans with multiple prescriptions benefit from the services
2 provided by a local retail pharmacy because such local source will not
3 only be able to determine if there are any harmful or potentially harm-
4 ful drug interactions but can also provide immediate face-to-face,
5 confidential counseling to the patient regarding any and all of his or
6 her prescribed drugs. For patients who are enrolled in a prescription
7 benefit plan, ensuring that the plan's network includes local retail
8 pharmacies has become of great importance. Mandating that certain
9 prescriptions must be filled by a mail order pharmacy is not in the best
10 interest of all prescription benefit plan enrollees and such
11 prescription benefit plan enrollees should be given the choice regarding
12 where a prescription will be filled.
13 (c) Many Americans wish to keep information regarding their
14 prescriptions and health conditions private. Some Americans will choose
15 to disclose information to their family, while others may choose not to
16 disclose any information to any person. Many people know that medication
17 used to treat chronic, complex or rare conditions is dispensed by mail
18 order pharmacies, not local retail pharmacies. As part of their business
19 model, mail order pharmacies engage the services of third-party common
20 carriers to deliver prescriptions. This can lead to inadvertent disclo-
21 sure of and conjecture regarding private information to such common
22 carriers' employees, as well as the recipient's neighbors who may note
23 the regular deliveries of prescription medications to the recipient,
24 especially if the packages are left at the recipient's door.
25 (d) While prescription benefit plans have not foreclosed the possibil-
26 ity for a local network retail pharmacy to dispense specialty medica-
27 tions, many of these plans will not allow a local network retail pharma-
28 cy to dispense such prescriptions unless the pharmacy agrees to
29 additional contractual terms and conditions. Many specialty medications
30 do not require any additional or special services for proper dispensing;
31 they have been deemed to be specialty prescriptions because they are
32 expensive. While these additional terms and conditions make sense when
33 there is no possibility for face-to-face interactions between a pharma-
34 cist and the patient, they present an undue burden to local retail phar-
35 macies seeking to dispense specialty medications.
36 (e) Requiring prescription benefit plan enrollees to remit a higher
37 co-payment or pay the full retail price for a prescription that is
38 dispensed by a network retail pharmacy instead of a network mail order
39 pharmacy is not in the best interest of such enrollees as it effectively
40 forces an enrollee to use only mail order prescription pharmacies by
41 making all alternatives cost prohibitive.
42 (f) Similarly, requiring local network retail pharmacies to accept a
43 lower payment for dispensing specialty prescription drugs is not in the
44 best interest of the prescription benefit plan's enrollees because it
45 may become financially difficult for a network retail pharmacy to remain
46 in the prescription benefit plan's network. The result of this practice
47 is the complete elimination of or a reduction in the number of local
48 network retail pharmacies available to prescription benefit plan enrol-
49 lees.
50 2. The legislature declares that it is the express policy of this
51 state to safeguard the public against inadvertent disclosure of medical
52 conditions, unnecessary complexity in obtaining prescription medications
53 and financial hardship, and to foster and encourage competition and fair
54 dealing in the field of pharmaceutical services by prohibiting
55 prescription benefit plans from requiring that certain prescriptions be
56 filled by a network mail order pharmacy, harmful financial practices,
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1 and other unfair practices that have been conducted by some prescription
2 benefit plans.
3 3. The legislature further finds that prescription benefit plans may
4 have a significant impact upon the economy and well-being of this state
5 and its local communities, and therefore the provisions of this article
6 are necessary to promote the public welfare.
7 4. The intent and purposes of this article are to provide prescription
8 benefit plan enrollees with the ability to choose whether to fill a
9 prescription at a local network retail pharmacy or a network mail order
10 pharmacy without incurring additional costs for choosing to have their
11 prescriptions filled by a local network retail pharmacy; to provide all
12 network retail pharmacies with the ability to contract with prescription
13 benefit plans to dispense prescriptions that have been deemed to be mail
14 order prescriptions by the pharmacy benefit manager without being
15 required to agree to additional contractual terms and conditions that
16 are applicable to mail order pharmacies where there is no face-to-face
17 interaction with prescription benefit plan enrollees, such as a twenty-
18 four hour customer service hotline; and to ensure that local network
19 retail pharmacies are not monetarily penalized for dispensing
20 prescriptions that the pharmacy benefit manager has deemed to be
21 specialty drug prescriptions requiring dispensing by a mail order phar-
22 macy.
23 § 901. Definitions. As used in this article:
24 1. "Mail order pharmacy" shall mean a pharmacy whose primary business
25 is to receive prescriptions by mail, telefax or through electronic
26 submissions and to dispense medication to patients through the use of
27 the United States mail or other common or contract carrier services and
28 provide any consultation with patients electronically rather than face-
29 to-face.
30 2. "Retail pharmacy" shall mean a pharmacy whose primary business is
31 to receive prescriptions directly from patients or through electronic
32 submissions and to dispense medication directly to patients and provide
33 face-to-face consultation with patients. For purposes of this subdivi-
34 sion, the term "patient" shall include a person who is acting on behalf
35 of a patient.
36 3. "Prescription benefit plan" shall mean any benefit plan other than
37 a state public health plan, as defined in subdivision eleven of section
38 two hundred seventy of the public health law, or an employee welfare
39 benefit plan, as defined in subsection one of section one thousand two
40 of the United States code, that provides prescription benefits, a
41 governmental plan, as defined in subsection thirty-two of section one
42 thousand two of the United States code, a church plan, as defined in
43 subsection thirty-three of section one thousand two of the United States
44 code, or a plan is maintained solely for the purpose of complying with
45 applicable workers' compensation laws or unemployment compensation or
46 disability insurance laws, that includes prescription drug benefits to
47 enrollees and their dependents.
48 4. "Specialty prescription drug" shall mean a prescription drug that
49 is used to treat a chronic, complex or rare condition, has been desig-
50 nated in the prescription benefit plan's formulary as a specialty
51 prescription drug, and will only be covered by the prescription benefit
52 plan if it is dispensed by a network mail order pharmacy or an author-
53 ized network retail pharmacy.
54 5. "Network" shall mean a mail order pharmacy or retail pharmacy that
55 participates in a prescription benefit plan.
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1 6. "Mail order prescription" shall mean any prescription drug, includ-
2 ing, but not limited to specialty prescription drugs, that a
3 prescription benefit plan requires be filled by a mail order pharmacy or
4 an authorized network retail pharmacy in order for such dispensed
5 prescription to be covered by such plan.
6 7. "Prescription benefit plan enrollee" or "enrollee" shall mean the
7 person who is enrolled in the prescription benefit plan and his or her
8 spouse and dependent children who are enrolled in the prescription bene-
9 fit plan as dependents of such person.
10 8. "Authorized network retail pharmacy" shall mean a retail pharmacy
11 that, when used by a member to fill a mail order prescription, such
12 prescription will be covered by the member's prescription benefit plan
13 as if such pharmacy was a mail order pharmacy.
14 § 902. Prohibited conduct. 1. Notwithstanding any provision of law to
15 the contrary, it shall be unlawful for a prescription benefit plan to
16 require an enrollee or an enrollee's dependent to obtain any
17 prescription drug from a network mail order pharmacy in order to receive
18 coverage from such plan for such prescription.
19 2. Notwithstanding any provision of law to the contrary, it shall be
20 unlawful for a prescription benefit plan to require that an enrollee or
21 an enrollee's dependent remit a higher co-payment for a prescription
22 when such prescription is dispensed by a network retail pharmacy.
23 3. Notwithstanding any provision of law to the contrary, it shall be
24 unlawful for a prescription benefit plan to require a network retail
25 pharmacy to agree to additional contractual terms and conditions that go
26 beyond the industry standard and are not reasonable and relevant as a
27 condition precedent to allowing such a retail pharmacy to dispense any
28 prescription drug, including mail order prescription drugs, as a network
29 provider.
30 4. Notwithstanding any provision of law to the contrary, it shall be
31 unlawful for a mail order pharmacy to automatically refill a
32 prescription benefit plan enrollee's prescription without obtaining
33 permission for such automatic refills from such enrollee, or in the case
34 of an enrollee's dependent child, the enrollee or child's parent;
35 provided, however, any permission granted for automatic refills shall
36 expire after six months and may be renewed thereafter for intervals not
37 to exceed six months.
38 5. Notwithstanding any provision of law to the contrary, it shall be
39 unlawful for any mail order pharmacy to retain an enrollee's payment
40 information for future use without the consent of the enrollee. For
41 purposes of this subdivision, payment information includes, but is not
42 limited to, credit card information, debit card information, and bank
43 account information.
44 § 903. Action to recover damages by an enrollee. 1. Any person injured
45 by a violation of this article may bring an action for the recovery of
46 damages. Judgment may be entered in favor of such person in an amount
47 not to exceed three times the actual damages or one hundred dollars,
48 whichever is greater. The court may award reasonable attorney's fees to
49 a prevailing plaintiff.
50 2. Nothing in this article shall be construed so as to nullify or
51 impair any right or rights which a prescription benefit plan enrollee or
52 such enrollee's dependent may have against a seller at common law, by
53 statute, or otherwise.
54 § 904. Violations. Any mail order pharmacy or prescription benefit
55 plan, including its employees and agents, that violates any provision of
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1 this article, shall be liable for a civil fine of not more than twenty-
2 five hundred dollars for each violation.
3 § 905. Enforcement by attorney general. In addition to the other reme-
4 dies provided, whenever there shall be a violation of this article,
5 application may be made by the attorney general in the name of the
6 people of the state to a court having jurisdiction to issue an injunc-
7 tion, and upon notice to the respondent of not fewer than five days, to
8 enjoin and restrain the continuance of the violation. If it shall appear
9 to the satisfaction of the court or justice that the defendant has, in
10 fact, violated this article, an injunction may be issued by such court
11 or justice, enjoining and restraining any further violation, without
12 requiring proof that any person has, in fact, been injured or damaged
13 thereby. In any such proceeding, the court may make allowances to the
14 attorney general as provided in paragraph six of subdivision (a) of
15 section eighty-three hundred three of the civil practice law and rules,
16 and direct restitution. Whenever the court shall determine that a
17 violation of this article has occurred, the court may impose a civil
18 penalty of not more than ten thousand dollars for each violation.
19 § 906. Applicability. This article shall not apply to any employee
20 welfare benefit plan, as defined in subsection one of section one thou-
21 sand two of the United States code, that provides prescription benefits,
22 governmental plan, as defined in subsection thirty-two of section one
23 thousand two of the United States code, church plan, as defined in
24 subsection thirty-three of section one thousand two of the United States
25 code, or a plan is maintained solely for the purpose of complying with
26 applicable workers' compensation laws or unemployment compensation or
27 disability insurance laws.
28 § 2. This act shall take effect on the ninetieth day after it shall
29 have become a law and shall apply to contracts entered into, amended or
30 renewed on and after such date.