Last week, Governor Hochul signed A1396/S3762 and A5854/S3566 into law right as the deadline was approaching after vetoing A7598/S6603 earlier in the week. These three bills were referred to as the Pharmacy Rescue Package because they will regulate Pharmacy Benefit Manager (PBMs) and will help keep independent pharmacies operating.

PBMs are the mediators between health insurance companies and pharmaceutical companies who negotiate the price of prescription drugs and how much insurance companies will reimburse pharmacies for medications. The difference between what the insurance companies pay, and the pharmaceutical companies charge is pocketed by PBMs despite how many independent pharmacies lose money on these transactions. Additionally, there are PBMs that own pharmacy chains resulting in bigger reimbursements to these pharmacies and PBMs requiring Medicaid patients to use these pharmacies exclusively. These practices have caused many independent pharmacies to close.

“Governor Hochul signing parts of the Pharmacy Rescue Package is an important step forward toward the State regulating PBMs and leveling the playing field for independent pharmacies,” said Assemblyman Billy Jones (D-Chateaugay). “I want to thank Governor Hochul for supporting independent pharmacists who have been on the frontlines of the pandemic offering COVID-19 testing and vaccines for their communities.”

After the State Legislature passed the Pharmacy Rescue Package in 2021, Assemblyman Jones joined Steve Moore, owner of Condo Pharmacy, Leo “Skip” Maggy owner of Maggy Pharmacy, Dan Bosley owner of Cornerstone Pharmacy and Keeseville Pharmacy, and other local pharmacists in calling for the Governor to sign these bills. Many of these pharmacists joined the assemblyman for a press conference held at Condo Pharmacy when the bills were delivered to the Governor in December. 

"I would like to thank Governor Hochul for taking long overdue action to protect New Yorkers from pharmacy benefit managers,” said Steve Moore, owner of Condo Pharmacy and past president of the Pharmacy Society of the State of New York. “The bills that she signed last week will expand patient choice and stifle PBMs' ability to raise drug prices, rip off taxpayers and destroy community pharmacies.Along with everyone else here at Condo Pharmacy I am incredibly grateful for the support that Assemblyman Jones has provided for these bills during the years that it took to see the legislation passed.Billy has been a steadfast champion of patients, taxpayers, and pharmacies throughout his time in office and the district is lucky to have him representing us in Albany.”

The bill vetoed by the Governor would require Medicaid to use the Fee-For-Service (FFS) model instead of the Managed Care Organizations (MCO) model for pharmaceutical claims. A 2020 report from the New York State Comptroller’s Office found that the MCO model cost the state $605 million from 2016 to 2019. FFS requires federal reimbursement rates to be considered when filling prescriptions which is not required for MCOs and will provide substantial savings for taxpayers. State legislators and independent pharmacists are hopeful that the bill will be included in the State Budget. A7598/S6603 passed both houses of the State Legislature unanimously in 2020.

“I am disappointed A7598/S6603 was vetoed but look forward to working with the Legislature and the Governor to solve the Managed Care Medicaid issues in the 2022 Budget as she stated in her veto memo,” Moore said. “While there is much more to be done, having these bills finally signed into law was an important step toward reclaiming our broken prescription drug distribution system from the powerful corporate middlemen that control it today."

“While it is great news that Governor Hochul signed two of these bills, our work is not done,” Jones said. “I look forward to working with the Governor to include A7598/S6603 in the State Budget to help resolve the issues with MCOs in our Medicaid system so that our independent pharmacies are able to continue to provide the quality care their customers deserve.”