Bill Text: NY S08384 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to implementing the pharmacy benefit manager transparency act.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-05-04 - REFERRED TO INSURANCE [S08384 Detail]
Download: New_York-2017-S08384-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 8384 IN SENATE May 4, 2018 ___________ Introduced by Sen. SEPULVEDA -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to implementing the phar- macy benefit manager transparency act 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 article 6 to 2 read as follows: 3 ARTICLE 6 4 PHARMACY BENEFIT MANAGER TRANSPARENCY ACT 5 Section 601. Short title. 6 602. Definitions. 7 603. Responsibility to covered entities. 8 604. Pharmacy benefit manager transparency. 9 605. Report publication. 10 606. Compliance and enforcement. 11 607. Rulemaking authority. 12 § 601. Short title. This article shall be known and may be cited as 13 the "pharmacy benefit manager transparency act". 14 § 602. Definitions. For the purposes of this article, the following 15 definitions shall apply: 16 (1) "Covered entity" means a nonprofit hospital or medical service 17 organization, insurer, health coverage plan, or health maintenance 18 organization licensed in the state; a health program administered by the 19 superintendent or the state in the capacity of provider of health cover- 20 age; or an employer, labor union, or other group of persons organized in 21 the state that provides health coverage to covered individuals who are 22 employed or reside in the state. 23 (2) "Covered individual" means a member, participant, enrollee, 24 contract holder, or policy holder or beneficiary of a covered entity who 25 is provided health coverage by the covered entity. This includes a 26 dependent or other person provided health coverage through a policy, 27 contract, or plan for a covered individual. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD14871-01-8S. 8384 2 1 (3) "Pharmacy benefit manager" means an entity that contracts with or 2 is employed by a health benefit plan, state agency, insurer, managed 3 care organization, or other third-party payor for the administration or 4 management of prescription drug benefits provided by a covered entity 5 for the benefit of covered individuals. 6 (4) "Wholesale acquisition cost" means the list price for a 7 prescription drug, excluding any discounts, rebates, or reductions in 8 price, as reported in the most recent editions of the wholesale price 9 guides or other publications of drug pricing data a manufacturer 10 provides to wholesalers or distributors in the United States, as speci- 11 fied in 42 U.S.C. 23 § 1395w-3a(c)(6)(B). 12 § 603. Responsibility to covered entities. (1) A pharmacy benefit 13 manager shall exercise good faith and fair dealing in the performance of 14 its contractual obligations to a covered entity, and shall perform its 15 duties with care, skill, prudence, diligence, and professionalism. 16 (2) A pharmacy benefit manager shall notify a covered entity in writ- 17 ing of any activity, policy, practice, ownership interest, or affil- 18 iation of the pharmacy benefit manager that presents a conflict of 19 interest that interferes with the requirements imposed by this article. 20 § 604. Pharmacy benefit manager transparency. (1) Each pharmacy bene- 21 fit manager under contract with a covered entity shall submit to the 22 covered entity and to the superintendent no later than February first of 23 each year the following information for the immediately preceding calen- 24 dar year relative to such contract: 25 (a) The wholesale acquisition cost for each drug on its formulary and 26 the total number of prescriptions that were dispensed. 27 (b) The amount of rebates, discounts, and price concessions that the 28 pharmacy benefit manager received for each drug on its formulary. The 29 amount of rebates shall include any utilization discounts the pharmacy 30 benefit manager receives from a manufacturer. 31 (c) The amount of rebates, discounts, and price concessions described 32 in paragraph (b) of this subsection that were passed through to a 33 covered entity, and the amount that were retained by the pharmacy bene- 34 fit manager, for each drug on its formulary. 35 (d) The amount of any fee, administrative or otherwise, received from 36 a manufacturer. 37 (e) The nature, type, and amount of all other payments that the phar- 38 macy benefit manager receives, directly or indirectly, from a manufac- 39 turer in connection with a drug switch program, a formulary management 40 program, a mail service pharmacy, educational support, data sales 41 related to a covered individual, or any other function. 42 (f) The amount of any reimbursements the pharmacy benefit manager pays 43 to contracting pharmacies, and the negotiated price covered entities pay 44 the pharmacy benefit manager, for each drug on its formulary. 45 (g) Any other information as deemed necessary by the superintendent. 46 (2) The information disclosed pursuant to subsection one of this 47 section shall include all retail, mail order, specialty, and compounded 48 prescription products. 49 (3) Information submitted under this section shall be confidential and 50 shall not be disclosed to any person by the superintendent or the 51 covered entity receiving the information. Such information shall not be 52 deemed a public record of the superintendent. 53 § 605. Report publication. (1) In order to allow patients and employ- 54 ers to compare the ability of pharmacy benefit managers to negotiate 55 rebates, discounts, and price concessions and the amount of such 56 rebates, discounts, and price concessions that are passed through toS. 8384 3 1 plan sponsors, and to allow covered entities to evaluate the nature of 2 the relationship between pharmacy benefit managers and manufacturers and 3 the effectiveness of pharmacy benefit managers in reducing costs for 4 covered entities and their beneficiaries, no later than February first 5 of each year, the superintendent shall issue a report to be published on 6 the superintendent's website aggregating the information received by all 7 pharmacy benefit managers under this section for the preceding year. 8 (2) The superintendent shall ensure that the information described in 9 subsection one of this section is reported in a manner that prevents the 10 disclosure of the identity of a specific pharmacy benefit manager, a 11 covered entity, prices charged for prescription drugs or any associated 12 rebates, discounts or price concessions with respect to an individual 13 drug or an individual plan, or any information that identifies a product 14 or manufacturer. 15 (3) On or before February first of each year the superintendent shall 16 analyze the information submitted by pharmacy benefit managers pursuant 17 to this article and produce an additional report to be published on the 18 superintendent's website on the impact of pharmacy benefit managers on 19 the cost, administration, and availability of prescription drugs. 20 (4) The superintendent shall submit the report and any recommendations 21 for proposed legislation or further action by the state pursuant to the 22 report's findings to the temporary president of the senate, the speaker 23 of the assembly and the governor on or before February first of each 24 year. 25 § 606. Compliance and enforcement. (1) All contracts for pharmacy 26 benefit management entered into in this state or by a covered entity in 27 this state shall comply with the requirements of this article. 28 (2) The superintendent is responsible for the enforcement of this 29 article and may reasonably examine and investigate to ensure compliance 30 with the provisions herein. 31 (3) The superintendent shall adopt procedures for investigating 32 complaints of noncompliance with this article. If the superintendent 33 finds a pharmacy benefit manager has failed to comply with any of the 34 provisions of this article, the superintendent may, after notice and 35 opportunity for a hearing, impose one or more sanctions as deemed appro- 36 priate or necessary to bring non-complying entities into full compli- 37 ance, including, but not limited to: 38 (a) revoking or suspending a license issued to a pharmacy benefit 39 manager, or denying an application for a renewal of a license; 40 (b) imposing a period of probation best adapted to protect the public 41 health and safety and for any rehabilitation; 42 (c) imposing an administrative fine not to exceed two hundred fifty 43 dollars for each violation or instance of noncompliance; 44 (d) assessing costs to be paid by the pharmacy benefit manager; or 45 (e) imposing restrictions on the scope of operation of the pharmacy 46 benefit manager in the state. 47 (4) In addition to sanctions for noncompliance as described in 48 subsection three of this section, if a pharmacy benefit manager fails to 49 submit to the superintendent the information required under section six 50 hundred four of this article by the specified date, the superintendent 51 may impose against the pharmacy benefit manager an administrative penal- 52 ty of not more than two hundred fifty dollars for each day of such fail- 53 ure. 54 (5) Any money collected, as administrative penalties or otherwise, 55 pursuant to this section must be used by the superintendent to cover the 56 costs of implementation and enforcement of this article.S. 8384 4 1 § 607. Rulemaking authority. The superintendent shall promulgate and 2 adopt rules and regulations to effectuate the purposes and provisions of 3 this article. The rules and regulations shall be subject to review in 4 accordance with general rules of administrative rulemaking and review of 5 regulations in this state. 6 § 2. This act shall take effect immediately.
