senate Bill S1086

Provides for pharmacy benefit management and the procurement of prescription drugs at a negotiated rate for dispensation

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 09 / Jan / 2013
    • REFERRED TO HEALTH
  • 08 / Jan / 2014
    • REFERRED TO HEALTH

Summary

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 benefit manager to be received by the pharmacy in trust for the health plan or provider and provides for accountability of such funds.

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Bill Details

Versions:
S1086
Legislative Cycle:
2013-2014
Current Committee:
Senate Health
Law Section:
Public Health Law
Laws Affected:
Add ยง271-a, Pub Health L
Versions Introduced in Previous Legislative Cycles:
2011-2012: S4664
2009-2010: S3930

Sponsor Memo

BILL NUMBER:S1086

TITLE OF BILL:
An act
to amend the public health law, in relation to pharmacy
benefit managers

PURPOSE OR GENERAL IDEA OF BILL:
This bill specifies the fiduciary
duties of pharmacy benefits managers and the obligation to serve the
covered entities with which they contract.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 establishes definitions,
particularly a definition of a Pharmacy Benefits Manager (PBM). It
also establishes that PBMs shall: have a fiduciary relationship with
a health plan, pass through all monies to a health plan other than
fee or payment for services, account for all funds and provide access
to all necessary information, disclose any relevant relationships,
and not substitute or cause the substitution of prescription drugs.

Section 2 is the severability clause.

JUSTIFICATION:
PBMs are companies that manage prescription drug benefit
programs for health plans. PBMs have promised to save health plans
and their members money, but in reality, their negotiations are very
secretive. PBMs commonly pocket payments from drug manufacturers that
ought to be used to lower drug prices, and they accept payments in
exchange for giving preference to more expensive drugs. This bill,
modeled on recent legislation in Maine, would require that PBMs act
not in their own best interest, but rather in the interest of the
health plan and its beneficiaries.

PRIOR LEGISLATIVE HISTORY:
2006: S.7981 Referred to Health
2008: S.2642 Referred to Health
2010: S.3930 Referred to Health
2005: A.10688 Reported to Codes Committee
2006: A.10688A Passed Assembly
2007-08: A.6341 Passed Assembly
2009-10: A.2008A Passed Assembly
2011-12: S.4664/A809 Referred to Health

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
90 days after it shall become law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1086

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen. MAZIARZ -- read twice and ordered printed, and when
  printed to be committed to the Committee on Health

AN ACT to amend the public health law, in relation to  pharmacy  benefit
  managers

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The public health law is amended by adding  a  new  section
271-a to read as follows:
  S  271-A.  PHARMACY BENEFIT MANAGERS. 1. DEFINITIONS.  AS USED IN THIS
SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A) "HEALTH PLAN OR PROVIDER" MEANS AN ENTITY  FOR  WHICH  A  PHARMACY
BENEFIT  MANAGER PROVIDES PHARMACY BENEFIT MANAGEMENT INCLUDING, BUT NOT
LIMITED TO: (I) A HEALTH BENEFIT PLAN OR  OTHER  ENTITY  THAT  APPROVES,
PROVIDES, ARRANGES FOR, OR PAYS FOR HEALTH CARE ITEMS OR SERVICES, UNDER
WHICH  PRESCRIPTION  DRUGS FOR BENEFICIARIES OF THE ENTITY ARE PURCHASED
OR WHICH PROVIDES OR ARRANGES REIMBURSEMENT IN WHOLE OR IN PART FOR  THE
PURCHASE  OF  PRESCRIPTION  DRUGS;  OR  (II)  A  HEALTH CARE PROVIDER OR
PROFESSIONAL,  INCLUDING  A  STATE  OR  LOCAL  GOVERNMENT  ENTITY,  THAT
ACQUIRES  PRESCRIPTION DRUGS TO USE OR DISPENSE IN PROVIDING HEALTH CARE
TO PATIENTS.
  (B) "PHARMACY BENEFIT MANAGEMENT" MEANS  THE  SERVICE  PROVIDED  TO  A
HEALTH  PLAN  OR PROVIDER, DIRECTLY OR THROUGH ANOTHER ENTITY, INCLUDING
THE PROCUREMENT OF PRESCRIPTION DRUGS TO BE DISPENSED  TO  PATIENTS,  OR
THE  ADMINISTRATION OR MANAGEMENT OF PRESCRIPTION DRUG BENEFITS, INCLUD-
ING BUT NOT LIMITED TO, ANY OF THE FOLLOWING:
  (I) MAIL SERVICE PHARMACY;
  (II) CLAIMS PROCESSING,  RETAIL  NETWORK  MANAGEMENT,  OR  PAYMENT  OF
CLAIMS TO PHARMACIES FOR DISPENSING PRESCRIPTION DRUGS;
  (III)  CLINICAL  OR OTHER FORMULARY OR PREFERRED DRUG LIST DEVELOPMENT
OR MANAGEMENT;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02296-01-3

S. 1086                             2

  (IV) NEGOTIATION OR  ADMINISTRATION  OF  REBATES,  DISCOUNTS,  PAYMENT
DIFFERENTIALS,  OR  OTHER  INCENTIVES,  FOR  THE INCLUSION OF PARTICULAR
PRESCRIPTION DRUGS IN A PARTICULAR CATEGORY OR TO PROMOTE  THE  PURCHASE
OF PARTICULAR PRESCRIPTION DRUGS;
  (V)  PATIENT  COMPLIANCE, THERAPEUTIC INTERVENTION, OR GENERIC SUBSTI-
TUTION PROGRAMS; AND
  (VI) DISEASE MANAGEMENT.
  (C) "PHARMACY BENEFIT MANAGER" MEANS ANY ENTITY THAT PERFORMS PHARMACY
BENEFIT MANAGEMENT FOR A HEALTH PLAN OR PROVIDER.
  2. APPLICATION OF SECTION.  THIS SECTION APPLIES TO THE  PROVIDING  OF
PHARMACY  BENEFIT  MANAGEMENT BY A PHARMACY BENEFIT MANAGER TO A PARTIC-
ULAR HEALTH PLAN OR PROVIDER.
  3. DUTY, ACCOUNTABILITY AND TRANSPARENCY.   (A) THE  PHARMACY  BENEFIT
MANAGER  SHALL  HAVE A FIDUCIARY RELATIONSHIP WITH AND OBLIGATION TO THE
HEALTH PLAN OR PROVIDER, AND SHALL PERFORM PHARMACY  BENEFIT  MANAGEMENT
WITH CARE, SKILL, PRUDENCE, DILIGENCE, AND PROFESSIONALISM.
  (B)  ALL FUNDS RECEIVED BY THE PHARMACY BENEFIT MANAGER IN RELATION TO
PROVIDING PHARMACY BENEFIT MANAGEMENT SHALL BE RECEIVED BY THE  PHARMACY
BENEFIT  MANAGER  IN  TRUST FOR THE HEALTH PLAN OR PROVIDER AND SHALL BE
USED OR DISTRIBUTED ONLY PURSUANT  TO  THE  PHARMACY  BENEFIT  MANAGER'S
CONTRACT  WITH THE HEALTH PLAN OR PROVIDER OR APPLICABLE LAW; EXCEPT FOR
ANY FEE OR PAYMENT EXPRESSLY PROVIDED FOR IN THE  CONTRACT  BETWEEN  THE
PHARMACY  BENEFIT  MANAGER AND THE HEALTH PLAN OR PROVIDER TO COMPENSATE
THE PHARMACY BENEFIT MANAGER FOR ITS SERVICES.
  (C) THE PHARMACY BENEFIT MANAGER SHALL  PERIODICALLY  ACCOUNT  TO  THE
HEALTH  PLAN  OR PROVIDER FOR ALL FUNDS RECEIVED BY THE PHARMACY BENEFIT
MANAGER. THE HEALTH PLAN OR PROVIDER SHALL HAVE ACCESS TO ALL  FINANCIAL
AND  UTILIZATION INFORMATION OF THE PHARMACY BENEFIT MANAGER IN RELATION
TO PHARMACY BENEFIT MANAGEMENT PROVIDED TO THE HEALTH PLAN OR PROVIDER.
  (D) THE PHARMACY BENEFIT MANAGER SHALL  DISCLOSE  IN  WRITING  TO  THE
HEALTH  PLAN  OR  PROVIDER  THE  TERMS AND CONDITIONS OF ANY CONTRACT OR
ARRANGEMENT BETWEEN THE PHARMACY BENEFIT MANAGER AND ANY PARTY  RELATING
TO PHARMACY BENEFIT MANAGEMENT PROVIDED TO THE HEALTH PLAN OR PROVIDER.
  (E)  THE  PHARMACY  BENEFIT  MANAGER  SHALL DISCLOSE IN WRITING TO THE
HEALTH PLAN OR PROVIDER ANY  ACTIVITY,  POLICY,  PRACTICE,  CONTRACT  OR
ARRANGEMENT  OF THE PHARMACY BENEFIT MANAGER THAT DIRECTLY OR INDIRECTLY
PRESENTS ANY CONFLICT OF INTEREST WITH THE  PHARMACY  BENEFIT  MANAGER'S
RELATIONSHIP WITH OR OBLIGATION TO THE HEALTH PLAN OR PROVIDER.
  (F)  ANY  INFORMATION  REQUIRED  TO BE DISCLOSED BY A PHARMACY BENEFIT
MANAGER TO A HEALTH PLAN OR PROVIDER UNDER THIS SECTION THAT IS  REASON-
ABLY  DESIGNATED BY THE PHARMACY BENEFIT MANAGER AS PROPRIETARY OR TRADE
SECRET INFORMATION SHALL BE KEPT CONFIDENTIAL  BY  THE  HEALTH  PLAN  OR
PROVIDER,  EXCEPT  AS REQUIRED OR PERMITTED BY LAW, INCLUDING DISCLOSURE
NECESSARY TO PROSECUTE OR DEFEND ANY LEGITIMATE LEGAL CLAIM OR CAUSE  OF
ACTION.
  4.  PRESCRIPTIONS.    A PHARMACY BENEFIT MANAGER MAY NOT SUBSTITUTE OR
CAUSE THE SUBSTITUTING OF ONE PRESCRIPTION DRUG FOR ANOTHER IN  DISPENS-
ING  A  PRESCRIPTION,  OR  ALTER OR CAUSE THE ALTERING OF THE TERMS OF A
PRESCRIPTION, EXCEPT WITH THE APPROVAL OF THE PRESCRIBER OR AS EXPLICIT-
LY REQUIRED OR PERMITTED BY LAW.
  S 2. Severability.  If any provision of this act, or  any  application
of  any  provision  of  this act, is held to be invalid, or ruled by any
federal agency to violate or be inconsistent with any applicable federal
law or regulation, that shall not affect the validity  or  effectiveness
of  any  other provision of this act, or of any other application of any
provision of this act.

S. 1086                             3

  S 3. This act shall take effect on the ninetieth day  after  it  shall
become  a  law  and  shall  apply to any contract for providing pharmacy
benefit management made or renewed on or after that date.

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