S T A T E O F N E W Y O R K
________________________________________________________________________
2008
2009-2010 Regular Sessions
I N A S S E M B L Y
January 15, 2009
___________
Introduced by M. of A. GOTTFRIED, ENGLEBRIGHT, GALEF, PAULIN, JACOBS,
EDDINGTON, DelMONTE, FIELDS, TITUS, HOOPER, SCHROEDER, GABRYSZAK,
JAFFEE, MILLMAN -- Multi-Sponsored by -- M. of A. BENEDETTO, BENJAMIN,
BING, BOYLAND, BRADLEY, CLARK, COLTON, COOK, DESTITO, DINOWITZ,
ESPAILLAT, FARRELL, GUNTHER, HEASTIE, JOHN, LATIMER, LAVINE, LIFTON,
MAYERSOHN, McENENY, PERRY, PHEFFER, RAMOS, REILLY, ROBINSON, SWEENEY,
WEISENBERG, WRIGHT -- read once and referred 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
279 to read as follows:
S 279. 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:
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00359-01-9
A. 2008 2
(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;
(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.
A. 2008 3
S 2. Severability. If any subdivision, paragraph, sentence, clause,
phrase, or other portion of section 279 of the public health law, as
added by section one of this act, or any application thereof, is for any
reason declared unconstitutional or invalid, in whole or in part, by any
court, such portion or application shall be deemed severable, and such
unconstitutionality or invalidity shall not affect the validity of the
remaining portions or applications of this section, which remaining
portions or applications shall continue in full force and effect.
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; and, provided,
that the amendment to article 2-A of the public health law made by
section one of this act shall survive the repeal of such article as
provided in section 79 of part C of chapter 58 of the laws of 2005, as
amended.