NY State Assembly Bill 2009-A9139

Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 05, 2010	print number 9139a
Feb 05, 2010	amend and recommit to health
Jan 06, 2010	referred to health
Sep 22, 2009	referred to health

Bill Amendments

Original

A (Active)

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2009-A9139 - Details

See Senate Version of this Bill:: S6146
Current Committee:: Assembly Health
Law Section:: Social Services Law
Laws Affected:: Amd §367-a, Soc Serv L; amd §250, Eld L

2009-A9139 - Summary

Defines estimated acquisition cost of prescription drugs for pharmacy reimbursement.

2009-A9139 - Sponsor Memo

                                BILL NUMBER:A9139

TITLE OF BILL:  An act to amend the social services law and the elder
law, in relation to prescription drug pricing for pharmacy reimbursement

PURPOSE OF THE BILL:  This bill would amend the social services and
elder laws to change the benchmark used to determined pharmacy
reimbursement for brand-name drugs under public health care programs
from Average Wholesale Price to its equivalent using Wholesale Acquisi-
tion Cost.

SUMMARY OF PROVISIONS:  Section 1 of the bill would amend the social
services law to change the reimbursement methodology used to reimburse
pharmacies for brand-name drugs under the State Medicaid program from
Average Wholesale Price (AWP) minus 16.25% to its equivalent, Wholesale
Acquisition Cost (WAC) plus 5%. This change will also be applicable to
Family Health Plus, Child Health Plus and the AIDS Drug Assistance
Program (ADAP) because the pharmacy reimbursement rates under these
programs utilize the Medicaid rates. In addition, Section 1 of the bill
also changes the reimbursement methodology used to reimburse pharmacies
for brand-name drugs by a specialized HIV pharmacy from AWP minus 12% to
its equivalent, WAC plus 8%.

Sections 2 and 3 of the bill would amend the elder law to change the
reimbursement methodology used to reimburse pharmacies for brand-name
drugs under the Elderly Pharmaceutical Insurance Coverage Program (EPIC)

from AWP-16.25% to its equivalent, WAC plus 5%.

Section 4 of the bill establishes the effective date of the bill as
September 26, 2009.

EXISTING LAW:  Under current law, pharmacies are reimbursed for brand-
name drugs under Medicaid, EPIC, Family Health Plus, Child Health Plus,
ADAP, a specialized HIV pharmacy and workers compensation using the
benchmark Average Wholesale Price.

PRIOR LEGISLATIVE HISTORY:  None transparent and reliable methodology
for determining pharmacy-pricing.  A number of state Medicaid programs
base pharmacy reimbursement on WAC. For example; Massachusetts (WAC +
5%), Maryland (WAC + 8%), Missouri (WAC + l0%), Mississippi (WAC + 9%),
North Dakota (WAC + 12.5%), Ohio (WAC + 7%), Pennsylvania (WAC + 7%),
Texas (WAC + 12%), and Virginia (WAC + 10%). Many public and private
programs across the country are also in the process of moving from AWP
to WAC.

This legislation and its enactment prior to September 26, 2009 is crit-
ical to prevent the steepest and most precipitous pharmacy payment
reduction in history which has the real potential to destabilize the
provider networks in Medicaid and other public health programs. If the
State does not act, patient access to pharmacy services could be compro-
mised. Limited access to pharmacy may result in significantly increased
costs to the State since the products and services routinely provided by

pharmacies are critical to control health care costs and enable patients
to remain in their homes and the community, preventing far more costly
care in hospitals, clinics and emergency rooms.

In the interest of fairness and out of concern for maintaining the
current level of access to pharmacy services for all New Yorkers, New
York should follow the lead of almost a dozen other states and private
insurers and move to a Wholesale Acquisition Cost methodology for phar-
macy reimbursement for its public health care programs through the
enactment of this legislation.

BUDGET IMPLICATIONS:  Division of Budget has booked $9 million in
savings from the impact of the federal lawsuit for this fiscal year. The
bill would not create new expenditures for the state but would maintain
the status quo in terms of Medicaid reimbursement to pharmacies. In
doing so, it would prevent future savings arising from the revaluing of
AWP.

EFFECTIVE DATE:  This bill would take effect September 26, 2009.

2009-A9139 - Bill Text download pdf

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

                                  9139

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                           September 22, 2009
                               ___________

Introduced  by M. of A. DESTITO -- read once and referred to the Commit-
  tee on Health

AN ACT to amend the social services law and the elder law,  in  relation
  to prescription drug pricing for pharmacy reimbursement

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

  Section 1. Subparagraph (ii) of paragraph  (b)  of  subdivision  9  of
section  367-a  of  the  social services law, as amended by section 4 of
part C of chapter 58 of the laws of 2008, is amended to read as follows:
  (ii) if the drug dispensed is a multiple source prescription drug or a
brand-name prescription drug for which no specific upper limit has  been
set  by such federal agency, the lower of the estimated acquisition cost
of such drug to pharmacies,  or  the  dispensing  pharmacy's  usual  and
customary  price  charged  to  the general public. For sole and multiple
source brand name drugs, estimated acquisition cost means  [the  average
wholesale  price  of  a  prescription  drug  based upon the package size
dispensed from, as reported by the  prescription  drug  pricing  service
used  by  the  department,  less  sixteen and twenty-five one hundredths
percent] THE WHOLESALE ACQUISITION COST OF  A  PRESCRIPTION  DRUG  BASED
UPON  THE  PACKAGE  SIZE DISPENSED FROM, AS REPORTED BY THE PRESCRIPTION
DRUG PRICING SERVICE USED BY THE DEPARTMENT, PLUS FIVE PERCENT  thereof,
and updated monthly by the department; or, for a specialized HIV pharma-
cy,  as  defined  in paragraph (f) of this subdivision, acquisition cost
means [the average wholesale price of a prescription drug based upon the
package size dispensed from, as reported by the prescription drug  pric-
ing  service  used by the department, less twelve percent] THE WHOLESALE
ACQUISITION COST OF A PRESCRIPTION DRUG  BASED  UPON  THE  PACKAGE  SIZE
DISPENSED  FROM,  AS  REPORTED  BY THE PRESCRIPTION DRUG PRICING SERVICE
USED BY THE DEPARTMENT, PLUS EIGHT PERCENT thereof, and updated  monthly
by the department. For multiple source generic drugs, estimated acquisi-
tion  cost  means  the  lower  of  the  average  wholesale  price  of  a

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14703-01-9

A. 9139                             2

prescription drug based on the package size dispensed from, as  reported
by  the  prescription  drug pricing service used by the department, less
twenty-five percent thereof, or the maximum acquisition  cost,  if  any,
established  pursuant  to  paragraph  (e) of this subdivision; or, for a
specialized HIV pharmacy, as defined in paragraph (f) of  this  subdivi-
sion, acquisition cost means the lower of the average wholesale price of
a  prescription  drug  based  on  the  package  size  dispensed from, as
reported by the prescription drug pricing service used  by  the  depart-
ment,  less  twelve percent thereof, or the maximum acquisition cost, if
any, established pursuant to paragraph (e) of this subdivision.
  S 2. Subparagraph (1) of paragraph b of subdivision 1 of  section  250
of the elder law, as amended by section 1 of part A of chapter 58 of the
laws of 2008, is amended to read as follows:
  (1) [Average wholesale price discounted by sixteen and twenty-five one
hundredths percent] WHOLESALE ACQUISITION COST PLUS FIVE PERCENT, plus a
dispensing fee as defined in paragraph (c) of this subdivision, or
  S  3. Subdivision 2 of section 250 of the elder law is amended to read
as follows:
  2. For purposes of determining the amount of reimbursement which shall
be paid to a participating provider pharmacy, the panel shall  determine
or  cause  to  be  determined, through a statistically valid survey, the
quantities of each covered drug that participating  provider  pharmacies
buy  most  frequently.  Using  the result of this survey, the contractor
shall update every thirty days the list of  [average  wholesale  prices]
WHOLESALE  ACQUISITION COSTS upon which such reimbursement is determined
using nationally recognized and  most  recently  revised  sources.  Such
price  revisions  shall  be made available to all participating provider
pharmacies. The pharmacist shall be reimbursed based  on  the  price  in
effect at the time the covered drug is dispensed.
  S 4. This act shall take effect September 26, 2009; provided, however,
that the amendments made to subparagraph (ii) of paragraph (b) of subdi-
vision  9  of section 367-a of the social services law by section one of
this act shall not affect the expiration of such paragraph and shall  be
deemed to expire therewith.

co-Sponsors

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multi-Sponsors

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2009-A9139A (ACTIVE) - Details

See Senate Version of this Bill:: S6146
Current Committee:: Assembly Health
Law Section:: Social Services Law
Laws Affected:: Amd §367-a, Soc Serv L; amd §250, Eld L

2009-A9139A (ACTIVE) - Summary

Defines estimated acquisition cost of prescription drugs for pharmacy reimbursement.

2009-A9139A (ACTIVE) - Sponsor Memo

                                BILL NUMBER:A9139A

TITLE  OF BILL:  An act to amend the social services law and the elder
law,  in  relation  to  prescription   drug   pricing   for   pharmacy
reimbursement

PURPOSE  OF  THE BILL:   This bill would amend the social services and
elder laws  to  change  the  benchmark  used  to  determined  pharmacy
reimbursement  for  brand-name drugs under public health care programs
from  Average  Wholesale  Price  to  its  equivalent  using  Wholesale
Acquisition Cost.

SUMMARY  OF PROVISIONS:   Section 1 of the bill would amend the social
services law to change the reimbursement methodology used to reimburse
pharmacies for brand-name drugs under the State Medicaid program  from
Average   Wholesale  Price  (AMP)  minus  16.25%  to  its  equivalent,
Wholesale Acquisition Cost (MAC) plus 4.68%. This change will also  be
applicable  to Family Health Plus, Child Health Plus and the AIDS Drug
Assistance Program (ADAP) because  the  pharmacy  reimbursement  rates
under  these programs utilize the Medicaid rates. In addition, Section
1 of the bill also  changes  the  reimbursement  methodology  used  to
reimburse  pharmacies  for  brand-name  drugs  by  a  specialized  HIV
pharmacy from AMP minus 12% to its equivalent, MAC plus 4.68%.

Sections 2 and 3 of the bill would amend the elder law to  change  the
reimbursement  methodology used to reimburse pharmacies for brand-name

drugs under the  Elderly  Pharmaceutical  Insurance  Coverage  Program
(EPIC) from AMP-16.25% to its equivalent, MAC plus 4.68%.

Section  4  of  the bill establishes the effective date of the bill as
September 26, 2009.

EXISTING LAW:   Under  current  law,  pharmacies  are  reimbursed  for
brand-name  drugs  under  Medicaid,  EPIC,  Family  Health Plus, Child
Health Plus, ADAP, a specialized HIV pharmacy and workers compensation
using the benchmark Average Wholesale Price.

STATEMENT IN SUPPORT:   On September 26, 2009,  First  Data  Bank  and
Medi-Span  will  adjust the values of Average Wholesale Price (AMP) to
decrease RWP by approximately four percentage points. First Data  Bank
and Medi-Span are the national publishers of Average Wholesale Prices,
which  currently  form  the  basis  of  reimbursement policies in both
public and private health care  programs.  The  four-percentage  point
across  the  board reduction in the value of AMP on September 26, 2009
is part  of  a  Settlement  accepted  by  Federal  District  Court  in
Massachusetts in an action that began in 2001 charging that the values
of AMP were inflated for approximately 1400 drugs. Pharmacies were not
parties  in  this case and there was no alleged wrongdoing on the part
of pharmacies in this case.

As a result of this Settlement and the resulting four-percentage point
reduction in the value of AMP, pharmacies will experience the  largest
and  most  significant  cut  in  pharmacy reimbursement for brand-name
drugs in history if;programs continue to use AMP  as  their  benchmark
for  determining  such  reimbursement.  It is important to understand,
that while reimbursement would be  decreased  substantially  for  over
8,000  brand-name drugs as a result of the Settlement, inventory costs


and the cost to acquire  prescription  drugs  incurred  by  pharmacies
would remain unchanged. The potential impact on the State's pharmacies
and in turn, patient access to pharmacy services could be severe.

In New York, pharmacies have already experienced serious cuts over the
last  decade.  In 2001, pharmacies were reimbursed under Medicaid at a
rate of AMP-10%. Today, pharmacies are reimbursed at AMP-16.25%  --  a
six  and  one quarter percentage decrease in reimbursement in the last
eight years alone.

Further, as a result of this case, First Data Bank and Medi-Span  have
stated  that  the  publication  of  Average  Wholesale  Prices will be
discontinued at some point within the next two years.For this  reason,
it  is  inevitable  that  public and private health care programs that
currently use AMP to determine their pharmacy reimbursement will  need
to  move  to  a new reimbursement methodology at some point within two
years.

The  private  prescription  benefit  market  has   already   responded
positively to the change coming on September 26, 2009. Citing the need
to  ensure  provider  network stability, many have notified pharmacies
that their current reimbursement levels will not change on this date.

This legislation would  make  this  needed  adjustment  for  the  drug
benefits  provided in New York's public health care programs including
Medicaid, Family Health Plus, Child Health Plus, ADAP,  a  specialized
HIV  pharmacy  and EPIC. Specifically, this legislation would make the
necessary statutory changes to move away from Average Wholesale  Price
as  the  benchmark  fox pharmacy reimbursement for brand-name drugs to
its equivalent, Wholesale Acquisition Cost. The equivalent rate of the
current AMP minus 16.25% is WAC plus 5% under Medicaid, Family  Health
Plus, Child Health Plus, ADAP and EPIC.

Wholesale  Acquisition Cost (MAC) is a readily available and regularly
updated published price for prescription drugs. Many see it is a  more
transparent and reliable methodology for determining pharmacy-pricing.
A  number  of  state  Medicaid programs base pharmacy reimbursement on
MAC. For example: Massachusetts {MAC  +  5%),  Maryland  (MAC  +  8%),
Missouri  (MAC  +  10%),  Mississippi  (MAC + 9%), North Dakota (MAC +
12.5%), Ohio (MAC + 7%), Pennsylvania (MAC + 7%) , Texas (MAC +  12%),
and  Virginia (MAC C 10%). Many public and private programs across the
country are also in the process of moving from AMP to MAC.

This legislation and its enactment prior  to  September  26,  2009  is
critical to prevent the steepest and most precipitous pharmacy payment
reduction  in  history which has the real potential to destabilize the
provider networks in Medicaid and other public health programs. If the
State does not act, patient  access  to  pharmacy  services  could  be
compromised.  Limited  access  to pharmacy may result in significantly
increased costs to the State since the products and services routinely
provided by pharmacies are critical to control health care  costs  and
enable patients to remain in their homes and the community, preventing
far more costly care in hospitals, clinics and emergency rooms.

In  the  interest  of  fairness and out of concern for maintaining the
current level of access to pharmacy services for all New Yorkers,  New
York should follow the lead of almost a dozen other states and private


insurers  and  move  to  a  Wholesale Acquisition Cost methodology for
pharmacy reimbursement for its public health care programs through the
enactment of this legislation.

PRIOR  LEGISLATIVE  HISTORY:   2009: A.9139 - Referred to the Assembly
Health Committee; Passed Senate.

BUDGET IMPLICATIONS: None.

EFFECTIVE DATE:  This bill would take effect September 26, 2009.

2009-A9139A (ACTIVE) - Bill Text download pdf

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

                                 9139--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                           September 22, 2009
                               ___________

Introduced  by M. of A. DESTITO, COLTON, PHEFFER, CYMBROWITZ, SCHIMMING-
  ER, WEISENBERG, HEASTIE, PRETLOW, REILLY,  STIRPE,  PERALTA,  RUSSELL,
  DelMONTE,  CRESPO,  BENEDETTO,  MARKEY,  MAISEL,  HOYT, ABBATE, PERRY,
  MILLMAN,  LUPARDO,  PAULIN,  SCHROEDER,  SAYWARD,   DUPREY,   CALHOUN,
  GUNTHER,  ESPAILLAT,  KAVANAGH, SPANO, HYER-SPENCER, ROSENTHAL, CHRIS-
  TENSEN, FIELDS, SKARTADOS, ENGLEBRIGHT, JAFFEE,  DINOWITZ,  ZEBROWSKI,
  BOYLAND,  CASTRO,  POWELL,  ALESSI  --  Multi-Sponsored by -- M. of A.
  BACALLES,  BARRA,  BURLING,  CONTE,  FITZPATRICK,  GABRYSZAK,   GALEF,
  GIBSON,  GIGLIO, HAYES, HEVESI, KOLB, KOON, LATIMER, McENENY, J. MILL-
  ER, NOLAN,  O'MARA,  PEOPLES-STOKES,  QUINN,  RAIA,  SWEENEY,  THIELE,
  TITONE  -- read once and referred to the Committee on Health -- recom-
  mitted to the Committee on Health in accordance with Assembly Rule  3,
  sec.  2  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

AN ACT to amend the social services law and the elder law,  in  relation
  to prescription drug pricing for pharmacy reimbursement

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

  Section 1. Subparagraph (ii) of paragraph  (b)  of  subdivision  9  of
section  367-a  of  the  social services law, as amended by section 4 of
part C of chapter 58 of the laws of 2008, is amended to read as follows:
  (ii) if the drug dispensed is a multiple source prescription drug or a
brand-name prescription drug for which no specific upper limit has  been
set  by such federal agency, the lower of the estimated acquisition cost
of such drug to pharmacies,  or  the  dispensing  pharmacy's  usual  and
customary  price  charged  to  the general public. For sole and multiple
source brand name drugs, estimated acquisition cost means  [the  average
wholesale  price  of  a  prescription  drug  based upon the package size
dispensed from, as reported by the  prescription  drug  pricing  service
used  by  the  department,  less  sixteen and twenty-five one hundredths
percent] THE WHOLESALE ACQUISITION COST OF  A  PRESCRIPTION  DRUG  BASED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14703-02-0

A. 9139--A                          2

UPON  THE  PACKAGE  SIZE DISPENSED FROM, AS REPORTED BY THE PRESCRIPTION
DRUG PRICING SERVICE USED BY THE DEPARTMENT, PLUS FOUR  AND  SIXTY-EIGHT
HUNDREDTHS  PERCENT  thereof, and updated monthly by the department; or,
for  a  specialized  HIV  pharmacy,  as defined in paragraph (f) of this
subdivision, acquisition cost means [the average wholesale  price  of  a
prescription  drug  based  upon  the  package  size  dispensed  from, as
reported by the prescription drug pricing service used  by  the  depart-
ment,   less  twelve  percent]  THE  WHOLESALE  ACQUISITION  COST  OF  A
PRESCRIPTION DRUG  BASED  UPON  THE  PACKAGE  SIZE  DISPENSED  FROM,  AS
REPORTED  BY  THE  PRESCRIPTION DRUG PRICING SERVICE USED BY THE DEPART-
MENT, PLUS FOUR AND SIXTY-EIGHT HUNDREDTHS PERCENT thereof, and  updated
monthly  by the department. For multiple source generic drugs, estimated
acquisition cost means the lower of the average  wholesale  price  of  a
prescription  drug based on the package size dispensed from, as reported
by the prescription drug pricing service used by  the  department,  less
twenty-five  percent  thereof,  or the maximum acquisition cost, if any,
established pursuant to paragraph (e) of this  subdivision;  or,  for  a
specialized  HIV  pharmacy, as defined in paragraph (f) of this subdivi-
sion, acquisition cost means the lower of the average wholesale price of
a prescription drug  based  on  the  package  size  dispensed  from,  as
reported  by  the  prescription drug pricing service used by the depart-
ment, less twelve percent thereof, or the maximum acquisition  cost,  if
any, established pursuant to paragraph (e) of this subdivision.
  S  2. Subparagraph 1 of paragraph b of subdivision 1 of section 250 of
the elder law, as amended by section 1 of part A of chapter  58  of  the
laws of 2008, is amended to read as follows:
  (1) [Average wholesale price discounted by sixteen and twenty-five one
hundredths percent] WHOLESALE ACQUISITION COST PLUS FOUR AND SIXTY-EIGHT
HUNDREDTHS PERCENT, plus a dispensing fee as defined in paragraph (c) of
this subdivision, or
  S  3. Subdivision 2 of section 250 of the elder law is amended to read
as follows:
  2. For purposes of determining the amount of reimbursement which shall
be paid to a participating provider pharmacy, the panel shall  determine
or  cause  to  be  determined, through a statistically valid survey, the
quantities of each covered drug that participating  provider  pharmacies
buy  most  frequently.  Using  the result of this survey, the contractor
shall update every thirty days the list of  [average  wholesale  prices]
WHOLESALE  ACQUISITION COSTS upon which such reimbursement is determined
using nationally recognized and  most  recently  revised  sources.  Such
price  revisions  shall  be made available to all participating provider
pharmacies. The pharmacist shall be reimbursed based  on  the  price  in
effect at the time the covered drug is dispensed.
  S  4.  This  act  shall take effect immediately and shall be deemed to
have been in full force and effect on  and  after  September  26,  2009;
provided,  however,  that  the  amendments  made to subparagraph (ii) of
paragraph (b) of subdivision 9 of section 367-a of the  social  services
law  by  section one of this act shall not affect the expiration of such
subdivision and shall be deemed to expire therewith.

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Assembly Bill A9139

Sponsored By

Archive: Last Bill Status - In Assembly Committee

Actions

Bill Amendments

co-Sponsors

multi-Sponsors

2009-A9139 - Details

2009-A9139 - Summary

2009-A9139 - Sponsor Memo

2009-A9139 - Bill Text download pdf

co-Sponsors

multi-Sponsors

2009-A9139A (ACTIVE) - Details

2009-A9139A (ACTIVE) - Summary

2009-A9139A (ACTIVE) - Sponsor Memo

2009-A9139A (ACTIVE) - Bill Text download pdf

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Assembly Bill A9139

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Sponsored By

DESTITO

Archive: Last Bill Status - In Assembly Committee

Actions

Bill Amendments

co-Sponsors

William Colton

Audrey Pheffer

Steven Cymbrowitz

Robin Schimminger

multi-Sponsors

James Bacalles

Robert Barra

Daniel Burling

James Conte

2009-A9139 - Details

2009-A9139 - Summary

2009-A9139 - Sponsor Memo

2009-A9139 - Bill Text download pdf

co-Sponsors

William Colton

Audrey Pheffer

Steven Cymbrowitz

Robin Schimminger

multi-Sponsors

James Bacalles

Robert Barra

Daniel Burling

James Conte