S T A T E O F N E W Y O R K
________________________________________________________________________
11378
I N A S S E M B L Y
June 7, 2010
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. Destito,
Colton, Pheffer, Cymbrowitz, Reilly, Stirpe, DelMonte, Paulin, Spano,
Christensen, Fields, Jaffee, Bacalles, Burling, Koon, McEneny,
J. Miller, Raia, Thiele) -- read once and referred to the Committee 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. Paragraphs (b), (c) and (e) of subdivision 9 of section
367-a of the social services law, paragraph (b) as amended and paragraph
(e) as added by section 3 of part C of chapter 58 of the laws of 2004,
subparagraph (i) of paragraph (b) as amended by section 10 and subpara-
graph (ii) of paragraph (b) as amended by section 4 of part C of chapter
58 of the laws of 2008, subparagraph (iii) of paragraph (b) as added by
section 29 of part E of chapter 63 of the laws of 2005 and paragraph (c)
as amended by chapter 19 of the laws of 1998, are amended and a new
paragraph (j) is added to read as follows:
(b) for drugs dispensed by pharmacies:
(i) [if the drug dispensed is a multiple source prescription drug for
which an upper limit has been set by the federal centers for medicare
and medicaid services, the lower of: (A) an amount equal to the specific
upper limit set by such federal agency for the multiple source
prescription drug; (B) the estimated acquisition cost of such drug to
pharmacies which, for purposes of this subparagraph, shall mean 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; (C) the maxi-
mum acquisition cost, if any, established pursuant to paragraph (e) of
this subdivision; or (D) the dispensing pharmacy's usual and customary
price charged to the general public, and
(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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14703-06-0
A. 11378 2
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] TWELVE and twenty-five one
hundredths percent OR 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 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 thereof, and updated monthly by the depart-
ment] AND TWENTY-FIVE ONE-HUNDREDTHS PERCENT OR THE WHOLESALE ACQUISI-
TION 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 FOUR AND SIXTY-EIGHT HUNDREDTHS PERCENT THEREOF, AND
UPDATED MONTHLY BY THE DEPARTMENT; OR FOR A CHAIN PHARMACY, AS DEFINED
IN PARAGRAPH (J) OF THIS SUBDIVISION, ACQUISITION COST MEANS THE AVERAGE
WHOLESALE PRICE OF A PRESCRIPTION DRUG BASED ON THE PACKAGE SIZE
DISPENSED FROM LESS SIXTEEN AND TWENTY-FIVE ONE HUNDREDTHS PERCENT THER-
EOF OR THE WHOLESALE ACQUISITION COSTS OF THE PRESCRIPTION DRUG BASED ON
THE PACKAGE SIZE DISPENSED FROM PLUS FIVE TENTHS OF ONE PERCENT THEREOF,
AND UPDATED MONTHLY BY THE DEPARTMENT. For multiple source generic
drugs, estimated acquisition cost means [the lower of the average whole-
sale 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 acquisi-
tion cost, if any, established pursuant to paragraph (e) of this subdi-
vision; [or, for a specialized HIV pharmacy, as defined in paragraph (f)
of this subdivision, 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 twelve percent thereof, or the maximum
acquisition cost, if any, established pursuant to paragraph (e) of this
subdivision] OR THE SPECIFIC UPPER LIMIT SET BY THE FEDERAL CENTERS FOR
MEDICARE AND MEDICAID SERVICES, WHICHEVER IS HIGHER. IF THE DISPENSING
PHARMACY'S USUAL AND CUSTOMARY PRICE CHARGED TO THE GENERAL PUBLIC IS
LOWER THAN EITHER OF THESE, PAYMENT SHALL BE MADE AT THE USUAL AND
CUSTOMARY PRICE.
[(iii)] (II) notwithstanding [subparagraphs (i) and (ii)] SUBPARAGRAPH
(I) of this paragraph and paragraphs (d) and (e) of this subdivision, if
the drug dispensed is a drug that has been purchased from a manufacturer
by a covered entity pursuant to section 340B of the federal public
health service act (42 USCA S 256b), the actual amount paid by such
covered entity pursuant to such section, plus the reasonable administra-
tive costs, as determined by the commissioner, incurred by the covered
entity or by an authorized contract pharmacy in connection with the
purchase and dispensing of such drug and the tracking of such trans-
actions. For purposes of this subparagraph, a "covered entity" is an
entity that meets the requirements of paragraph four of subsection (a)
of such section, that elects to participate in the program established
by such section, and that causes claims for payment for drugs covered by
this subparagraph to be submitted to the medical assistance program,
A. 11378 3
either directly or through an authorized contract pharmacy. No medical
assistance payments may be made to a covered entity or to an authorized
contract pharmacy of a covered entity for drugs that are eligible for
purchase under the section 340B program and are dispensed on an outpa-
tient basis to patients of the covered entity, other than under the
provisions of this subparagraph. Pharmacies submitting claims for
reimbursement of drugs purchased pursuant to section 340B of the public
health service act shall notify the department that the claim is eligi-
ble for purchase under the 340B program, consistent with claiming
instructions issued by the department to identify such claims.
(c) [Notwithstanding subparagraph (i) of paragraph (b) of this subdi-
vision, if] IF a qualified prescriber certifies "brand medically neces-
sary" or "brand necessary" in his or her own handwriting directly on the
face of a prescription for a multiple source drug for which a specific
upper limit of reimbursement has been established by the federal agency,
in addition to writing "d a w" in the box provided for such purpose on
the prescription form, payment under this title for such drug must be
made under the provisions of subparagraph [(ii)] (I) of such paragraph.
(e) For a multiple source generic drug for which no specific upper
payment limit has been established by the federal centers for medicare
and medicaid services, the commissioner of health may establish a maxi-
mum acquisition cost for such drug which shall be effective until such
time as a specific federal upper payment limit has been established for
such drug. The department shall use a similar methodology in establish-
ing such an interim price as that utilized by the centers for medicare
and Medicaid services in establishing the federal upper payment limit
AND MAKE AVAILABLE UPON REQUEST BOTH THE METHODOLOGY AND THE COST BASIS
UTILIZED FOR ANY INDIVIDUAL MULTIPLE SOURCE GENERIC DRUG SO AS TO VERIFY
THAT THE PRODUCT IS AVAILABLE IN PHARMACIES LOCATED IN THE STATE. For
this purpose, the department is authorized to enter into a contract with
an entity to provide technical and administrative support to the commis-
sioner of health.
(J) FOR PURPOSES OF THIS SECTION, A CHAIN PHARMACY IS DEFINED AS FIVE
OR MORE PHARMACIES UNDER THE SAME CORPORATE ENTITY.
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] TWELVE and twen-
ty-five one hundredths percent OR WHOLESALE ACQUISITION COST PLUS FOUR
AND SIXTY-EIGHT HUNDREDTHS PERCENT, plus a dispensing fee as defined in
paragraph (c) of this subdivision, or FOR A CHAIN PHARMACY AS DEFINED IN
PARAGRAPH (J) OF SUBDIVISION NINE OF SECTION THREE HUNDRED SIXTY-
SEVEN-A OF THE SOCIAL SERVICES LAW, AVERAGE WHOLESALE PRICE DISCOUNTED
BY SIXTEEN AND TWENTY-FIVE ONE HUNDREDTHS PERCENT OR WHOLESALE ACQUISI-
TION COST PLUS FIVE TENTHS OF ONE 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 OR
WHOLESALE ACQUISITION COSTS upon which such reimbursement is determined
using nationally recognized and most recently revised sources. Such
A. 11378 4
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 to subdivision 9 of section 367-a
of the social services law made by section one of this act shall not
affect the expiration of such subdivision and shall be deemed to expire
therewith.