Senate Bill S423

                                 BILL NUMBER:  S423

 TITLE OF BILL :
An act to amend the insurance law, in relation to prohibiting drug
switching payments


 PURPOSE :
Prohibits contracts that include any incentive plan that includes
specific payment to a health care provider as an inducement to change
a prescription

 SUMMARY OF PROVISIONS :
Section 1 amends 3217-b of the insurance law by adding a new
subsection (i).

Section 2 states that this act shall take effect on the ninetieth day
after it shall have become law.

 JUSTIFICATION :
Many employers and health plans have adopted incentive-based
formularies in an attempt to control prescription drug costs. For
several years, doctors have been accepting these bonuses or
performance incentives from health plans for boosting their patients'
use of generic drugs. Although increasing the use of generics can save
health plans a great deal of money, this practice may compromise the
              

patient's health. Offering physicians incentives to switch their
patients' prescription is unethical as it may influence their judgment
on what should purely be a medical decision.  Under no circumstances
should an HMO ask a physician to place their own financial interests
above the welfare of their patients.

The incentive program that has drawn the most scrutiny is one
initiated last year by Blue Care Network. Under the three-month
program, primary care physicians were asked to consider switching
patients from a brand-name drug and received $100 for each plan member
who filled a generic cholesterol-lowering statin prescription.  In an
effort to assist doctors, the HMO mailed them a list of members who
were taking brand-name statins. Blue Care Network spent $2 million in
payments to doctors in compliance. In response to this program, the
American Medical Association posted a document on its website
challenging the use of such programs, while states such as Michigan
and Massachusetts conducted hearings and introduced legislation to
regulate such programs.

 LEGISLATIVE HISTORY :
2007/2008 - S.7938 Remained in the Senate Committee on Insurance

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect on the ninetieth day after it shall have
become a law.