Senate Bill S1034

                                 BILL NUMBER:  S1034

 TITLE OF BILL :
An act to amend the insurance law, in relation to health insurance
policies and prescription drug coverage


 PURPOSE OR GENERAL IDEA OF BILL :
Discourages the practice by health insurers of creating co-payment and
co-insurance structures that effectively reduce coverage and raise
costs for policy-holders. It limits the ability of health insurers to
push patients toward generic drugs where the generic drugs are not the
equivalent of the brand name drug prescribed. Prevents a change in an
insurer's formulary from discontinuing use of a prescribed drug by an
existing policyholder whose doctor determines the drug to be medically
necessary. Further, it prohibits insurers from imposing an additional
dispensing fee or co-pay to purchase prescription drugs from a local
pharmacy as opposed to a mail order business.

 SUMMARY OF SPECIFIC PROVISIONS :
Section 1: Amends Insurance Law section 3221 to add a new subsection
(s) Which regulates small group insurance policies.

* Maximum co-payment and co-insurance amounts be limited so they shall
not exceed ten times the dollar value of the lowest co-payment and
co-insurance amount whose cost is above zero dollars.
              

* When an insurer has required that a member take a generic
alternative to a brand-name patented drug prescribed by their doctor,
and the alternative is not deemed as having an equivalent impact on
the member by the member's prescribing physician and is not deemed an
A-rated generically and therapeutically equivalent product as
determined by the FDA, the insurer shall pay for and make available
the brand-name patented drug originally prescribed by the member's
doctor.

* In cases where step therapy is required prior to a patient accessing
a brand name patented prescription drug, the patient can receive the
brand name patented prescription drug prescribed by their doctor if
the patient tries one alternative medication and the patient's doctor
determines that the single source therapy remains medically necessary.

* A patient receiving coverage for a drug on an insurer's existing
formulary shall not be denied coverage upon a change in the formulary
if his or her physician determines that drug to be medically
necessary.

* No insurer shall impose an additional fee or co-pay on an insured
who elects to purchase prescription drugs from a local pharmacy as
opposed to a mail order pharmacy business.

Section 2: Amends Insurance Law section 4303 to add a new subsection
(hh) to add similar provisions to the insurance law as are added in
bill section 1 above.

 JUSTIFICATION :
Access to prescription drugs that best treat a particular illness or
condition are essential to the health and well-being of New Yorkers,
particularly the state's senior population. Decisions about the most
appropriate prescription drug treatments made by doctors and patients
can be inappropriately compromised by financial considerations.

This issue is most evident in relation to access to single-source
drugs. Single-source drugs are unique in their formulation, dosage,
and delivery-they have no generic equivalent because of current patent
laws and are often times more expensive. The higher prices of
single-source drugs cause insurance companies to create policies and
formularies that steer the insured toward prescription drugs that are
cheaper, rather than those that the doctor and patient may decide are
the best course of treatment. Insurance companies put restrictions in
place ranging from higher co-payments and coinsurance to bureaucratic
approval requirements like pre-authorization and step therapy that
hinder patient's access to brand name drugs that-their doctor has
determined is the most suitable drug to treat their condition.

A 2008 study by my office showed that the most commonly prescribed
single-source prescription drugs, and those most frequently used to
treat ailments disproportionally impacting minorities like heart
disease, were the most likely to have restrictions on their use
imposed by the insurance companies. The findings included:

* All 15 health insurance companies surveyed imposed restrictions on
use of the twenty most prescribed single-source drugs.

* More than a third of health insurance companies surveyed imposed
restrictions on the use of the most commonly prescribed single-source
drugs treating mental health conditions.

* More than a third of health insurance companies surveyed imposed
restrictions on the use of the most commonly prescribed single-source
drugs treating high cholesterol and blood pressure.

A 2009 report by my office further examining this issue resulted in
additional conclusions, including:

* Single-source drugs treating HIV/AIDS routinely had the highest
co-payments, despite findings that costly co-payments on HIV/AIDS
drugs results in treatment interruption that can cause the virus to
become resistant to the prescribed drug and make treatment of the
patient more difficult.

* Insurance companies surveyed frequently require doctors to acquire
pre-authorization to prescribe single-source drugs treating cancer for
their patients.

* Single-source drugs treating chronic pain and cardiovascular
ailments are extensively restricted through prior authorization.
expensive co-payments and quantity limitations. In several instances.
multiple limitations on use will be placed on one single-source drug.

This bill also gives freedom to patients to patronize their local
pharmacy instead being forced to obtain their prescription drugs from
mail order businesses.

 LEGISLATIVE HISTORY :
This bill is a combination of Senate Bills 1843, 2938, and 5510 of
2010 that were all sponsored by senator Klein that address the issue
of single source drugs and access to pharmaceuticals at local
pharmacies.

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect on January 1st in the year succeeding when
it was signed into law and apply to all insurance policies or
contracts issued or renewed after that date.