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

                                  7025

                            I N  S E N A T E

                             April 16, 2014
                               ___________

Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
  printed to be committed 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
280-a to read as follows:
  S  280-A.  PHARMACY  BENEFIT MANAGERS. 1. DEFINITIONS. AS USED IN THIS
SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A) "PHARMACY BENEFIT  MANAGER"  MEANS  AN  ENTITY  THAT  ENTERS  INTO
CONTRACTS  WITH  PHARMACIES  ON  BEHALF  OF A HEALTH PLAN, STATE AGENCY,
INSURER, MANAGED CARE  ORGANIZATION,  OR  OTHER  THIRD  PARTY  PAYOR  TO
PROVIDE PHARMACY HEALTH BENEFIT SERVICES OR ADMINISTRATION.
  (B)  "MAXIMUM  ALLOWABLE  COST  PRICE"  MEANS  A MAXIMUM REIMBURSEMENT
AMOUNT FOR A GROUP OF THERAPEUTICALLY EQUIVALENT MULTIPLE SOURCE GENERIC
DRUGS.
  2. A PHARMACY BENEFIT MANAGER MAY NOT PLACE A PRESCRIPTION DRUG  ON  A
MAXIMUM ALLOWABLE COST PRICE LIST UNLESS:
  (A)  THE DRUG HAS AT LEAST THREE NATIONALLY AVAILABLE, THERAPEUTICALLY
EQUIVALENT MULTIPLE SOURCE DRUGS WITH A SIGNIFICANT COST DIFFERENCE;
  (B) THE DRUG IS LISTED AS THERAPEUTICALLY EQUIVALENT AND  PHARMACEUTI-
CALLY  EQUIVALENT OR "A" RATED IN THE UNITED STATES FOOD AND DRUG ADMIN-
ISTRATION'S MOST RECENT VERSION OF THE "ORANGE BOOK";
  (C) THE DRUG IS AVAILABLE FOR  PURCHASE  WITHOUT  LIMITATIONS  BY  ALL
PHARMACIES  IN THE STATE FROM NATIONAL OR REGIONAL WHOLESALERS OPERATING
IN NEW YORK AND IS NOT OBSOLETE OR TEMPORARILY UNAVAILABLE; AND
  (D) THE DRUG IS AVAILABLE FOR PURCHASE AT OR BELOW THE MAXIMUM  ALLOW-
ABLE COST WITHOUT LIMITATIONS TO PHARMACIES OPERATING IN NEW YORK.
  3.  A  PHARMACY  BENEFIT  MANAGER SHALL MAKE AVAILABLE TO EACH NETWORK
PHARMACY AT THE BEGINNING OF THE  TERM  OF  THE  CONTRACT,  THE  SOURCES
UTILIZED TO DETERMINE THE MAXIMUM ALLOWABLE COST PRICING.
  4.  A PHARMACY BENEFIT MANAGER SHALL UPDATE THE MAXIMUM ALLOWABLE COST
ON A TIMELY BASIS, BUT IN NO EVENT LONGER THAN SEVEN CALENDAR DAYS  FROM

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

                                                           LBD14526-02-4

S. 7025                             2

A  CHANGE IN THE METHODOLOGY ON WHICH MAXIMUM ALLOWABLE COST IS BASED OR
IN THE VALUE OF A VARIABLE INVOLVED IN THE METHODOLOGY.
  5. A PHARMACY BENEFIT MANAGER SHALL MAKE AVAILABLE TO CONTRACTED PHAR-
MACIES  ACCESS  TO  THE  LIST OF DRUGS SUBJECT TO MAXIMUM ALLOWABLE COST
SCHEDULES AND THE ACTUAL MAXIMUM ALLOWABLE COST FOR EACH DRUG AND  SHALL
PROVIDE  WEEKLY  UPDATES  OF  CHANGES  MADE  TO  THE  LIST OF DRUGS THAT
INCLUDES REVISED ACTUAL MAXIMUM ALLOWABLE COST FOR  EACH  DRUG  AND  THE
DATE ON WHICH THE CHANGE BECAME EFFECTIVE.
  6.  ALL  CONTRACTS BETWEEN A PHARMACY BENEFIT MANAGER AND A CONTRACTED
PHARMACY SHALL INCLUDE A REASONABLE PROCESS TO APPEAL,  INVESTIGATE  AND
RESOLVE  DISPUTES  REGARDING  MULTI-SOURCE  GENERIC  DRUG  PRICING.  THE
APPEALS PROCESS SHALL INCLUDE THE FOLLOWING PROVISIONS:
  (A) THE RIGHT TO APPEAL SHALL BE LIMITED TO NINETY DAYS FOLLOWING  THE
INITIAL CLAIM SUBMITTED FOR PAYMENT;
  (B)  A  TELEPHONE  NUMBER THROUGH WHICH A NETWORK PHARMACY MAY CONTACT
THE PHARMACY BENEFIT MANAGER AND SPEAK WITH AN INDIVIDUAL WHO IS RESPON-
SIBLE FOR PROCESSING APPEALS;
  (C) A PHARMACY BENEFIT MANAGER SHALL RESPOND TO THE  CHALLENGE  WITHIN
SEVEN BUSINESS DAYS AFTER RECEIPT OF THE CHALLENGE;
  (D) IF AN UPDATE TO THE MAXIMUM ALLOWABLE COST IS WARRANTED, THE PHAR-
MACY  BENEFIT  MANAGER  SHALL MAKE THE CHANGE RETROACTIVE TO THE DATE ON
WHICH THE CLAIM FOR PAYMENT WAS  ADJUDICATED  BY  THE  PHARMACY  BENEFIT
MANAGER.   THE PHARMACY BENEFIT MANAGER SHALL MAKE THE ADJUSTMENT EFFEC-
TIVE FOR ALL SIMILARLY SITUATED PHARMACY PROVIDERS IN THE STATE  IN  THE
NETWORK; AND
  (E) IF AN APPEAL IS DENIED, THE PHARMACY BENEFIT MANAGER SHALL PROVIDE
THE REASON FOR THE DENIAL AND IDENTIFY THE NATIONAL DRUG CODE AT A PRICE
AT  OR BELOW THE MAXIMUM ALLOWABLE COST OR BENCHMARK PRICE AS DETERMINED
BY THE PHARMACY BENEFIT MANAGER.
  S 2. This act shall take effect on the ninetieth day  after  it  shall
become  a  law  and shall apply to any contract between a pharmacy and a
pharmacy benefit manager issued or renewed after such effective date.