S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6022
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 21, 2017
                                ___________
 
 Introduced  by M. of A. TITUS -- read once and referred to the Committee
   on Insurance
 
 AN ACT to amend the insurance  law,  in  relation  to  denying  policies
   imposing drug tiers and cost-sharing for prescription medication
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Legislative findings. The legislature finds that:
   (a) The cost of specialty drugs is a great concern. According  to  IMS
 Health,  about $37.7 billion was spent on specialty drugs in 2003, grow-
 ing by as much as 26.6  percent  since  2002,  nearly  double  the  13.4
 percent growth rate in total drug spending. The growth rate for special-
 ty  pharmacy drugs is expected to be 20 percent a year for the foreseea-
 ble future. Studies and efforts to cope with the rising cost  of  drugs,
 including specialty drugs, should strongly consider affordability issues
 and minimizing the impact on patients' health.
   (b)  The current health insurance system is increasingly unaffordable,
 regularly adding new barriers to access. According to the Kaiser Founda-
 tion, health insurance premiums rose 6.1 percent in  2007,  faster  than
 wages rising at 3.7 percent and inflation rising at 2.6 percent.  Annual
 premiums  for  family  coverage  averages  $12,106,  with workers paying
 $3,281. Since 2001, premiums  for  family  coverage  have  increased  78
 percent,  while  wages have gone up 19 percent and inflation has gone up
 17 percent. Furthermore, between 2000  and  2003,  annual  out-of-pocket
 spending  rose  $900  or  30  percent for employees with family coverage
 including insurance premiums, deductibles and drug co-payments, increas-
 ing from $1,890 to $2,790.
   (c) Multi-tiered formularies have undoubtedly transformed the pharmacy
 benefit landscape.  By 2005, most workers with employer-sponsored cover-
 age (74 percent) were enrolled in plans with 3 or more tiers,  nearly  3
 times the rate in 2000 (27 percent). While cost containment measures are
 necessary,  certain  cost-sharing  policies, such as tier four measures,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02806-01-7

 A. 6022                             2
 
 have exacerbated costs and created new barriers  to  access.  Tier  four
 policies  charge a percentage of the total cost of high-priced specialty
 medications (20-33 percent) rather than a fixed co-pay, resulting  in  a
 rise  in cost-sharing from average co-pays of $25 per prescription up to
 $325 or even $4,000 in  some  instances.  These  policies  often  target
 vulnerable  populations by driving prices up for extremely sick patients
 in order to reduce costs for healthy patients and/or to  improve  profit
 margins  for Health Maintenance Organizations or Pharmacy Benefit Manag-
 ers. Families and  individuals  struggling  with  diagnoses  of  anemia,
 cancer,  multiple  sclerosis  and hepatitis C who depend on cutting-edge
 medications for functioning or survival, have been severely burdened  by
 a new pricing system implemented in 86 percent of the Medicare plans and
 10  percent  of private plans. Several studies reveal that various cost-
 sharing policies create negative health outcomes by reducing utilization
 and increasing hospitalization.  One report cited in the Journal of  the
 American  Medical Association identified 132 articles which examined the
 association between prescription drug  plans  cost-containment  measures
 and  salient  outcomes.    The  results revealed that in the short-term,
 increased cost-sharing is associated with lower rates of drug treatment,
 worse adherence among existing users, and more frequent  discontinuation
 of  therapy.  Policies which worsen health outcomes must be prevented or
 halted in order to avoid costly long-term consequences, but more  impor-
 tantly to maintain high-quality healthcare for all New Yorkers.
   § 2. Subsection (d) of section 3221 of the insurance law is amended by
 adding a new paragraph 4 to read as follows:
   (4)  THE  SUPERINTENDENT SHALL DENY ANY FORM OF GROUP HEALTH INSURANCE
 POLICY WHICH  CATEGORIZES  PRESCRIPTION  MEDICATION  BASED  ON  SPECIFIC
 DISEASE  OR SPECIFIC COST AND CHARGES A COST-SHARING PERCENTAGE FOR SUCH
 PRESCRIPTION MEDICATION.
   § 3. Subsection (i) of section 3216 of the insurance law is amended by
 adding a new paragraph 34 to read as follows:
   (34) EVERY POLICY WHICH PROVIDES COVERAGE FOR PRESCRIPTION DRUGS SHALL
 NOT CATEGORIZE PRESCRIPTION MEDICATIONS BASED  ON  SPECIFIC  DISEASE  OR
 SPECIFIC  COST  AND  SHALL NOT CHARGE BASED ON A COST-SHARING PERCENTAGE
 FOR SUCH PRESCRIPTION MEDICATION.
   § 4. Section 4303 of the insurance law is  amended  by  adding  a  new
 subsection (rr) to read as follows:
   (RR)  EVERY POLICY WHICH PROVIDES COVERAGE FOR PRESCRIPTION CARE SHALL
 NOT CATEGORIZE PRESCRIPTION MEDICATIONS BASED  ON  SPECIFIC  DISEASE  OR
 SPECIFIC  COST AND MAY NOT CHARGE BASED ON A COST-SHARING PERCENTAGE FOR
 SUCH PRESCRIPTION MEDICATION.
   § 5. This act shall take effect on the one hundred twentieth day after
 it shall have become a law; provided however, that any rules  and  regu-
 lations  necessary  for  the  timely  implementation  of this act on its
 effective date shall be promulgated on or before such date.