BILL NUMBER: S6940

SPONSOR: HANNON
 
TITLE OF BILL:

An act to amend the public health law, in relation to prohibited activ-
ities by pharmacy benefit managers

 
PURPOSE:

To prohibit pharmacy benefit managers from imposing clawbacks and phar-
macy gag clauses

 
SUMMARY OF PROVISIONS:

Section one amends Public Health Law § 280-a to bar Pharmacy Benefit
Managers (PBMs) from prohibiting or penalizing pharmacists from disclos-
ing to individuals the cost of a prescription medication and the avail-
ability of therapeutically equivalent alternatives or alternative
payment methods, such as paying cash, that may be less expensive.

              

Further, this section prohibits the imposition of a copayment that
exceeds the total submitted charge by the pharmacy and prohibits a PBM
from redacting or recouping the adjudicated cost from the pharmacy.

Lastly, this section is amended to provide that any contract that
violates the provisions of this section shall be deemed void and unen-
forceable.

Section two provides that the act shall take effect 90 days after enact-
ment.

 
JUSTIFICATION:

As prescription drug costs continue to drive up health care costs, the
practices of pharmacy benefit managers have come into question, and a
number of states have sought to provide consumers more transparency in
drug pricing. One practice, referred to as pharmacy clawbacks occurs
when a patient pays the pharmacy a copayment that is more than the actu-
al cost of the drug, the PBM then recoups or clawsback the excess cost
collected by the pharmacy. Some reports suggest clawbacks happen in 10%
of pharmacist transactions. Another practice, referred to as gag claus-
es, prohibit a pharmacists from telling a consumer the price of the
medication or the fact that if they simply pay out of pocket the drug
would actually cost less. PBMs prohibit such disclosure as it would
limit their ability to clawback. This legislation would prohibit such
practices.

Mirroring language adopted in other states such as Connecticut, Tennes-
see, North Dakota, Georgia and Louisiana, this legislation will ensure
New York consumers are not overpaying for prescription medications only
to benefit PBMs.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
90 days after enactment.