NY State Senate Bill 2017-S5623

Senate Bill S5623

2017-2018 Legislative Session

Relates to civil penalties for violations concerning the pharmacy benefit manager contract appeals process

download bill text pdf

Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to health
Jun 21, 2017	committed to rules
May 15, 2017	advanced to third reading
May 10, 2017	2nd report cal.
May 09, 2017	1st report cal.902
Apr 20, 2017	referred to health

Votes

- May 9, 2017 - Health Committee Vote
  S5623
  
  16
  
  Aye
  
  0
  
  Nay
  
  1
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Health Committee Vote: May 9, 2017
      
      aye (16)
      
      Felder
      
      Golden
      
      Hannon
      
      Hoylman-Sigal
      
      Jacobs
      
      Kaminsky
      
      Larkin
      
      Little
      
      Murphy
      
      Persaud
      
      Ritchie
      
      Rivera
      
      Seward
      
      Stavisky
      
      Tedisco
      
      Valesky
      
      aye wr (1)
      
      Montgomery

co-Sponsors

View additional co-sponsors

2017-S5623 (ACTIVE) - Details

See Assembly Version of this Bill:: A4717
Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §280-a, Pub Health L

2017-S5623 (ACTIVE) - Summary

Establishes civil penalties for violations concerning the pharmacy benefit manager contract appeals process; five thousand dollars for each violation recoverable by the attorney generals office; relates to the process for appeals.

2017-S5623 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5623

 TITLE OF BILL :

An act to amend the public health law, in relation to civil penalties
for violations concerning the pharmacy benefit manager contract
appeals process; and in relation to the process for appeal

 PURPOSE :

This bill authorizes the New York State Attorney General to enforce
the pharmacy benefit manager contract appeals process, and expressly
provides for a civil penalty for those in violation of the law.

 SUMMARY OF PROVISIONS :

Section one amends section 280-a of the Public Health Law by adding
two new subdivisions 3 and 4.

Section two amends paragraph (e) of subdivision 2 of section 280-a of
the Public Health Law, as added by chapter 540 of the laws of 2015.

Section three sets forth the effective date.

 JUSTIFICATION :

In 2015, the Legislature passed a law to establish a pharmacy benefit
manager contract appeals process in New York State (Chapter 540).
Pharmacy benefit managers (PBMs) are business entities that manage the
pharmacy benefit for health plans, employers and other payers.  The
contracts that exist between PBMs and pharmacies include the
reimbursement policies for drugs. Though the 2015 law required PBMs to
offer the pharmacies they contract with the right to appeal a
reimbursement rate within thirty days of their claim submission, the
bill did not include a specific enforcement provision to ensure that
every pharmacy benefit manager in New York was in compliance.  In
order to ensure more uniform compliance with the law, this bill
strengthens the existing law by including an enforcement provision
through the New York State Attorney General, and includes a civil
penalty up to $5,000 for those PBMs found in violation of the law.  In
addition, this bill would require PBMs to include a written
explanation with the denial that provides information regarding where
the PBM pricing data was obtained, as originally intended.

 LEGISLATIVE HISTORY :

New bill

 FISCAL IMPLICATIONS :

None to the State

 EFFECTIVE DATE :
This act shall take effect immediately.

2017-S5623 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5623
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              April 20, 2017
                                ___________
 
 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  civil  penalties
   for  violations  concerning  the  pharmacy  benefit  manager  contract
   appeals process; and in relation to the process for appeal

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 280-a of the public health law is amended by adding
 two new subdivisions 3 and 4 to read as follows:
   3.  ANY PHARMACY BENEFIT MANAGER WHO VIOLATES THE PROVISIONS OF SUBDI-
 VISION TWO OF THIS SECTION SHALL BE SUBJECT TO A CIVIL  PENALTY  NOT  TO
 EXCEED FIVE THOUSAND DOLLARS FOR EACH VIOLATION.
   4.  THE  ATTORNEY  GENERAL  SHALL BRING AN ACTION TO RECOVER THE CIVIL
 PENALTIES PROVIDED BY SUBDIVISION THREE OF THIS  SECTION  AND  FOR  SUCH
 OTHER RELIEF AS MAY BE DEEMED NECESSARY.
   §  2.  Paragraph  (e)  of subdivision 2 of section 280-a of the public
 health law, as added by chapter 540 of the laws of 2015, is  amended  to
 read as follows:
   (e) if an appeal is denied, the pharmacy benefit manager shall identi-
 fy  [the  national  drug  code  of a therapeutically equivalent drug, as
 determined by the federal Food and Drug Administration, that  is  avail-
 able  for  purchase  by pharmacies in this state from wholesalers regis-
 tered pursuant to subdivision four of section sixty-eight hundred  eight
 of the education law at a price which is equal to or less than the maxi-
 mum  allowable  cost for that drug as determined by the pharmacy benefit
 manager] IN WRITING: (I) THE NATIONAL DRUG  CODE  OF  A  THERAPEUTICALLY
 EQUIVALENT  DRUG  AS DETERMINED BY THE FOOD AND DRUG ADMINISTRATION THAT
 IS AVAILABLE FOR PURCHASE BY RETAIL COMMUNITY  PHARMACIES  IN  THE  SAME
 PACKAGE  SIZE,  (II)  THE  NAME OF THE WHOLESALER REGISTERED PURSUANT TO
 SUBDIVISION FOUR OF SECTION SIXTY-EIGHT HUNDRED EIGHT OF  THE  EDUCATION
 LAW  FROM  WHICH THE PRICE WAS OBTAINED, AND (III) THE DATE ON WHICH THE
 PRICE WAS DETERMINED.
   § 3. This act shall take effect immediately.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD07427-03-7

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