S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6020
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              March 29, 2021
                                ___________
 
 Introduced  by  Sen.  THOMAS -- 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. Section 280-a of the public health law, as added by chapter
 540 of the laws of 2015, subdivisions 3 and 4 as added by section  2  of
 part  MM  of  chapter  57  of  the  laws  of 2018, is amended to read as
 follows:
   § 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 contracts with
 pharmacies or pharmacy contracting agents 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  set  by  the pharmacy benefit manager for therapeutically equiv-
 alent multiple source generic drugs.
   (C) "PHARMACY ACQUISITION COST" MEANS THE AMOUNT THAT A PHARMACEUTICAL
 WHOLESALER CHARGES FOR A PHARMACEUTICAL PRODUCT AS LISTED ON THE PHARMA-
 CY'S BILLING INVOICE.
   (D) "PHARMACY BENEFIT MANAGER AFFILIATE" MEANS A PHARMACY  OR  PHARMA-
 CIST  THAT  DIRECTLY  OR  INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES
 OWNS OR CONTROLS, IS OWNED OR CONTROLLED BY, OR IS UNDER  COMMON  OWNER-
 SHIP OR CONTROL WITH A PHARMACY BENEFIT MANAGER.
   (E)  "PHARMACY  BENEFITS PLAN OR PROGRAM" MEANS A PLAN OR PROGRAM THAT
 PAYS FOR, REIMBURSES, COVERS THE COST  OF,  OR  OTHERWISE  PROVIDES  FOR
 PHARMACIST SERVICES TO INDIVIDUALS WHO RESIDE IN OR ARE EMPLOYED IN THIS
 STATE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10670-02-1
              

 S. 6020                             2
 
   2. A pharmacy benefit manager shall, with respect to contracts between
 a  pharmacy benefit manager and a pharmacy or, alternatively, a pharmacy
 benefit manager and a pharmacy's contracting agent, such as  a  pharmacy
 services  administrative  organization,  include a reasonable process to
 appeal,  investigate and resolve disputes regarding multi-source generic
 drug pricing, INCLUDING BEING BELOW THE PHARMACY ACQUISITION  COST.  The
 appeals process shall include the following provisions:
   (a)  the  right  to  appeal  by  the  pharmacy  and/or  the pharmacy's
 contracting agent shall be limited to thirty days following the  initial
 claim submitted for payment;
   (b)  a  telephone  number through which a network pharmacy may contact
 the pharmacy benefit manager for the purpose of filing an appeal and  an
 electronic  mail  address of the individual who is responsible for proc-
 essing appeals;
   (c) the pharmacy benefit manager shall send an electronic mail message
 acknowledging receipt of the appeal. The pharmacy benefit manager  shall
 respond  in  an electronic message to the pharmacy and/or the pharmacy's
 contracting agent filing the appeal within seven business days  indicat-
 ing  its  determination.  If  the  appeal is determined to be valid, the
 maximum allowable cost for the drug shall be adjusted for the  appealing
 pharmacy effective as of the date of the original claim for payment. The
 pharmacy benefit manager shall require the appealing pharmacy to reverse
 and  rebill  the  claim  in  question  in  order to obtain the corrected
 reimbursement;
   (d) if an update to the maximum allowable cost is warranted, the phar-
 macy benefit manager or covered entity shall adjust the  maximum  allow-
 able  cost of the drug effective for all [similarly situated] pharmacies
 in its network in the state on the date the appeal was determined to  be
 valid; and
   (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.
   2-A. (A) IF THE NATIONAL DRUG CODE NUMBER  PROVIDED  BY  THE  PHARMACY
 BENEFIT  MANAGER  IS  NOT  AVAILABLE BELOW THE PHARMACY ACQUISITION COST
 FROM THE PHARMACEUTICAL WHOLESALER FROM WHOM THE PHARMACY OR  PHARMACIST
 PURCHASES  THE MAJORITY OF PRESCRIPTION DRUGS FOR RESALE, THEN THE PHAR-
 MACY BENEFIT MANAGER SHALL ADJUST THE MAXIMUM ALLOWABLE COST  ABOVE  THE
 CHALLENGING PHARMACY'S PHARMACY ACQUISITION COST AND PERMIT THE PHARMACY
 TO  REVERSE  AND  REBILL EACH CLAIM AFFECTED BY THE INABILITY TO PROCURE
 THE DRUG AT A COST THAT IS EQUAL TO OR LESS THAN  THE  PREVIOUSLY  CHAL-
 LENGED MAXIMUM ALLOWABLE COST.
   (B) A PHARMACY BENEFIT MANAGER SHALL NOT REIMBURSE A PHARMACY OR PHAR-
 MACIST  IN  THIS  STATE AN AMOUNT LESS THAN THE AMOUNT THAT THE PHARMACY
 BENEFIT MANAGER REIMBURSES A  PHARMACY  BENEFIT  MANAGER  AFFILIATE  FOR
 PROVIDING THE SAME PHARMACIST SERVICES.
   (C)  THE  AMOUNT  SHALL BE CALCULATED ON A PER UNIT BASIS BASED ON THE
 SAME GENERIC PRODUCT IDENTIFIED OR GENERIC CODE NUMBER.
   (D) A PHARMACY OR PHARMACIST MAY DECLINE  TO  PROVIDE  THE  PHARMACIST
 SERVICES  TO  A PATIENT OR PHARMACY BENEFIT MANAGER IF, AS A RESULT OF A
 MAXIMUM ALLOWABLE COST, A PHARMACY OR PHARMACIST IS TO BE PAID LESS THAN

 S. 6020                             3
 
 THE PHARMACY ACQUISITION  COST  OF  THE  PHARMACY  PROVIDING  PHARMACIST
 SERVICES.
   3.  No  pharmacy  benefit  manager  shall,  with  respect to contracts
 between such pharmacy benefit manager and a pharmacy or,  alternatively,
 such  pharmacy  benefit manager and a pharmacy's contracting agent, such
 as a pharmacy services administrative organization:
   (a) prohibit or penalize a pharmacist or pharmacy from  disclosing  to
 an  individual  purchasing a prescription medication information regard-
 ing:
   (1) the cost of the prescription medication to the individual, or
   (2) the availability of  any  therapeutically  equivalent  alternative
 medications  or alternative methods of purchasing the prescription medi-
 cation, including but not limited to, paying a cash price; or
   (b) charge or collect from an individual a copayment that exceeds  the
 total  submitted charges by the pharmacy for which the pharmacy is paid.
 If an individual pays a copayment, the pharmacy shall retain the adjudi-
 cated costs and the pharmacy benefit manager shall not redact or  recoup
 the adjudicated cost.
   4. A PHARMACY BENEFIT MANAGER SHALL:
   (A)  PROVIDE ACCESS TO ITS MAXIMUM ALLOWABLE COST PRICES TO EACH PHAR-
 MACY SUBJECT TO THE MAXIMUM ALLOWABLE COST PRICE; AND
   (B) UPDATE ITS MAXIMUM ALLOWABLE COST PRICES ON A TIMELY BASIS, BUT IN
 NO EVENT LONGER THAN SEVEN CALENDAR DAYS FROM AN INCREASE OF TEN PERCENT
 OR MORE IN THE PHARMACY ACQUISITION COST FROM SIXTY PERCENT OR  MORE  OF
 THE PHARMACEUTICAL WHOLESALER DOING BUSINESS IN THE STATE OR A CHANGE IN
 THE METHODOLOGY ON WHICH THE MAXIMUM ALLOWABLE COST PRICE IS BASED OR IN
 THE VALUE OF A VARIABLE INVOLVED IN THE METHODOLOGY.
   5.  Any  provision  of a contract that violates the provisions of this
 section shall be deemed to be void and unenforceable.
   § 2. This act shall take effect immediately.