NY State Senate Bill 2021-S2006

Senate Bill S2006

2021-2022 Legislative Session

Requires certain insurance carriers to certify that at least a majority of prescription drug rebates are provided to patients at the point of sale

download bill text pdf

Archive: Last Bill Status - In Senate Committee Insurance 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

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to insurance
Jan 16, 2021	referred to insurance

2021-S2006 (ACTIVE) - Details

See Assembly Version of this Bill:: A5218
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3231 & 3221, Ins L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S6489, A8310
2023-2024: S2393, A1962

2021-S2006 (ACTIVE) - Summary

Requires individual and small group insurance carriers and group and blanket accident and health carriers to certify that at least a majority of prescription drug rebates are provided to patients at the point of sale.

2021-S2006 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S2006

SPONSOR: JACKSON
 
TITLE OF BILL:

An act to amend the insurance law, in relation to requiring individual
and small group insurance carriers and group and blanket accident and
health carriers to certify that at least a majority of prescription drug
rebates are provided to patients at the point of sale

 
PURPOSE:

To ensure patients benefit from substantial discounts that exist within
the prescription drug supply chain.

 
SUMMARY OF PROVISIONS:

Section 1 adds a new subparagraph (C) to subsection (e) of Section 3231
of the Insurance Law to require individual and small group carriers to
certify that at least a majority (greater than 50%) of prescription drug
rebates are provided to patients at the point of sale.

Section 2 amends subsection (b) of Section 3221 of the Insurance Law to
require group and blanket accident and health carriers to certify that
at least a majority (greater than 50%) of prescription drug rebates are
provided to patients at the point of sale.

Section 3 is the effective date.

 
JUSTIFICATION:

The difference between list prices of prescription drugs and the net
prices paid by pharmacy benefit managers and health insurers has been
growing exponentially in recent years. While many entities benefit from
these large negotiated discounts - estimated at $166 billion in 2018 -
one group gets the short end of the stick: patients.

As more and more health insurance benefit designs rely on coinsurance
and deductibles, patients end up paying cost sharing on the list price
of the drug even as their health plan is reaping significant discounts.
Unlike negotiated discounts on other services like hospital care, these
savings are not shared with patients in the deducible phase of a plan
and patients often end up paying more than their health plan for a drug.
Plans argue that the discounts are used to lower premiums for everyone,
but patients with complex and chronic conditions end up carrying the
biggest burden - exactly the opposite of how insurance should work. This
bill strikes a careful balance, allowing rebates and discounts to be
socialized and keep premiums down to a point, but also making sure some
of those significant discounts are passed along to the place they're
most important to patients - at the pharmacy counter.

Many health plans have already implemented this option and have marketed
this approach as good for patients and "worth it."

 
LEGISLATIVE HISTORY:

2019-2020: S.6489 - Referred to Insurance/A.8310 - Referred to Insurance

 
STATE AND LOCAL FISCAL IMPLICATIONS:
None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S2006 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2006
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 16, 2021
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, in relation to  requiring  individual
   and  small group insurance carriers and group and blanket accident and
   health carriers to certify that at least a  majority  of  prescription
   drug rebates are provided to patients at the point of sale
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subsection (e) of section 3231 of the insur-
 ance law is amended by adding a new subparagraph (C) to read as follows:
   (C) AN INSURER SHALL ANNUALLY CERTIFY TO THE DEPARTMENT  THAT,  DURING
 THE  PRIOR  BENEFIT YEAR, THE INSURER MADE AVAILABLE TO ENROLLEES AT THE
 POINT OF SALE AT LEAST A MAJORITY (I.E., GREATER THAN FIFTY PERCENT)  OF
 THE  REBATES  RECEIVED  BY SUCH INSURER OR ANY THIRD PARTY ADMINISTERING
 PRESCRIPTION DRUG BENEFITS ON BEHALF OF SUCH INSURER.
   (I) FOR PURPOSES OF THIS PARAGRAPH, "REBATE" MEANS:
   (1) NEGOTIATED PRICE CONCESSIONS INCLUDING BUT  NOT  LIMITED  TO  BASE
 REBATES  AND  REASONABLE  ESTIMATES  OF ANY PRICE PROTECTION REBATES AND
 PERFORMANCE-BASED REBATES THAT MAY ACCRUE DIRECTLY OR INDIRECTLY TO  THE
 ISSUER  DURING THE COVERAGE YEAR FROM A MANUFACTURER, DISPENSING PHARMA-
 CY, OR OTHER PARTY TO THE TRANSACTION, AND
   (2) REASONABLE ESTIMATES OF ANY FEES AND  OTHER  ADMINISTRATIVE  COSTS
 THAT  ARE  PASSED THROUGH TO THE ISSUER AND SERVE TO REDUCE THE ISSUER'S
 PRESCRIPTION DRUG LIABILITIES FOR THE COVERAGE YEAR.
   (II) IN PROVIDING THE CERTIFICATION REQUIRED UNDER THIS  SUBPARAGRAPH,
 AN  ISSUER  SHALL  NOT PUBLISH OR OTHERWISE REVEAL INFORMATION REGARDING
 THE ACTUAL AMOUNT OF REBATES THE ISSUER RECEIVED ON A PRODUCT-, MANUFAC-
 TURER- OR PHARMACY-SPECIFIC BASIS. SUCH INFORMATION IS  PROTECTED  AS  A
 TRADE  SECRET,  IS NOT A PUBLIC RECORD AS DEFINED IN THE PUBLIC OFFICERS
 LAW AND SHALL NOT BE DISCLOSED DIRECTLY OR INDIRECTLY. AN INSURER  SHALL
 IMPOSE THE CONFIDENTIALITY PROTECTIONS OF THIS SUBPARAGRAPH ON ANY THIRD
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD02313-01-1

 S. 2006                             2
 
 PARTIES  OR  VENDORS  WITH  WHICH  IT CONTRACTS THAT MAY RECEIVE OR HAVE
 ACCESS TO REBATE INFORMATION.
   § 2. Subsection (b) of section 3221 of the insurance law is amended to
 read as follows:
   (b)  (1)  No  such policy shall be delivered or issued for delivery in
 this state unless a schedule of the premium  rates  pertaining  to  such
 form shall have been filed with the superintendent.
   (2)  AN  INSURER SHALL ANNUALLY CERTIFY TO THE DEPARTMENT THAT, DURING
 THE PRIOR BENEFIT YEAR, THE INSURER MADE AVAILABLE TO ENROLLEES  AT  THE
 POINT  OF SALE AT LEAST A MAJORITY (I.E., GREATER THAN FIFTY PERCENT) OF
 THE REBATES RECEIVED BY SUCH INSURER OR ANY  THIRD  PARTY  ADMINISTERING
 PRESCRIPTION DRUG BENEFITS ON BEHALF OF SUCH INSURER.
   (A) FOR PURPOSES OF THIS PARAGRAPH, "REBATE" MEANS:
   (I)  NEGOTIATED  PRICE  CONCESSIONS  INCLUDING BUT NOT LIMITED TO BASE
 REBATES AND REASONABLE ESTIMATES OF ANY  PRICE  PROTECTION  REBATES  AND
 PERFORMANCE-BASED  REBATES THAT MAY ACCRUE DIRECTLY OR INDIRECTLY TO THE
 ISSUER DURING THE COVERAGE YEAR FROM A MANUFACTURER, DISPENSING  PHARMA-
 CY, OR OTHER PARTY TO THE TRANSACTION, AND
   (II)  REASONABLE  ESTIMATES OF ANY FEES AND OTHER ADMINISTRATIVE COSTS
 THAT ARE PASSED THROUGH TO THE ISSUER AND SERVE TO REDUCE  THE  ISSUER'S
 PRESCRIPTION DRUG LIABILITIES FOR THE COVERAGE YEAR.
   (B)  IN PROVIDING THE CERTIFICATION REQUIRED UNDER THIS SUBSECTION, AN
 ISSUER SHALL NOT PUBLISH OR OTHERWISE REVEAL INFORMATION  REGARDING  THE
 ACTUAL  AMOUNT OF REBATES THE ISSUER RECEIVED ON A PRODUCT-, MANUFACTUR-
 ER- OR PHARMACY-SPECIFIC BASIS. SUCH INFORMATION IS PROTECTED AS A TRADE
 SECRET, IS NOT A PUBLIC RECORD AS DEFINED IN THE PUBLIC OFFICERS LAW AND
 SHALL NOT BE DISCLOSED DIRECTLY OR INDIRECTLY. AN INSURER  SHALL  IMPOSE
 THE  CONFIDENTIALITY PROTECTIONS OF THIS SUBSECTION ON ANY THIRD PARTIES
 OR VENDORS WITH WHICH IT CONTRACTS THAT MAY RECEIVE OR  HAVE  ACCESS  TO
 REBATE INFORMATION.
   § 3. This act shall take effect immediately.

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