NY State Senate Bill 2023-S398

Current 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 13, 2024	print number 398a
Mar 13, 2024	amend and recommit to insurance
Jan 03, 2024	referred to insurance
Jan 04, 2023	referred to insurance

Bill Amendments

Original

A (Active)

co-Sponsors

2023-S398 - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §111-a, Ins L
Versions Introduced in 2021-2022 Legislative Session:: S8901

2023-S398 - Summary

Relates to reducing the cost of prescription drugs by establishing maximum wholesale drug prices that are the same as the prices in Canada.

2023-S398 - Sponsor Memo

                                 
BILL NUMBER: S398

SPONSOR: CLEARE
 
TITLE OF BILL:

An act to amend the insurance law, in relation to requiring a referenced
rate for prescription drugs

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would create a state pilot program to create upper payment
limits on the basis of an international reference price for certain
prescription drugs.

 
SUMMARY OF SPECIFIC PROVISIONS:

The Director of the Employee Benefits Division within the Department of
Civil Service will identify the 5 most costly prescription drugs based
on net price times utilization.

Beginning, in 2023, no later than June 30, the Director will send the
DFS Superintendent the list of the referenced drugs and the total net

spend on each of them for the prior year. By November 1, 2023, the
Superintendent will publish the list of drugs subject to a referenced
rate on the DFS's website. The DFS Superintendent will determine the
referenced rate by comparing the wholesale acquisition cost (WAC), the
price set by the manufacturer for the drug, to the cost from all of the
following sources:

* Ontario Ministry of Health and Long Term Care and most recently
published on the Ontario Drug Benefit Formulary;

* Regie de l'Assurance Maladie du Quebec and most recently published on
the Quebec Public Drug Programs List of Medications;

* British Columbia Ministry of Health and most recently published on the
BC Pharmacare Formulary; and

* Alberta Ministry of Health and most recently published on the Alberta
Drug Benefit List.

The referenced rate will be calculated as the lowest among those
resources and the WAC. If a specific drug is not included in those
resources, the DFS Superintendent will use the ceiling price for drugs
as reported by the Government of Canada Patented Medicine Prices Review
Board.

The DFS Superintendent will calculate the expected savings, and consult
with the Director of the State Employee Health Insurance Plan and the
Chair of the State Board of Pharmacy.

During this pilot study, it will be a violation for a state entity or
health plan to purchase, or a pharmacy to purchase or distribute, the
referenced drugs subject to this pilot program, for a cost higher than
the referenced rate.

Any savings generated must be used to reduce costs to consumers.


By April following the conclusion of the pilot program, the state entity
and/or health plans subject to this pilot program will submit to the DFS
Superintendent a report describing the savings and how those savings
were used to benefit consumers.

By June following the conclusion of the pilot program, the DFS Super-
intendent will issue a report on the savings, if any, of the program,
along with 'recommendations on the feasibility of expanding this program
to other prescription drugs, improvements to the program, and anything
else the Superintendent deems necessary to understand the broader
effects of the program.

Manufacturers will not be able to withdraw a referenced drug from sale
or distribution to avoid the program. If they wish to withdraw a refer-
enced drug, they will need to provide notice to DFS and the AG 180 days
prior to the withdrawal. The DFS Superintendent will assess a penalty on
an entity that it determines has withdrawn a referenced drug in
violation of the program. It will also be a violation for a manufacturer
to refuse to negotiate in good faith with any payor or seller of the
referend drugs at a price that is within the referenced rate. The penal-
ty for both will be $500,000 or the amount of annual savings determined
by the DFS Superintendent, whichever is greater.

 
JUSTIFICATION:

Drug prices in other countries are often many times lower than in the
United States. This bill determines payment rates for certain
prescription drugs based on international prices and establishes the
referenced rate as the upper payment limit for payers within a state.

 
LEGISLATIVE HISTORY:

New Proposal in 2022.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
June 1st, 2023.

2023-S398 - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    398
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2023
                                ___________
 
 Introduced  by  Sens. CLEARE, ADDABBO -- 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 a referenced
   rate for prescription drugs

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. The insurance law is amended by adding a new section 111-a
 to read as follows:
   § 111-A. PILOT PROGRAM ON REFERENCED RATE FOR PRESCRIPTION DRUGS.  (A)
 A  PILOT  PROGRAM IS HEREBY CREATED TO STUDY THE POSSIBILITY OF CONTROL-
 LING EXCESSIVE AND UNCONSCIONABLE PRICES FOR PRESCRIPTION DRUGS.
   (B) DEFINITIONS. AS USED IN THIS SECTION, THE  FOLLOWING  TERMS  SHALL
 HAVE THE FOLLOWING MEANINGS:
   (1)  "PRESCRIPTION DRUG" SHALL HAVE THE SAME MEANING AS IN SUBDIVISION
 SEVEN OF SECTION SIXTY-EIGHT HUNDRED TWO OF THE EDUCATION LAW, FOR WHICH
 A PRESCRIPTION IS REQUIRED UNDER THE FEDERAL  FOOD,  DRUG  AND  COSMETIC
 ACT.  ANY  DRUG THAT DOES NOT REQUIRE A PRESCRIPTION UNDER SUCH ACT, BUT
 WHICH WOULD OTHERWISE MEET THE  CRITERIA  UNDER  ARTICLE  TWO-A  OF  THE
 PUBLIC  HEALTH LAW FOR INCLUSION ON THE PREFERRED DRUG LIST MAY BE ADDED
 TO THE PREFERRED DRUG LIST UNDER ARTICLE TWO-A OF THE PUBLIC HEALTH LAW;
 AND, IF SO INCLUDED, SHALL BE CONSIDERED TO BE A PRESCRIPTION  DRUG  FOR
 PURPOSES  OF  THIS  SECTION;  PROVIDED  THAT  IT  SHALL  BE ELIGIBLE FOR
 REIMBURSEMENT UNDER A STATE PUBLIC HEALTH PLAN WHEN ORDERED BY  A  PRES-
 CRIBER  AUTHORIZED  TO  PRESCRIBE UNDER THE STATE PUBLIC HEALTH PLAN AND
 THE PRESCRIPTION IS SUBJECT TO THE APPLICABLE PROVISIONS OF THIS SECTION
 AND PARAGRAPH (A) OF SUBDIVISION FOUR OF SECTION  THREE  HUNDRED  SIXTY-
 FIVE-A OF THE SOCIAL SERVICES LAW.
   (2)  "WHOLESALE  ACQUISITION  COST"  SHALL  HAVE  THE  SAME MEANING AS
 DEFINED IN 42 U.S.C. § 1395W-3A.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02470-01-3

 S. 398                              2
 
   (3) "STATE ENTITY" MEANS ANY  AGENCY  OF  THE  STATE  GOVERNMENT  THAT
 PURCHASES  PRESCRIPTION  DRUGS ON BEHALF OF THE STATE FOR A PERSON WHOSE
 HEALTH CARE IS PAID FOR BY  THE  STATE,  INCLUDING  ANY  AGENT,  VENDOR,
 FISCAL  AGENT, CONTRACTOR, OR OTHER PARTY ACTING ON BEHALF OF THE STATE.
 "STATE  ENTITY"  SHALL NOT INCLUDE THE MEDICAL ASSISTANCE PROGRAM ESTAB-
 LISHED PURSUANT TO 42 U.S.C. § 1396 ET SEQ.
   (4) "HEALTH PLAN" SHALL HAVE THE SAME MEANING AS DEFINED IN  PARAGRAPH
 (A)  OF  SUBDIVISION  ONE  OF SECTION TWO HUNDRED EIGHTY-A OF THE PUBLIC
 HEALTH LAW.
   (5) "REFERENCED RATE" MEANS THE MAXIMUM RATE ESTABLISHED BY THE SUPER-
 INTENDENT UTILIZING THE WHOLESALE ACQUISITION  COST  AND  OTHER  PRICING
 DATA DESCRIBED IN SUBSECTION (E) OF THIS SECTION.
   (6) "REFERENCED DRUGS" MEANS ANY PRESCRIPTION DRUG SUBJECT TO A REFER-
 ENCED RATE.
   (C) PAYMENT IN EXCESS OF REFERENCED RATE PROHIBITED. (1) IT SHALL BE A
 VIOLATION  OF THIS SECTION FOR A STATE ENTITY OR HEALTH PLAN TO PURCHASE
 THE REFERENCED DRUGS SUBJECT TO THIS PILOT PROGRAM AND  WHICH  SHALL  BE
 DISPENSED  OR  DELIVERED TO A CONSUMER IN THE STATE, WHETHER DIRECTLY OR
 THROUGH A DISTRIBUTOR, FOR A COST HIGHER THAN  THE  REFERENCED  RATE  AS
 DETERMINED PURSUANT TO PARAGRAPH TWO OF SUBSECTION (E) OF THIS SECTION.
   (2)  IT SHALL BE A VIOLATION OF THIS SECTION FOR ANY PHARMACY LICENSED
 IN THIS STATE TO PURCHASE FOR SALE OR DISTRIBUTION REFERENCED DRUGS  FOR
 A COST THAT EXCEEDS THE REFERENCED RATE TO A PERSON WHOSE HEALTH CARE IS
 PROVIDED BY A STATE ENTITY OR HEALTH PLAN.
   (D)  COSTLY  PRESCRIPTION  DRUGS.  AS  PART OF THIS PILOT PROGRAM, THE
 DIRECTOR OF THE EMPLOYEE BENEFITS  DIVISION  WITHIN  THE  DEPARTMENT  OF
 CIVIL  SERVICE  SHALL  IDENTIFY  THE FIVE MOST COSTLY PRESCRIPTION DRUGS
 BASED UPON NET PRICE TIMES UTILIZATION.
   (E) REFERENCED DRUGS DETERMINED. (1) BEGINNING WITH CALENDAR YEAR  TWO
 THOUSAND  TWENTY-FOUR, NO LATER THAN JUNE THIRTIETH, THE DIRECTOR OF THE
 EMPLOYEE BENEFITS DIVISION WITHIN THE DEPARTMENT OF CIVIL SERVICE  SHALL
 TRANSMIT TO THE SUPERINTENDENT THE LIST OF PRESCRIPTION DRUGS REFERENCED
 IN SUBSECTION (D) OF THIS SECTION. FOR EACH OF THESE PRESCRIPTION DRUGS,
 SUCH  DIRECTOR  SHALL  ALSO PROVIDE THE TOTAL NET SPEND ON EACH OF THOSE
 PRESCRIPTION DRUGS FOR THE PREVIOUS CALENDAR YEAR.
   (2) UTILIZING THE INFORMATION  DESCRIBED  IN  PARAGRAPH  ONE  OF  THIS
 SUBSECTION,  NO LATER THAN NOVEMBER FIRST, TWO THOUSAND TWENTY-FOUR, THE
 SUPERINTENDENT SHALL CREATE AND  PUBLISH  A  LIST  ON  THE  DEPARTMENT'S
 WEBSITE OF SUCH DRUGS THAT SHALL BE SUBJECT TO THE REFERENCED RATE.
   (3)  THE SUPERINTENDENT SHALL DETERMINE THE REFERENCED RATE BY COMPAR-
 ING THE WHOLESALE ACQUISITION COST TO THE COST FROM ALL OF THE FOLLOWING
 SOURCES:
   (A) ONTARIO MINISTRY OF HEALTH AND LONG TERM CARE  AND  MOST  RECENTLY
 PUBLISHED ON THE ONTARIO DRUG BENEFIT FORMULARY;
   (B) REGIE DE L'ASSURANCE MALADIE DU QUEBEC AND MOST RECENTLY PUBLISHED
 ON THE QUEBEC PUBLIC DRUG PROGRAMS LIST OF MEDICATIONS;
   (C) BRITISH COLUMBIA MINISTRY OF HEALTH AND MOST RECENTLY PUBLISHED ON
 THE BC PHARMACARE FORMULARY; AND
   (D)  ALBERTA  MINISTRY  OF  HEALTH  AND MOST RECENTLY PUBLISHED ON THE
 ALBERTA DRUG BENEFIT LIST.
   (4) THE REFERENCED RATE FOR EACH PRESCRIPTION DRUG SHALL BE CALCULATED
 AS THE LOWEST COST AMONG THOSE RESOURCES AND THE  WHOLESALE  ACQUISITION
 COST. IF A SPECIFIC REFERENCED DRUG IS NOT INCLUDED WITHIN THE RESOURCES
 DESCRIBED  IN  PARAGRAPH THREE OF THIS SUBSECTION, THEN, FOR THE PURPOSE
 OF DETERMINING THE REFERENCED RATE FOR  THAT  DRUG,  THE  SUPERINTENDENT
 S. 398                              3
 
 SHALL  UTILIZE THE CEILING PRICE FOR DRUGS AS REPORTED BY THE GOVERNMENT
 OF CANADA PATENTED MEDICINE PRICES REVIEW BOARD.
   (5)  THE  SUPERINTENDENT SHALL CALCULATE THE SAVINGS THAT ARE EXPECTED
 TO BE ACHIEVED BY SUBJECTING PRESCRIPTION DRUGS TO THE  REFERENCED  RATE
 FOR ONE PLAN YEAR. IN MAKING THIS DETERMINATION THE SUPERINTENDENT SHALL
 CONSULT  WITH  THE DIRECTOR OF THE EMPLOYEE BENEFITS DIVISION WITHIN THE
 DEPARTMENT OF CIVIL SERVICE AND THE DRUG ACCOUNTABILITY BOARD.
   (6) THE SUPERINTENDENT SHALL PROMULGATE SUCH RULES AND REGULATIONS  AS
 MAY BE NECESSARY TO CARRY OUT THIS PILOT PROGRAM.
   (F)  APPLICATION  OF SAVINGS. (1) ANY SAVINGS GENERATED BECAUSE OF THE
 REQUIREMENTS PURSUANT TO SUBSECTION (C) OF THIS SECTION SHALL BE USED TO
 REDUCE COSTS TO CONSUMERS. ANY STATE ENTITY OR HEALTH PLAN SHALL  CALCU-
 LATE  SUCH SAVINGS AND UTILIZE SUCH SAVINGS DIRECTLY TO REDUCE COSTS FOR
 ITS MEMBERS OR INSUREDS.
   (2) NO LATER THAN APRIL FIRST OF THE CALENDAR YEAR AFTER  THE  CONCLU-
 SION  OF  THE PILOT PROGRAM, EACH STATE ENTITY OR HEALTH PLAN SUBJECT TO
 THIS SECTION SHALL SUBMIT TO THE SUPERINTENDENT A REPORT DESCRIBING  THE
 SAVINGS  ACHIEVED  FOR  EACH  REFERENCED DRUG AND HOW THOSE SAVINGS WERE
 USED TO ACHIEVE THE REQUIREMENTS OF PARAGRAPH ONE  OF  THIS  SUBSECTION.
 THE  SUPERINTENDENT SHALL SUBMIT A REPORT OF THE SAVINGS, IF ANY, OF THE
 PILOT PROGRAM CONDUCTED PURSUANT TO THIS SECTION, TO THE  GOVERNOR,  THE
 TEMPORARY  PRESIDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, AND THE
 MINORITY LEADERS OF THE SENATE AND ASSEMBLY NO LATER  THAN  ONE  HUNDRED
 EIGHTY  DAYS  FOLLOWING  THE CONCLUSION OF THE PLAN YEAR SUBJECT TO THIS
 SECTION. THE REPORT SHALL ALSO INCLUDE RECOMMENDATIONS ON THE  FEASIBIL-
 ITY  OF  EXPANDING THIS PROGRAM TO OTHER PRESCRIPTION DRUGS, RECOMMENDA-
 TIONS ON IMPROVEMENTS TO THE PROGRAM, AND ANY OTHER FINDINGS,  RECOMMEN-
 DATIONS, OR CONCLUSIONS THE SUPERINTENDENT DEEMS NECESSARY TO UNDERSTAND
 THE BROADER EFFECTS OF THIS PILOT PROGRAM.
   (G)  WITHDRAWAL OF REFERENCED DRUGS FOR SALE; PROHIBITED. (1) IT SHALL
 BE A VIOLATION OF THIS SECTION FOR ANY MANUFACTURER OR DISTRIBUTOR OF  A
 REFERENCED  DRUG  TO WITHDRAW THAT DRUG FROM SALE OR DISTRIBUTION WITHIN
 THIS STATE FOR THE PURPOSE OF AVOIDING THE IMPACT OF THIS PILOT PROGRAM.
   (2) ANY MANUFACTURER THAT INTENDS TO WITHDRAW A REFERENCED  DRUG  FROM
 SALE  OR  DISTRIBUTION  FROM  WITHIN THE STATE SHALL PROVIDE A NOTICE OF
 WITHDRAWAL IN WRITING TO THE SUPERINTENDENT AND TO THE ATTORNEY  GENERAL
 NOT LESS THAN ONE HUNDRED EIGHTY DAYS PRIOR TO SUCH WITHDRAWAL.
   (3)  THE  SUPERINTENDENT SHALL ASSESS A PENALTY ON ANY MANUFACTURER OR
 DISTRIBUTOR THAT THEY DETERMINE TO HAVE WITHDRAWN A REFERENCED DRUG FROM
 DISTRIBUTION OR SALE IN THE STATE IN VIOLATION OF PARAGRAPH ONE  OR  TWO
 OF  THIS  SUBSECTION. WITH RESPECT TO EACH REFERENCED DRUG FOR WHICH THE
 SUPERINTENDENT HAS DETERMINED THE MANUFACTURER OR DISTRIBUTOR HAS  WITH-
 DRAWN FROM THE MARKET, THE PENALTY SHALL BE EQUAL TO:
   (A) FIVE HUNDRED THOUSAND DOLLARS; OR
   (B)  THE  AMOUNT OF ANNUAL SAVINGS DETERMINED BY THE SUPERINTENDENT AS
 DESCRIBED IN PARAGRAPH FIVE OF THIS SUBSECTION, WHICHEVER IS GREATER.
   (4) IT SHALL BE A VIOLATION OF THIS SECTION FOR  ANY  MANUFACTURER  OR
 DISTRIBUTOR  OF  A  REFERENCED DRUG TO REFUSE TO NEGOTIATE IN GOOD FAITH
 WITH ANY PAYOR OR SELLER OF PRESCRIPTION DRUGS A PRICE  THAT  IS  WITHIN
 THE  REFERENCED RATE AS DETERMINED IN PARAGRAPH TWO OF SUBSECTION (E) OF
 THIS SECTION.
   (5) THE SUPERINTENDENT SHALL ASSESS A PENALTY ON ANY  MANUFACTURER  OR
 DISTRIBUTOR  THAT IT DETERMINES HAS FAILED TO NEGOTIATE IN GOOD FAITH IN
 VIOLATION OF PARAGRAPH FOUR OF THIS SUBSECTION.  WITH  RESPECT  TO  EACH
 REFERENCED DRUG FOR WHICH THE SUPERINTENDENT HAS DETERMINED THE MANUFAC-
 S. 398                              4
 
 TURER  OR DISTRIBUTOR HAS FAILED TO NEGOTIATE IN GOOD FAITH, THE PENALTY
 SHALL BE EQUAL TO:
   (A) FIVE HUNDRED THOUSAND DOLLARS; OR
   (B)  THE  AMOUNT OF ANNUAL SAVINGS DETERMINED BY THE SUPERINTENDENT AS
 DESCRIBED IN THIS SUBDIVISION, WHICHEVER IS GREATER.
   § 2. This act shall take effect June 1, 2023.  Effective  immediately,
 the  addition,  amendment and/or repeal of any rule or regulation neces-
 sary for the implementation of  this  act  on  its  effective  date  are
 authorized to be made and completed on or before such effective date.

co-Sponsors

2023-S398A (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §111-a, Ins L
Versions Introduced in 2021-2022 Legislative Session:: S8901

2023-S398A (ACTIVE) - Summary

Relates to reducing the cost of prescription drugs by establishing maximum wholesale drug prices that are the same as the prices in Canada.

2023-S398A (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S398A

SPONSOR: CLEARE
 
TITLE OF BILL:

An act to amend the insurance law, in relation to requiring a referenced
rate for prescription drugs

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would create a state pilot program to create upper payment
limits on the basis of an international reference price for certain
prescription drugs.

 
SUMMARY OF SPECIFIC PROVISIONS:

The Director of the Employee Benefits Division within the Department of
Civil Service will identify the 5 most costly prescription drugs based
on net price times utilization.

Beginning, in 2025, no later than June 30, the Director will send the
DFS Superintendent the list of the referenced drugs and the total net

spend on each of them for the prior year. By November 1, 2025, the
Superintendent will publish the list of drugs subject to a referenced
rate on the DFS's website. The DFS Superintendent will determine the
referenced rate by comparing the wholesale acquisition cost (WAC), the
price set by the manufacturer for the drug, to the cost from all of the
following sources:

*Ontario Ministry of Health and Long Term Care and most recently
published on the Ontario Drug Benefit Formulary;

*Regie de ('Assurance Maladie du Quebec and most recently published on
the Quebec Public Drug Programs List of Medications;

*British Columbia Ministry of Health and most recently published on the
BC Pharmacare Formulary; and

*Alberta Ministry of Health and most recently published on the Alberta
Drug Benefit List.

The referenced rate will be calculated as the lowest among those
resources and the WAC. If a specific drug is not included in those
resources, the DFS Superintendent will use the ceiling price for drugs
as reported by the Government of Canada Patented Medicine Prices Review
Board.

The DFS Superintendent will calculate the expected savings, and consult
with the Director of the State Employee Health Insurance Plan and the
Chair of the State Board of Pharmacy.

During this pilot study, it will be a violation for a state entity or
health plan to purchase, or a pharmacy to purchase or distribute, the
referenced drugs subject to this pilot program, for a cost higher than
the referenced rate.

Any savings generated must be used to reduce costs to consumers.


By April following the conclusion of the pilot program, the state entity
and/or health plans subject to this pilot program will submit to the DFS
Superintendent a report describing the savings and how those savings
were used to benefit consumers.

By June following the conclusion of the pilot program, the DFS Super-
intendent will issue a report on the savings, if any, of the program,
along with recommendations on the feasibility of expanding this program
to other prescription drugs, improvements to the program, and anything
else the Superintendent deems necessary to understand the broader
effects of the program.

Manufacturers will not be able to withdraw a referenced drug from sale
or distribution to avoid the program. If they wish to withdraw a refer-
enced drug, they will need to provide notice to DFS and the AG 180 days
prior to the withdrawal.

The DFS Superintendent will assess a penalty on an entity that it deter-
mines has withdrawn a referenced drug in violation of the program. It
will also be a violation for a manufacturer to refuse to negotiate in
good faith with any payor or seller of the referend drugs at a price
that is within the referenced rate. The penalty for both will be
$500,000 or the amount of annual savings determined by the DFS Super-
intendent, whichever is greater.

 
JUSTIFICATION:

Drug prices in other countries are often many times lower than in the
United States. This bill determines payment rates for certain
prescription drugs based on international prices and establishes the
referenced rate as the upper payment limit for payers within a state.

 
PRIOR LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
June 1st, 2024.

2023-S398A (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  398--A
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2023
                                ___________
 
 Introduced  by  Sens. CLEARE, ADDABBO -- read twice and ordered printed,
   and when printed to be committed to  the  Committee  on  Insurance  --
   recommitted  to  the  Committee on Insurance in accordance with Senate
   Rule  6,  sec.  8  --  committee  discharged,  bill  amended,  ordered
   reprinted as amended and recommitted to said committee
 
 AN ACT to amend the insurance law, in relation to requiring a referenced
   rate for prescription drugs
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The insurance law is amended by adding a new section  111-b
 to read as follows:
   §  111-B. PILOT PROGRAM ON REFERENCED RATE FOR PRESCRIPTION DRUGS. (A)
 A PILOT PROGRAM IS HEREBY CREATED TO STUDY THE POSSIBILITY  OF  CONTROL-
 LING EXCESSIVE AND UNCONSCIONABLE PRICES FOR PRESCRIPTION DRUGS.
   (B)  DEFINITIONS.  AS  USED IN THIS SECTION, THE FOLLOWING TERMS SHALL
 HAVE THE FOLLOWING MEANINGS:
   (1) "PRESCRIPTION DRUG" SHALL HAVE THE SAME MEANING AS IN  SUBDIVISION
 SEVEN OF SECTION SIXTY-EIGHT HUNDRED TWO OF THE EDUCATION LAW, FOR WHICH
 A  PRESCRIPTION  IS  REQUIRED  UNDER THE FEDERAL FOOD, DRUG AND COSMETIC
 ACT. ANY DRUG THAT DOES NOT REQUIRE A PRESCRIPTION UNDER SUCH  ACT,  BUT
 WHICH  WOULD  OTHERWISE  MEET  THE  CRITERIA  UNDER ARTICLE TWO-A OF THE
 PUBLIC HEALTH LAW FOR INCLUSION ON THE PREFERRED DRUG LIST MAY BE  ADDED
 TO THE PREFERRED DRUG LIST UNDER ARTICLE TWO-A OF THE PUBLIC HEALTH LAW;
 AND,  IF  SO INCLUDED, SHALL BE CONSIDERED TO BE A PRESCRIPTION DRUG FOR
 PURPOSES OF THIS  SECTION;  PROVIDED  THAT  IT  SHALL  BE  ELIGIBLE  FOR
 REIMBURSEMENT  UNDER  A STATE PUBLIC HEALTH PLAN WHEN ORDERED BY A PRES-
 CRIBER AUTHORIZED TO PRESCRIBE UNDER THE STATE PUBLIC  HEALTH  PLAN  AND
 THE PRESCRIPTION IS SUBJECT TO THE APPLICABLE PROVISIONS OF THIS SECTION
 AND  PARAGRAPH  (A)  OF SUBDIVISION FOUR OF SECTION THREE HUNDRED SIXTY-
 FIVE-A OF THE SOCIAL SERVICES LAW.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD02470-02-4
 S. 398--A                           2
 
   (2) "WHOLESALE ACQUISITION  COST"  SHALL  HAVE  THE  SAME  MEANING  AS
 DEFINED IN 42 U.S.C. § 1395W-3A.
   (3)  "STATE  ENTITY"  MEANS  ANY  AGENCY  OF THE STATE GOVERNMENT THAT
 PURCHASES PRESCRIPTION DRUGS ON BEHALF OF THE STATE FOR A  PERSON  WHOSE
 HEALTH  CARE  IS  PAID  FOR  BY  THE STATE, INCLUDING ANY AGENT, VENDOR,
 FISCAL AGENT, CONTRACTOR, OR OTHER PARTY ACTING ON BEHALF OF THE  STATE.
 "STATE  ENTITY"  SHALL NOT INCLUDE THE MEDICAL ASSISTANCE PROGRAM ESTAB-
 LISHED PURSUANT TO 42 U.S.C. § 1396 ET SEQ.
   (4) "HEALTH PLAN" SHALL HAVE THE SAME MEANING AS DEFINED IN  PARAGRAPH
 (A)  OF  SUBDIVISION  ONE  OF SECTION TWO HUNDRED EIGHTY-A OF THE PUBLIC
 HEALTH LAW.
   (5) "REFERENCED RATE" MEANS THE MAXIMUM RATE ESTABLISHED BY THE SUPER-
 INTENDENT UTILIZING THE WHOLESALE ACQUISITION  COST  AND  OTHER  PRICING
 DATA DESCRIBED IN SUBSECTION (E) OF THIS SECTION.
   (6) "REFERENCED DRUGS" MEANS ANY PRESCRIPTION DRUG SUBJECT TO A REFER-
 ENCED RATE.
   (C) PAYMENT IN EXCESS OF REFERENCED RATE PROHIBITED. (1) IT SHALL BE A
 VIOLATION  OF THIS SECTION FOR A STATE ENTITY OR HEALTH PLAN TO PURCHASE
 THE REFERENCED DRUGS SUBJECT TO THIS PILOT PROGRAM AND  WHICH  SHALL  BE
 DISPENSED  OR  DELIVERED TO A CONSUMER IN THE STATE, WHETHER DIRECTLY OR
 THROUGH A DISTRIBUTOR, FOR A COST HIGHER THAN  THE  REFERENCED  RATE  AS
 DETERMINED PURSUANT TO PARAGRAPH TWO OF SUBSECTION (E) OF THIS SECTION.
   (2)  IT SHALL BE A VIOLATION OF THIS SECTION FOR ANY PHARMACY LICENSED
 IN THIS STATE TO PURCHASE FOR SALE OR DISTRIBUTION REFERENCED DRUGS  FOR
 A COST THAT EXCEEDS THE REFERENCED RATE TO A PERSON WHOSE HEALTH CARE IS
 PROVIDED BY A STATE ENTITY OR HEALTH PLAN.
   (D)  COSTLY  PRESCRIPTION  DRUGS.  AS  PART OF THIS PILOT PROGRAM, THE
 DIRECTOR OF THE EMPLOYEE BENEFITS  DIVISION  WITHIN  THE  DEPARTMENT  OF
 CIVIL  SERVICE  SHALL  IDENTIFY  THE FIVE MOST COSTLY PRESCRIPTION DRUGS
 BASED UPON NET PRICE TIMES UTILIZATION.
   (E) REFERENCED DRUGS DETERMINED. (1) BEGINNING WITH CALENDAR YEAR  TWO
 THOUSAND  TWENTY-FIVE, NO LATER THAN JUNE THIRTIETH, THE DIRECTOR OF THE
 EMPLOYEE BENEFITS DIVISION WITHIN THE DEPARTMENT OF CIVIL SERVICE  SHALL
 TRANSMIT TO THE SUPERINTENDENT THE LIST OF PRESCRIPTION DRUGS REFERENCED
 IN SUBSECTION (D) OF THIS SECTION. FOR EACH OF THESE PRESCRIPTION DRUGS,
 SUCH  DIRECTOR  SHALL  ALSO PROVIDE THE TOTAL NET SPEND ON EACH OF THOSE
 PRESCRIPTION DRUGS FOR THE PREVIOUS CALENDAR YEAR.
   (2) UTILIZING THE INFORMATION  DESCRIBED  IN  PARAGRAPH  ONE  OF  THIS
 SUBSECTION,  NO LATER THAN NOVEMBER FIRST, TWO THOUSAND TWENTY-FIVE, THE
 SUPERINTENDENT SHALL CREATE AND  PUBLISH  A  LIST  ON  THE  DEPARTMENT'S
 WEBSITE OF SUCH DRUGS THAT SHALL BE SUBJECT TO THE REFERENCED RATE.
   (3)  THE SUPERINTENDENT SHALL DETERMINE THE REFERENCED RATE BY COMPAR-
 ING THE WHOLESALE ACQUISITION COST TO THE COST FROM ALL OF THE FOLLOWING
 SOURCES:
   (A) ONTARIO MINISTRY OF HEALTH AND LONG TERM CARE  AND  MOST  RECENTLY
 PUBLISHED ON THE ONTARIO DRUG BENEFIT FORMULARY;
   (B) REGIE DE L'ASSURANCE MALADIE DU QUEBEC AND MOST RECENTLY PUBLISHED
 ON THE QUEBEC PUBLIC DRUG PROGRAMS LIST OF MEDICATIONS;
   (C) BRITISH COLUMBIA MINISTRY OF HEALTH AND MOST RECENTLY PUBLISHED ON
 THE BC PHARMACARE FORMULARY; AND
   (D)  ALBERTA  MINISTRY  OF  HEALTH  AND MOST RECENTLY PUBLISHED ON THE
 ALBERTA DRUG BENEFIT LIST.
   (4) THE REFERENCED RATE FOR EACH PRESCRIPTION DRUG SHALL BE CALCULATED
 AS THE LOWEST COST AMONG THOSE RESOURCES AND THE  WHOLESALE  ACQUISITION
 COST. IF A SPECIFIC REFERENCED DRUG IS NOT INCLUDED WITHIN THE RESOURCES
 DESCRIBED  IN  PARAGRAPH THREE OF THIS SUBSECTION, THEN, FOR THE PURPOSE
 S. 398--A                           3
 
 OF DETERMINING THE REFERENCED RATE FOR  THAT  DRUG,  THE  SUPERINTENDENT
 SHALL  UTILIZE THE CEILING PRICE FOR DRUGS AS REPORTED BY THE GOVERNMENT
 OF CANADA PATENTED MEDICINE PRICES REVIEW BOARD.
   (5)  THE  SUPERINTENDENT SHALL CALCULATE THE SAVINGS THAT ARE EXPECTED
 TO BE ACHIEVED BY SUBJECTING PRESCRIPTION DRUGS TO THE  REFERENCED  RATE
 FOR ONE PLAN YEAR. IN MAKING THIS DETERMINATION THE SUPERINTENDENT SHALL
 CONSULT  WITH  THE DIRECTOR OF THE EMPLOYEE BENEFITS DIVISION WITHIN THE
 DEPARTMENT OF CIVIL SERVICE AND THE DRUG ACCOUNTABILITY BOARD.
   (6) THE SUPERINTENDENT SHALL PROMULGATE SUCH RULES AND REGULATIONS  AS
 MAY BE NECESSARY TO CARRY OUT THIS PILOT PROGRAM.
   (F)  APPLICATION  OF SAVINGS. (1) ANY SAVINGS GENERATED BECAUSE OF THE
 REQUIREMENTS PURSUANT TO SUBSECTION (C) OF THIS SECTION SHALL BE USED TO
 REDUCE COSTS TO CONSUMERS. ANY STATE ENTITY OR HEALTH PLAN SHALL  CALCU-
 LATE  SUCH SAVINGS AND UTILIZE SUCH SAVINGS DIRECTLY TO REDUCE COSTS FOR
 ITS MEMBERS OR INSUREDS.
   (2) NO LATER THAN APRIL FIRST OF THE CALENDAR YEAR AFTER  THE  CONCLU-
 SION  OF  THE PILOT PROGRAM, EACH STATE ENTITY OR HEALTH PLAN SUBJECT TO
 THIS SECTION SHALL SUBMIT TO THE SUPERINTENDENT A REPORT DESCRIBING  THE
 SAVINGS  ACHIEVED  FOR  EACH  REFERENCED DRUG AND HOW THOSE SAVINGS WERE
 USED TO ACHIEVE THE REQUIREMENTS OF PARAGRAPH ONE  OF  THIS  SUBSECTION.
 THE  SUPERINTENDENT SHALL SUBMIT A REPORT OF THE SAVINGS, IF ANY, OF THE
 PILOT PROGRAM CONDUCTED PURSUANT TO THIS SECTION, TO THE  GOVERNOR,  THE
 TEMPORARY  PRESIDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, AND THE
 MINORITY LEADERS OF THE SENATE AND ASSEMBLY NO LATER  THAN  ONE  HUNDRED
 EIGHTY  DAYS  FOLLOWING  THE CONCLUSION OF THE PLAN YEAR SUBJECT TO THIS
 SECTION. THE REPORT SHALL ALSO INCLUDE RECOMMENDATIONS ON THE  FEASIBIL-
 ITY  OF  EXPANDING THIS PROGRAM TO OTHER PRESCRIPTION DRUGS, RECOMMENDA-
 TIONS ON IMPROVEMENTS TO THE PROGRAM, AND ANY OTHER FINDINGS,  RECOMMEN-
 DATIONS, OR CONCLUSIONS THE SUPERINTENDENT DEEMS NECESSARY TO UNDERSTAND
 THE BROADER EFFECTS OF THIS PILOT PROGRAM.
   (G)  WITHDRAWAL OF REFERENCED DRUGS FOR SALE; PROHIBITED. (1) IT SHALL
 BE A VIOLATION OF THIS SECTION FOR ANY MANUFACTURER OR DISTRIBUTOR OF  A
 REFERENCED  DRUG  TO WITHDRAW THAT DRUG FROM SALE OR DISTRIBUTION WITHIN
 THIS STATE FOR THE PURPOSE OF AVOIDING THE IMPACT OF THIS PILOT PROGRAM.
   (2) ANY MANUFACTURER THAT INTENDS TO WITHDRAW A REFERENCED  DRUG  FROM
 SALE  OR  DISTRIBUTION  FROM  WITHIN THE STATE SHALL PROVIDE A NOTICE OF
 WITHDRAWAL IN WRITING TO THE SUPERINTENDENT AND TO THE ATTORNEY  GENERAL
 NOT LESS THAN ONE HUNDRED EIGHTY DAYS PRIOR TO SUCH WITHDRAWAL.
   (3)  THE  SUPERINTENDENT SHALL ASSESS A PENALTY ON ANY MANUFACTURER OR
 DISTRIBUTOR THAT THEY DETERMINE TO HAVE WITHDRAWN A REFERENCED DRUG FROM
 DISTRIBUTION OR SALE IN THE STATE IN VIOLATION OF PARAGRAPH ONE  OR  TWO
 OF  THIS  SUBSECTION. WITH RESPECT TO EACH REFERENCED DRUG FOR WHICH THE
 SUPERINTENDENT HAS DETERMINED THE MANUFACTURER OR DISTRIBUTOR HAS  WITH-
 DRAWN FROM THE MARKET, THE PENALTY SHALL BE EQUAL TO:
   (A) FIVE HUNDRED THOUSAND DOLLARS; OR
   (B)  THE  AMOUNT OF ANNUAL SAVINGS DETERMINED BY THE SUPERINTENDENT AS
 DESCRIBED IN PARAGRAPH FIVE OF THIS SUBSECTION, WHICHEVER IS GREATER.
   (4) IT SHALL BE A VIOLATION OF THIS SECTION FOR  ANY  MANUFACTURER  OR
 DISTRIBUTOR  OF  A  REFERENCED DRUG TO REFUSE TO NEGOTIATE IN GOOD FAITH
 WITH ANY PAYOR OR SELLER OF PRESCRIPTION DRUGS A PRICE  THAT  IS  WITHIN
 THE  REFERENCED RATE AS DETERMINED IN PARAGRAPH TWO OF SUBSECTION (E) OF
 THIS SECTION.
   (5) THE SUPERINTENDENT SHALL ASSESS A PENALTY ON ANY  MANUFACTURER  OR
 DISTRIBUTOR  THAT IT DETERMINES HAS FAILED TO NEGOTIATE IN GOOD FAITH IN
 VIOLATION OF PARAGRAPH FOUR OF THIS SUBSECTION.  WITH  RESPECT  TO  EACH
 REFERENCED DRUG FOR WHICH THE SUPERINTENDENT HAS DETERMINED THE MANUFAC-
 S. 398--A                           4
 
 TURER  OR DISTRIBUTOR HAS FAILED TO NEGOTIATE IN GOOD FAITH, THE PENALTY
 SHALL BE EQUAL TO:
   (A) FIVE HUNDRED THOUSAND DOLLARS; OR
   (B)  THE  AMOUNT OF ANNUAL SAVINGS DETERMINED BY THE SUPERINTENDENT AS
 DESCRIBED IN THIS SUBDIVISION, WHICHEVER IS GREATER.
   § 2. This act shall take effect June 1, 2024.  Effective  immediately,
 the  addition,  amendment and/or repeal of any rule or regulation neces-
 sary for the implementation of  this  act  on  its  effective  date  are
 authorized to be made and completed on or before such effective date.

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Senate Bill S398

Sponsored By

Current Bill Status - In Senate Committee Insurance Committee

Bill Amendments

co-Sponsors

2023-S398 - Details

2023-S398 - Summary

2023-S398 - Sponsor Memo

2023-S398 - Bill Text download pdf

co-Sponsors

2023-S398A (ACTIVE) - Details

2023-S398A (ACTIVE) - Summary

2023-S398A (ACTIVE) - Sponsor Memo

2023-S398A (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S398

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Sponsored By

Cordell Cleare

Current Bill Status - In Senate Committee Insurance Committee

Bill Amendments

co-Sponsors

Joseph P. Addabbo Jr.

2023-S398 - Details

2023-S398 - Summary

2023-S398 - Sponsor Memo

2023-S398 - Bill Text download pdf

co-Sponsors

Joseph P. Addabbo Jr.

Jabari Brisport

Julia Salazar

2023-S398A (ACTIVE) - Details

2023-S398A (ACTIVE) - Summary

2023-S398A (ACTIVE) - Sponsor Memo

2023-S398A (ACTIVE) - Bill Text download pdf

Comments