BILL NUMBER: S9040REVISED 4/15/24

SPONSOR: GOUNARDES
 
TITLE OF BILL:

An act to amend the public health law, in relation to prohibiting phar-
macy benefit managers from penalizing pharmacies for providing customers
certain information relating to the costs of prescription medications

 
PURPOSE OR GENERAL IDEA OF BILL:

To allow pharmacies to disclose prescription drug costs and reimburse-
ment rates.

 
SUMMARY OF PROVISIONS:

Section one of this bill amends subdivision five of section 280-a of
Public Health Law to allow pharmacists to discuss the cost of a
patient's medication of service to the pharmacy from a manufacturer or
pharmacy benefit manager with said patient.

Section two sets the effective date.
              

 
JUSTIFICATION:

In 2018, New York State enacted a law to prevent pharmacy benefit manag-
ers (PBMs) from penalizing pharmacies that inform customers when a
prescription will be cheaper out-of-pocket instead of being run through
their insurance. This law took the first step to removing the "gag
clause" for pharmacists by ensuring that they could also discuss copays,
the availability of therapeutically equivalent alternative medications,
or alternative methods of procuring a medication with their patients.
These changes helped ensure greater transparency while also allowing
patients to receive the lowest cost for their medication.

This bill builds upon the prior reform by further improving the "gag
clause" in Section 280-a of Public Health Law to provide that pharma-
cists can also discuss the pharmacy's own reimbursement rates on a
patient's medication or services. The reasoning for this change is that,
under current law, pharmacists cannot tell a patient that a particular
drug or service will result in a negative reimbursement for a pharmacy,
despite the fact that such reimbursement is likely the reason that the
pharmacist is not able to stock the patient's medication. This leads to
a patient access problem for customers who are left none the wiser about
why they can't procure a needed medication.

This is not the case in other industries or sectors, however. A store
selling electronic consumer goods, for example, is allowed to tell its
customers that a manufacturer charges too much for a given television
for it to make economic sense for the store to stock it.

A 2024 report by the Community Oncology Alliance found that PBMs
routinely reimburse pharmacies below the cost of doing business, endan-
gering their ability to provide proper care and lifesaving medications
to the communities they serve. To ensure pharmacies, particularly small
and independent pharmacies, can continue to operate, it is imperative
that greater transparency measures are in place. This legislation would
further protect pharmacies from penalties imposed by PBMs for discussing
prescription drug costs to the pharmacy and their reimbursement rates.
 
PRIOR LEGISLATIVE HISTORY:

None

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
Immediate