S T A T E O F N E W Y O R K
________________________________________________________________________
5939--A
2025-2026 Regular Sessions
I N S E N A T E
March 4, 2025
___________
Introduced by Sens. SKOUFIS, ADDABBO, FAHY, FERNANDEZ, GALLIVAN, GRIFFO,
HINCHEY, MARTINS, MAYER, RIVERA, C. RYAN, SCARCELLA-SPANTON, STAVISKY
-- read twice and ordered printed, and when printed to be committed to
the Committee on Health -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the public health law and the insurance law, in relation
to payments by pharmacy benefit managers to participating pharmacies
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision 1 of section 280-a of the public health law is
amended by adding two new paragraphs (j) and (k) to read as follows:
(J) "PHARMACY ACQUISITION COST RATE" MEANS THE COST PAID BY A PARTIC-
IPATING PHARMACY TO ACQUIRE GENERIC, BRAND NAME DRUGS, OR BIOLOGIC
PRODUCTS, OR DRUGS PRODUCED THROUGH GENETIC TECHNOLOGY OR BIOPHARMACEU-
TICAL PROCESSES PURSUANT TO COST INVOICES FROM THE PHARMACY.
(K) "NATIONAL AVERAGE DRUG ACQUISITION COST" MEANS THE MONTHLY SURVEY
OF RETAIL PHARMACIES CONDUCTED BY THE FEDERAL CENTERS FOR MEDICARE AND
MEDICAID SERVICES (CMS) TO DETERMINE AVERAGE ACQUISITION COST FOR MEDI-
CAID COVERED OUTPATIENT DRUGS.
§ 2. Subdivision 3 of section 280-a of the public health law, as
amended by chapter 128 of the laws of 2022, is amended to read as
follows:
3. Prescriptions. (A) A pharmacy benefit manager may not substitute or
cause the substituting of one prescription drug for another in dispens-
ing a prescription, or alter or cause the altering of the terms of a
prescription, except with the approval of the prescriber or as explicit-
ly required or permitted by law, including regulations of the department
of financial services or the department of health. The superintendent
and commissioner, in coordination with each other, are authorized to
promulgate regulations to determine when substitution of prescription
drugs may be required or permitted. PROVIDED, HOWEVER, THIS PARAGRAPH
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01972-05-5
S. 5939--A 2
SHALL NOT APPLY TO PRESCRIPTIONS OR PRESCRIPTION DRUGS DISTRIBUTED, OR
PAID FOR IN WHOLE OR IN PART, BY A TRUST FUND ESTABLISHED OR MAINTAINED
UNDER THE LABOR MANAGEMENT RELATIONS ACT (29 U.S. CODE § 186), PURSUANT
TO COVERAGE REQUIRED BY THE TERMS OF A COLLECTIVE BARGAINING AGREEMENT
BETWEEN AN EMPLOYER AND A LABOR ORGANIZATION OR CERTIFIED EMPLOYEE
ORGANIZATION; OR PURSUANT TO A HEALTH PLAN, WELFARE FUND, PHARMACEUTICAL
PLAN, OR OTHER FORM OF MEDICAL OR PRESCRIPTION COVERAGE ESTABLISHED,
ADOPTED, UTILIZED, FUNDED, OR AGREED UPON BY AN EMPLOYER AND A LABOR
ORGANIZATION OR CERTIFIED EMPLOYEE ORGANIZATION PURSUANT TO A COLLECTIVE
BARGAINING AGREEMENT; OR, WHERE THE PLAN, COVERAGE, FUND, OR PROGRAM HAS
BEEN COLLECTIVELY BARGAINED AND PERTAINS TO A SPONSORED MULTI-EMPLOYER
PLAN, INCLUDING BUT NOT LIMITED TO, PLANS DEVELOPED UNDER ARTICLE FIVE-G
OF THE GENERAL MUNICIPAL LAW, ARTICLES FORTY-FOUR AND FORTY-SEVEN OF THE
INSURANCE LAW, OR ANY PLANS CREATED PURSUANT TO THE INTERNAL REVENUE
CODE, EMPLOYEE RETIREMENT INCOME SECURITY ACT OR ANY APPLICABLE FEDERAL
STATUTE THAT PROVIDES SUCH BENEFITS TO EMPLOYEE AND RETIREE GROUPS.
(B) TO THE EXTENT PERMITTED UNDER FEDERAL LAW, A PHARMACY BENEFIT
MANAGER SHALL PAY A PARTICIPATING PHARMACY AT MINIMUM AT THE NATIONAL
AVERAGE DRUG ACQUISITION COST (NADAC) RATE OR AT THE PHARMACY ACQUISI-
TION COST RATE IF THERE IS NOT A NADAC RATE, PLUS A PROFESSIONAL
DISPENSING FEE THAT IS AT MINIMUM THE PROFESSIONAL DISPENSING FEE PAID
UNDER THE STATE MEDICAL ASSISTANCE PROGRAM. FOR GENERIC, BRAND NAME
MEDICATIONS, BIOLOGIC PRODUCTS, OR DRUGS PRODUCED THROUGH GENETIC TECH-
NOLOGY OR BIOPHARMACEUTICAL PROCESSES AS REQUIRED BY A MANUFACTURER, A
FEDERAL OR STATE REGULATORY AGENCY, OR ACCREDITING BODY THAT REQUIRE
UNIQUE HANDLING, DISTRIBUTION OR ADMINISTRATION, IN-DEPTH PATIENT TEACH-
ING, COORDINATION OF CARE, OR FREQUENT OR SPECIAL MONITORING TO ENSURE
SUCCESSFUL USE, SPECIAL PACKAGING, SHIPPING OR OTHER COSTS TO BE
INCURRED BY THE PHARMACY FOR THE DISPENSING PROCESS THAT IS GREATER THAN
THE PROFESSIONAL DISPENSING FEE PAID BY THE STATE MEDICAL ASSISTANCE
PROGRAM, PARTICIPATING PHARMACIES SHALL BE PAID A PROFESSIONAL DISPENS-
ING FEE FOR THESE COSTS TO ENSURE A PARTICIPATING PHARMACY IS NOT PAID
LESS THAN ITS COST TO ACQUIRE AND DISPENSE MEDICATIONS. A PHARMACY
BENEFIT MANAGER SHALL NOT PAY A PARTICIPATING PHARMACY BELOW ITS PHARMA-
CY ACQUISITION COST BUT MAY REQUIRE DEMONSTRATION OF SUCH COST THROUGH
THE PROVISION OF PHARMACY INVOICES. PROVIDED, HOWEVER, THIS PARAGRAPH
SHALL NOT APPLY TO PRESCRIPTIONS, PRESCRIPTION DRUGS, OR PAYMENTS FOR
PRESCRIPTION DRUGS, DISTRIBUTED, OR PAID FOR IN WHOLE OR IN PART, BY A
TRUST FUND ESTABLISHED OR MAINTAINED UNDER THE LABOR MANAGEMENT
RELATIONS ACT (29 U.S. CODE § 186), PURSUANT TO COVERAGE REQUIRED BY THE
TERMS OF A COLLECTIVE BARGAINING AGREEMENT BETWEEN AN EMPLOYER AND A
LABOR ORGANIZATION OR CERTIFIED EMPLOYEE ORGANIZATION; OR PURSUANT TO A
HEALTH PLAN, WELFARE FUND, PHARMACEUTICAL PLAN, OR OTHER FORM OF MEDICAL
OR PRESCRIPTION COVERAGE ESTABLISHED, ADOPTED, UTILIZED, FUNDED, OR
AGREED UPON BY AN EMPLOYER AND A LABOR ORGANIZATION OR CERTIFIED EMPLOY-
EE ORGANIZATION PURSUANT TO A COLLECTIVE BARGAINING AGREEMENT; OR, WHERE
THE PLAN, COVERAGE, FUND, OR PROGRAM HAS BEEN COLLECTIVELY BARGAINED AND
PERTAINS TO A SPONSORED MULTI-EMPLOYER PLAN, INCLUDING BUT NOT LIMITED
TO, PLANS DEVELOPED UNDER ARTICLE FIVE-G OF THE GENERAL MUNICIPAL LAW,
ARTICLES FORTY-FOUR AND FORTY-SEVEN OF THE INSURANCE LAW, OR ANY PLANS
CREATED PURSUANT TO THE INTERNAL REVENUE CODE, EMPLOYEE RETIREMENT
INCOME SECURITY ACT OR ANY APPLICABLE FEDERAL STATUTE THAT PROVIDES SUCH
BENEFITS TO EMPLOYEE AND RETIREE GROUPS.
§ 3. The opening paragraph of subdivision 4 of section 280-a of the
public health law, as added by chapter 828 of the laws of 2021, is
amended to read as follows:
S. 5939--A 3
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,
BRAND NAME, AND BIOLOGIC PRODUCT, AND DRUGS PRODUCED THROUGH GENETIC
TECHNOLOGY OR BIOPHARMACEUTICAL PROCESSES drug pricing. The appeals
process shall include the following provisions:
§ 4. Section 2911 of the insurance law is amended by adding a new
subsection (d) to read as follows:
(D) TO THE EXTENT PERMITTED UNDER FEDERAL LAW, A PHARMACY BENEFIT
MANAGER SHALL PAY A PARTICIPATING PHARMACY AT MINIMUM AT THE NATIONAL
AVERAGE DRUG ACQUISITION COST (NADAC) RATE, AS DEFINED IN SUBDIVISION
ONE OF SECTION TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW, OR AT THE
PHARMACY ACQUISITION COST RATE, AS DEFINED IN SUBDIVISION ONE OF SECTION
TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW, IF THERE IS NOT A NADAC
RATE, PLUS A PROFESSIONAL DISPENSING FEE THAT IS AT MINIMUM THE PROFES-
SIONAL DISPENSING FEE PAID UNDER THE STATE MEDICAL ASSISTANCE PROGRAM.
FOR GENERIC, BRAND NAME MEDICATIONS, BIOLOGIC PRODUCTS, OR DRUGS
PRODUCED THROUGH GENETIC TECHNOLOGY OR BIOPHARMACEUTICAL PROCESSES AS
REQUIRED BY A MANUFACTURER, A FEDERAL OR STATE REGULATORY AGENCY, OR
ACCREDITING BODY THAT REQUIRE UNIQUE HANDLING, DISTRIBUTION OR ADMINIS-
TRATION, IN-DEPTH PATIENT TEACHING, COORDINATION OF CARE, OR FREQUENT OR
SPECIAL MONITORING TO ENSURE SUCCESSFUL USE, SPECIAL PACKAGING, SHIPPING
OR OTHER COSTS TO BE INCURRED BY THE PHARMACY FOR THE DISPENSING PROCESS
THAT IS GREATER THAN THE PROFESSIONAL DISPENSING FEE PAID BY THE STATE
MEDICAL ASSISTANCE PROGRAM, PARTICIPATING PHARMACIES SHALL BE PAID A
PROFESSIONAL DISPENSING FEE FOR THESE COSTS TO ENSURE A PARTICIPATING
PHARMACY IS NOT PAID LESS THAN ITS COST TO ACQUIRE AND DISPENSE MEDICA-
TIONS. A PHARMACY BENEFIT MANAGER SHALL NOT PAY A PARTICIPATING PHARMACY
BELOW ITS PHARMACY ACQUISITION COST BUT MAY REQUIRE DEMONSTRATION OF
SUCH COST THROUGH THE PROVISION OF PHARMACY INVOICES. 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 ADMINISTRA-
TIVE ORGANIZATION, INCLUDE A REASONABLE PROCESS TO APPEAL, INVESTIGATE
AND RESOLVE DISPUTES REGARDING MULTI-SOURCE GENERIC, BRAND NAME, BIOLOG-
IC PRODUCT, AND DRUGS PRODUCED THROUGH GENETIC TECHNOLOGY OR BIOPHARMA-
CEUTICAL PROCESSES DRUG PRICING. THE APPEALS PROCESS SHALL BE CONSIDERED
WITHIN THE EXISTING APPEALS PROCESS UNDER SECTION TWO HUNDRED EIGHTY-A
OF THE PUBLIC HEALTH LAW. PROVIDED, HOWEVER, THIS PARAGRAPH SHALL NOT
APPLY TO PRESCRIPTIONS, PRESCRIPTION DRUGS, OR PAYMENTS FOR PRESCRIPTION
DRUGS, DISTRIBUTED, OR PAID FOR IN WHOLE OR IN PART, BY A TRUST FUND
ESTABLISHED OR MAINTAINED UNDER THE LABOR MANAGEMENT RELATIONS ACT (29
U.S. CODE § 186), PURSUANT TO COVERAGE REQUIRED BY THE TERMS OF A
COLLECTIVE BARGAINING AGREEMENT BETWEEN AN EMPLOYER AND A LABOR ORGAN-
IZATION OR CERTIFIED EMPLOYEE ORGANIZATION; OR PURSUANT TO A HEALTH
PLAN, WELFARE FUND, PHARMACEUTICAL PLAN, OR OTHER FORM OF MEDICAL OR
PRESCRIPTION COVERAGE ESTABLISHED, ADOPTED, UTILIZED, FUNDED, OR AGREED
UPON BY AN EMPLOYER AND A LABOR ORGANIZATION OR CERTIFIED EMPLOYEE
ORGANIZATION PURSUANT TO A COLLECTIVE BARGAINING AGREEMENT; OR, WHERE
THE PLAN, COVERAGE, FUND, OR PROGRAM HAS BEEN COLLECTIVELY BARGAINED AND
PERTAINS TO A SPONSORED MULTI-EMPLOYER PLAN, INCLUDING BUT NOT LIMITED
TO, PLANS DEVELOPED UNDER ARTICLE FIVE-G OF THE GENERAL MUNICIPAL LAW,
ARTICLES FORTY-FOUR AND FORTY-SEVEN OF THE INSURANCE LAW, OR ANY PLANS
CREATED PURSUANT TO THE INTERNAL REVENUE CODE, EMPLOYEE RETIREMENT
S. 5939--A 4
INCOME SECURITY ACT OR ANY APPLICABLE FEDERAL STATUTE THAT PROVIDES SUCH
BENEFITS TO EMPLOYEE AND RETIREE GROUPS.
§ 5. This act shall take effect January 1, 2026 and shall apply to all
policies and contracts issued, renewed, modified, altered or amended on
and after such date.
