BILL NUMBER: S6323

SPONSOR: SCARCELLA-SPANTON
 
TITLE OF BILL:

An act to amend the social services law, in relation to determining the
amount paid to a pharmacy for certain high cost drugs

 
PURPOSE:

Provides for a reimbursement for high cost drugs using the federally
recognized threshold, medications that cost over $670 must be reimbursed
at a rate of NADAC price + 2.5% + the $10.08 dispensing fee.

 
SUMMARY OF PROVISIONS:

Paragraph (b) of subdivision 9 of section 367-a of the social services
law is amended by adding a new paragraph (iv) - set high cost drug as
having a national average drug acquisition cost set by the federal
government for Medicaid/Medicare in excess of $675 the actual amount
paid to a pharmacy shall be no more than 2 1/2 % of the total cost, plus
reasonable administrative costs and dispensing fees.
              

 
EXISTING LAW:

The State Department of Health pays the pharmacist according to a formu-
la. Under fee for service, the formula has been streamlined into a
"1-size-fits-all approach": NADAC + $10.08. Then, once that amount is
calculated, the State "claws back" 1.5% of the total reimbursement.

 
JUSTIFICATION:

Pharmacy drug pricing has become both complicated and convoluted.
Essentially, a pharmacist purchases a drug from a wholesaler, holds the
drug in inventory until a prescription is presented for that drug. When
the patient receives the drug, s/he is responsible for the applicable
co-pay (However, if a Medicaid patient claims an inability to pay, the
pharmacist must waive it and absorb the loss for prescription to be
dispensed). The pharmacist is out the money paid for the drug, and now
must purchase the drug to replace it in stock.  The pharmacist must then
wait for the Medicaid program to pay for the drug that the patient
received. The pharmacist is not paid according to the actual price paid
for the drug. Rather, the State Department of Health pays the pharmacist
according to a formula. Under fee for service, the formula has been
streamlined into a "1-size-fits-all approach": NADAC + $10.08. Then,
once that amount is calculated, the State "claws back" 1.5% of the total
reimbursement.

It is unrealistic to ask independent pharmacies, which are also small
businesses, to purchase these drugs from wholesalers, stock and provide
them to patients, only to lose money. In order to ensure patient access
to these needed medications, New Yorkers deserve a tiered pharmacy
reimbursement system. Using the federally recognized threshold, medica-
tions that cost over $670 must be reimbursed at a rate of NADAC price +
2.5% + the $10.08 dispensing fee. Most importantly, the patients who
need these medications will continue to have access.

 
LEGISLATIVE HISTORY:

2024; Held in Senate Health Committee.

 
FISCAL IMPLICATIONS:

To be determined

 
EFFECTIVE DATE:
This act shall take effect immediately; provided, however, that the
amendments to subdivision 9 of section 367-a of the social services law
made by section one of this act shall not affect the expiration of such
subdivision and shall be deemed to expire herewith.