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Sponsors
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History
- Referred to health
- Referred to health
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the public health law, in relation to prohibiting pharmacy benefit managers, health maintenance organizations, insurers and other health plans from offering incentives to health care providers to switch a patient from a specific prescription drug to another specific drug, excluding generic substitution
Purpose or general idea of the bill
The bill prohibits pharmacy benefit managers ("PBMs") and health plans (including HMOs, licensed insurers and employer groups that offer pharmacy benefit to their beneficiaries and subscribers) from offering or paying health providers incentives to induce changing a patient's prescription when the change would substitute a therapeutic alternative to the originally prescribed drug; that is, when the change would substitute a single source or multi-source drug that is a different chemical entity from the original drug and not its generic or therapeutic equivalent. The bill also prohibits payments to health care providers of monetary incentives, or the use of other payment methodologies (such as withholds) to promote compliance with a plan's direction to prescribe a specific prescription drug product, as well as with formulary or other guidelines for drug selection.
Summary of specific provisions
This bill adds a new Article to the Public Health Law, Article 2-B, to proscribe payments by the PBMs and health plans for the purpose of inducing physicians to switch patients off their current medications.
Read the full memo (720 words)
Section one defines a "prescription drug switch" as the direction by a PBM of health plan to a health care provider to change a patient's existing prescription to a different medication that is not the generic or therapeutic equivalent of the original prescription.
Section two defines and prohibits two classes of improper payments: 1) prescription drug switch payments, which consist of incentives for prescription drug switches, and 2) other payment methodologies, such as withholds, that are designed to create incentives for health care provider compliance with formularies or other prescribing guidelines. Payments that encourage or reward generic substitution, when consistent with Section 6816-A of the Education Law, are exempted from both categories of improper payment.
Section three expressly prohibits retaliation against a health care provider for making prescribing choices that do not conform to PBM or health plan direction or formulary guidelines, including termination of a provider's status as a participating provider in the plan's contracted provider network.
Section four provides for enforcement of the new Article by subjecting each improper payment to a maximum penalty of $25,000 and by giving any health care provider who suffers unlawful retaliation a private right of action to seek equitable relief, recovery of the provider's actual damages and a civil penalty of up to three times the amount of such damages.
Justification
Current law does not adequately protect health care providers from encountering undue pressure from PBMs and health plans to comply with prescribing guidelines that are often injurious to patient health. This pressure takes the form of per-switch payments, bonuses and other monetary incentives paid to prescribing physicians as an inducement for substituting one medication for another, eve when patients have been well stabilized on their existing drug regimen, free of side-effects or other impediments to ongoing prescription compliance. In these circumstances, the rationale for inducing the switch is typically solely economic benefit to the plan, not the therapeutic interests of the patient. Indeed, peer-reviewed research shows that patients subject to non-therapeutic switches are 30% more likely to fail in prescription drug adherence (compared to those who are maintained on their existing regimen), resulting in more complications form chronic illness and thus higher overall medical costs. Switching payments also subject providers to ethical conflicts of interest, to the extent they influence providers to make treatment decisions that are not solely in the best interest of their patients.
This legislation would prevent PBMs and health plans operating in New York from providing drug switching payments or other incentives to participating providers. It would also prevent use of techniques, such as monetary incentives or withholds, that coerce provider compliance with drug formularies or guidelines or specific direction.
The bill expressly exempts any practice that promotes generic substitution: i.e., the practice of substituting a multi-source, generic medication for the therapeutically equivalent brand name product originally prescribed.
Prior legislative history
None.
Fiscal implications
None.
Effective date
This Act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.