Discourages the practice by health plan insurers of changing brand name drugs to generic drugs which generic drugs are not the equivalent of brand name

* Co-payment or co-insurance costs with respect to a prescribed drug not exceed the cost of the drug to the insurance provider.

* An out-of-pocket cap be established for pharmacy benefits on covered prescription drugs.

* Maximum co-payment and co-insurance amounts be limited so they shall not exceed ten times the dollar value of the lowest co-payment and co-insurance amount whose cost is above zero dollars.

* When an insurer has required that a member take a generic alternative to a brand-name patented drug prescribed by their doctor, and the alternative is not deemed as having an equivalent impact on the member by the member's prescribing physician and is not deemed an A-rated generically and therapeutically equivalent product as determined by the FDA, the insurer shall pay for and make available the brand-name patented drug originally prescribed by the member's doctor.

* In cases where step therapy is required prior to a patient accessing a brand name patented prescription drug, the patient can receive the brand name patented prescription drug prescribed by their doctor if the patient tries one alternative medication and the patient's doctor determines that the single source therapy remains medically necessary.

* Insurers must submit their prescription drug formularies to the State Insurance Department on an annual basis, which the State Insurance Department shall publicly post on their Web site to enable consumers to compare drug formularies during open enrollment periods. Once submitted, plans may not remove or make changes to the drug formulary mid-year except in instances where an A-rated generically and therapeutically equivalent product as determined by the FDA becomes available, the drug is recalled by the Food and Drug Administration, or significant new safety information becomes available.

* A patient receiving coverage for a drug on an insurer's existing formulary shall not be denied coverage upon a change in the formulary if his or her physician determines that drug to be medically necessary.

Identical amendments are also made to section 3216 of the insurance law by adding two new subsections (j-1) and (j-2) and to section 4303 of the insurance law by adding two new subsections (ff) and (gg). JUSTIFICATION : Access to prescription drugs that best treat a particular illness or condition are essential to the health and well-being of New Yorkers, particularly the state's senior population. Too often, decisions about the most appropriate prescription drug choices made by doctors and patients are being trumped by insurance companies whose interest in providing health coverage for their members are compromised by concerns over costs.

This issue is most evident in relation to access to single-source drugs. Single-source drugs are unique in their formulation, dosage, and delivery-they have no generic equivalent because of current patent laws and are often times more expensive. The higher prices of single-source drugs cause insurance companies to create policies and formularies that steer the insured toward prescription drugs that are cheaper, rather than those that the doctor and patient may decide are the best course of treatment. Insurance companies put restrictions in place ranging from higher co-payments and coinsurance to bureaucratic approval requirements like pre-authorization and step therapy that hinder patient's access to brand name drugs that their doctor has determined is the most suitable drug to treat their condition.

A 2008 study by my office showed that the most commonly prescribed single-source prescription drugs, and those most frequently used to treat ailments disproportionally impacting minorities like heart disease, were the most likely to have restrictions on their use imposed by the insurance companies. The findings included:

* All 15 health insurance companies surveyed imposed restrictions on use of the twenty most prescribed single-source drugs.

* More than a third of health insurance companies surveyed imposed restrictions on the use of the most commonly prescribed single-source drugs treating mental health conditions.

* More than a third of health insurance companies surveyed imposed restrictions on the use of the most commonly prescribed single-source drugs treating high cholesterol and blood pressure.

A 2009 report by my office further examining this issue resulted in additional conclusions, including:

* Single-source drugs treating HIV/AIDS routinely had the highest co-payments, despite findings that costly co-payments on HIV/AIDS drugs results in treatment interruption that can cause the virus to become resistant to the prescribed drug and make treatment of the patient more difficult.

* Insurance companies surveyed frequently require doctors to acquire pre-authorization to prescribe single-source drugs treating cancer for their patients.

* Single-source drugs treating chronic pain and cardiovascular ailments are extensively restricted through prior authorization, expensive co-payments, and quantity limitations. In several instances, multiple limitations on use will be placed on one single-source drug.

Legislative history

This is a new bill.

Fiscal implications

No costs to the state.

Effective date

This act shall take effect one year after it becomes law.