Provides for pharmacy benefit management and the procurement of prescription drugs at a negotiated rate for dispensation

1 Co-sponsor

• Tony Avella

BILL NUMBER:S1086

Title of bill

An act to amend the public health law, in relation to pharmacy benefit managers

Purpose or general idea of bill

This bill specifies the fiduciary duties of pharmacy benefits managers and the obligation to serve the covered entities with which they contract.

Summary of specific provisions

Section 1 establishes definitions, particularly a definition of a Pharmacy Benefits Manager (PBM). It also establishes that PBMs shall: have a fiduciary relationship with a health plan, pass through all monies to a health plan other than fee or payment for services, account for all funds and provide access to all necessary information, disclose any relevant relationships, and not substitute or cause the substitution of prescription drugs.

Section 2 is the severability clause.

Justification

PBMs are companies that manage prescription drug benefit programs for health plans. PBMs have promised to save health plans and their members money, but in reality, their negotiations are very secretive. PBMs commonly pocket payments from drug manufacturers that ought to be used to lower drug prices, and they accept payments in exchange for giving preference to more expensive drugs. This bill, modeled on recent legislation in Maine, would require that PBMs act not in their own best interest, but rather in the interest of the health plan and its beneficiaries.

Prior legislative history

2006: S.7981 Referred to Health 2008: S.2642 Referred to Health 2010: S.3930 Referred to Health 2005: A.10688 Reported to Codes Committee 2006: A.10688A Passed Assembly 2007-08: A.6341 Passed Assembly 2009-10: A.2008A Passed Assembly 2011-12: S.4664/A809 Referred to Health

Fiscal implications

None.

Effective date

90 days after it shall become law.