Relates to coverage for the purchase of prescription drugs through mail order pharmacies

The amendment to these paragraphs also provides that when a prescription has been written for and may be filled for more than a 30-day supply, the insurance policy may not impose an additional fee, co-pay or other cost that would exceed the amount that would be paid to a mail order pharmacy for a supply in excess of 30 days.

Finally, the amendment provides that if a mail order shipment for which the mail or carrier service has documentation of delivery was not received by the insured or was damaged or spoiled in the delivery process, the mail order pharmacy must replace the prescription without any additional charge to the insured, provided that the insured complies with any requirements imposed by the plan. In the case spoiled or damaged prescriptions, the policy may require that the insured return such spoiled or damaged prescriptions to the mail order pharmacy, which will bear the cost of such returns. If the insured fails to comply with the return requirement the policy may require the insured to reimburse the policy for the cost of the prescription. Prescriptions must be replaced before return of a spoiled or damaged prescription, unless the insured was previously required to reimburse the policy for an undeliv- ered, damaged or spoiled prescription and in that case, the policy may wait until it receives a copy of the police report or the damaged or spoiled prescription before sending the replacement to the insured.

Regarding the removal of provisions in the current law, this amendment removes the requirements that a non-mail order retail pharmacy agree "in advance through a contractual network agreement" to the same "terms and conditions" as those imposed on network mail order pharmacies and other non-retail pharmacies. These provisions are being removed because they have served to impose extra requirements on network community pharmacies as a precondition for providing certain covered medications otherwise available by mail order.

Section two of this bill amends Insurance Law section 3221(k)(6)(D) in the same manner as the amendments provided in section one of this bill.

Section three of this bill amends Insurance Law section 3221(1)(18) in the same manner as the amendments provided in section one of this bill.

Section four of this bill amends Insurance Law section 4303(s)(4) in the same manner as the amendments provided in section one of this bill.

Section five of this bill amends Insurance Law section 4303(kk) in the same manner as the amendments provided in section one of this bill.

Section six of this bill provides severability language.

Justification

In January 2012, the current provisions of Insurance Law took effect guaranteeing that consumers would always have the choice of obtaining covered prescription drugs from a local network participating pharmacy.

Over the course of the years since then, it became clear that the law was not working as intended. Consumers received letters from pharmacy benefit managers directing them to out-of-state "specialty" pharmacies. Consumers returning to their local participating pharmacy could no longer obtain their prescription drugs there because the claim was blocked. The pharmacy was notified that coverage for that medication was no longer covered in the "retail" pharmacy network. The patient was to be directed to the "specialty" pharmacy.

Contrary to the intent of the law, beneficiaries are forced into mandatory mail order programs based upon the medications that they are prescribed. These medications are being deemed to be "specialty" medications and, thus, cannot be filled at a non- specialty retail pharmacy. Local pharmacies in the network were not considered "specialty" pharmacies and, thus, were excluded from the new "restricted" network. This allowed pharmacy benefit managers to steer prescription volume out of the network retail pharmacies into their wholly owned pharmacy subsidiaries. Defining "mail order pharmacy" is necessary so that its meaning cannot be manipulated by self-promoting pharmacy benefit managers.

Community pharmacy owners took action. They contacted plan sponsors and pharmacy benefit managers asking for contracts that would allow them to continue to dispense covered medications available to them from their wholesalers. The phone calls, letters, and e-mails that followed document that large pharmacy benefit managers were using "terms and conditions" as a legal roadblock against community pharmacies. These included unreasonable and onerous "terms" such as costly accreditations, on-call 24-hour nursing services, and excessive liability insurance demands. Some threatened to exclude community pharmacies from the retail network in order to be enrolled as a mail order pharmacy. For these reasons, it is necessary to remove "terms and conditions" from current law.

The term "in advance through a contractual network agreement" has served as another roadblock to the community pharmacies envisioned in the original law. A close reading of the law allows a local network pharmacy to agree to accept the same reimbursement amount, but nothing in the law requires the pharmacy benefit manager to grant the participating community pharmacy an additional contract to meet the mail order reimbursement price. The present statute must be amended to resolve this contradiction and restore the original legislative intent.

Consumers have had many issues with mail order pharmacies. When medication requires refrigeration, spoilage is an issue for consumers. Because many consumers are employed and cannot control the time that the medication will be delivered, medication that requires refrigeration could be left outside in the sun for an extended period of time melting whatever cold packaging was included to keep the medication refrigerated.

Additionally, many medications have been lost in the mail or stolen. When medication that a person relies on in order to maintain his or her health is lost or stolen, that person's health is placed at risk. This risk is intensified by the fact that the only replacement option is the mail order pharmacy, which means that the replacement medication may not arrive for days. Because many prescriptions cannot be refilled more than one week ahead of time, a person could run out of the medication while he or she waits for a second delivery. While it could be argued that the person could simply wait at home for the medication to be delivered, this argument ignores some practical realities such as employment and the inability to simply take a day off from work to wait for a package to be delivered.

The original intent of the law has been distorted. These proposed amendments are reasonable and fair. With these amendments, the original legislative intent will be restored. Consumers will finally have the ability to use in-network community pharmacies for their prescriptions, regardless of whether the medication is considered to be a "specialty" medication.

Prior legislative history

New bill

Fiscal implications

Undetermined

Effective date

This act shall take effect immediately.