Directs the department of health to perform bi-annual assessments of non-preferred drugs for recipients of medical assistance, and to issue annual reports to the legislature thereon

Title of bill

An act to amend the public health law, in relation to directing the department of health to make bi-annual assessments of non-preferred drugs for recipients of medical assistance and to submit an annual report to the legislature thereon

Purpose

To require the Department of Health to review and assess the preferred drug list bi-annually and to require inclusion of drugs when 35% of prescriptions in the drug class were for a non-preferred drug

Summary of provisions

Section one adds a new Public Health Law § 272(15) to require the Department of Health to make bi-annual assessments of non-preferred drugs. A non-preferred drug shall be included as a preferred drug, at the manufacturer's option, when at least 35% of prescriptions filled in that drug's class in the previous two quarters were for a non-preferred drug, provided the manufacturer agrees to required rebates. The previously non-preferred drug shall not be disadvantaged by prior authorizations or other requirements not imposed on other drugs in the class. This section also requires the Department to provide an annual report regarding drug classes, the financial impact of preferred drug decisions and clinical evidence used in making such decisions and criteria that permit beneficiaries to access non-preferred drugs in a drug class.

Section two provides that the act shall take effect immediately.

Justification

Drug prices continue to be the fastest growing cost in our healthcare system. The preferred drug program is one way the state attempts to control costs while promoting access by entering into supplemental rebate agreements with drug manufacturers. In certain instances the state may enter into an exclusivity agreement with a drug manufacturer where only that drug may be preferred within the drug class. In exchange, the manufacturer agrees to rebate a significant portion of the cost of the drug back to the state. Although this often allows for the most cost effective access to treatment, there may be instances where a non-preferred drug is being utilized at a rate higher than expected, while providing no rebate back to the state. This bill would allow the state, when financially advantageous, to enter into supplemental rebate agreements for non-preferred drugs that are being utilized at a higher rate than expected.

Legislative history

New bill.

Fiscal implications

None.

Effective date

Immediately.