What's happening
This bill imposes civil penalties for pharmacy benefit managers violating contract appeal rules and strengthens appeal process transparency requirements.
Why it matters
Creates real financial consequences for pharmacy benefit managers (PBMs). by imposing civil penalties (up to $5,000 per violation) if they break contract appeal rules, which could deter unfair practices and encourage compliance.
Empowers the New York Attorney General. to take legal action to recover penalties and seek additional remedies, adding enforcement strength and state oversight to PBM conduct.
Demands greater transparency for pharmacies during appeals. by requiring PBMs to provide detailed information in writing if an appeal is denied—specifically, the exact drug code, the wholesaler’s name, and the date the price was checked—helping pharmacies verify whether maximum allowable cost determinations are fair and accurate.
Aims to improve fairness in drug pricing disputes. by making it harder for PBMs to obscure or manipulate drug cost information, potentially leading to better outcomes for independent pharmacies and, by extension, consumers who rely on them.
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Who cares
Headline styles
Fine PBMs for Contract Violations
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to health
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.902
- Referred to health
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Fine Pharmacy Benefit Violations
In Senate Committee · Health · Sponsor Linda Rosenthal
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5623
2017-2018 Regular Sessions
IN SENATE
April 20, 2017
Introduced by Sen. HANNON -- read twice and ordered printed, and when printed to be committed to the Committee on Health
AN ACT to amend the public health law, in relation to civil penalties for violations concerning the pharmacy benefit manager contract appeals process; and in relation to the process for appeal
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 280-a of the public health law is amended by adding two new subdivisions 3 and 4 to read as follows:
3. Any pharmacy benefit manager who violates the provisions of subdivision two of this section shall be subject to a civil penalty not to exceed five thousand dollars for each violation.
4. The attorney general shall bring an action to recover the civil penalties provided by subdivision three of this section and for such other relief as may be deemed necessary.
§ 2. Paragraph (e) of subdivision 2 of section 280-a of the public health law, as added by chapter 540 of the laws of 2015, is amended to read as follows:
(e) if an appeal is denied, the pharmacy benefit manager shall identify [the national drug code of a therapeutically equivalent drug, as determined by the federal Food and Drug Administration, that is available for purchase by pharmacies in this state from wholesalers registered pursuant to subdivision four of section sixty-eight hundred eight of the education law at a price which is equal to or less than the maximum allowable cost for that drug as determined by the pharmacy benefit manager] in writing: (i) the national drug code of a therapeutically equivalent drug as determined by the food and drug administration that is available for purchase by retail community pharmacies in the same package size, (ii) the name of the wholesaler registered pursuant to subdivision four of section sixty-eight hundred eight of the education law from which the price was obtained, and (iii) the date on which the price was determined.
§ 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07427-03-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public health law, in relation to civil penalties for violations concerning the pharmacy benefit manager contract appeals process; and in relation to the process for appeal
Purpose
This bill authorizes the New York State Attorney General to enforce the pharmacy benefit manager contract appeals process, and expressly provides for a civil penalty for those in violation of the law.
Summary of provisions
Section one amends section 280-a of the Public Health Law by adding two new subdivisions 3 and 4.
Section two amends paragraph (e) of subdivision 2 of section 280-a of the Public Health Law, as added by chapter 540 of the laws of 2015.
Section three sets forth the effective date.
Justification
In 2015, the Legislature passed a law to establish a pharmacy benefit manager contract appeals process in New York State (Chapter 540). Pharmacy benefit managers (PBMs) are business entities that manage the pharmacy benefit for health plans, employers and other payers. The contracts that exist between PBMs and pharmacies include the reimbursement policies for drugs. Though the 2015 law required PBMs to offer the pharmacies they contract with the right to appeal a reimbursement rate within thirty days of their claim submission, the bill did not include a specific enforcement provision to ensure that every pharmacy benefit manager in New York was in compliance. In order to ensure more uniform compliance with the law, this bill strengthens the existing law by including an enforcement provision through the New York State Attorney General, and includes a civil penalty up to $5,000 for those PBMs found in violation of the law. In addition, this bill would require PBMs to include a written explanation with the denial that provides information regarding where the PBM pricing data was obtained, as originally intended.
Legislative history
New bill
Fiscal implications
None to the State
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.