What's happening
This bill expands patient access to prescription drugs by setting rules for drug formularies, prior authorizations, cost-sharing, synchronization, and transparency for insurers and pharmacies.
Why it matters
Protects patients' continuity of care. by ensuring that if a drug is removed from an insurer’s formulary or moved to a higher cost-sharing tier during a plan year, patients can continue receiving the drug at the same cost until the end of the plan year—reducing disruptions for those with ongoing treatment needs.
Limits insurer and pharmacy benefit manager (PBM) control over drug access. by mandating transparent and reviewable procedures for drug approvals, prior authorizations, and formulary exceptions—including appeal rights and external review—giving patients and prescribers more authority when medically necessary drugs are denied or restricted.
Improves cost transparency and fairness for consumers. by prohibiting copays or coinsurance that exceed the actual price paid by pharmacies (after rebates), requiring insurers to provide detailed explanation of benefits for prescriptions, and mandating that a majority of manufacturer rebates be passed through to patients at the point of sale—potentially lowering out-of-pocket costs.
Supports medication adherence and convenience. through mandatory prescription synchronization policies, which allow patients with chronic illnesses to align refill dates for multiple medications—minimizing gaps in treatment and reducing pharmacy trips—while ensuring pharmacies are properly reimbursed for partial fills.
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Who cares
Patients with chronic conditions
The bill would provide standing prior authorizations of up to twelve months, subject to exceptions, and protections for continued drug coverage when formularies change.
Health insurers and HMOs
The bill would impose formulary-exception and prior-authorization requirements, while insurers would also face new patient cost limits and annual certification that more than half of rebates were made available to enrollees at the point of sale.
Retail pharmacies and pharmacists
The bill would allow qualifying prescriptions to be filled at an in-network retail pharmacy based on the prescriber's determination and require full dispensing fees for partial fills used to synchronize prescriptions.
- Likely support
Prescribing clinicians
The bill would require advance notice of prior-authorization changes and allow clinicians to support external appeals of off-formulary drug denials by certifying that covered alternatives are insufficiently effective or contraindicated.
Headline styles
Lower Drug Costs, Easier Access
Plain English, a few words. Used as the page title.
Sponsors
17 Co-sponsors
1 Multi-sponsor
History
- Referred to insurance
- Referred to insurance
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.
Lower Prescription Drug Costs
In Senate Committee · Insurance · Sponsor Andrew Gounardes
Full text
13 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4521
2019-2020 Regular Sessions
IN ASSEMBLY
February 4, 2019
Introduced by M. of A. SOLAGES, TAYLOR, DICKENS, L. ROSENTHAL, D'URSO, RAMOS, SIMON, GUNTHER, ARROYO, JAFFEE, GLICK, GOTTFRIED, BARRON, BLAKE, LAWRENCE, MONTESANO, SEAWRIGHT, WRIGHT -- Multi-Sponsored by -- M. of A. COOK -- read once and referred to the Committee on Insurance
AN ACT to amend the insurance law and the public health law, in relation to access to appropriate drugs at reasonable prices, formulary exceptions, standing prior authorizations and external appeals; to amend the insurance law, in relation to access to retail pharmacies, prescription synchronization, limits on patient drug costs, explanations of benefits and rebates; to amend the social services law, in relation to prescription drug synchronization; and to amend the education law, in relation to limits on copayments and drug substitutions
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The insurance law is amended by adding a new section 4806 to read as follows:
§ 4806. Access to appropriate drugs at reasonable prices; formulary exceptions; standing prior authorization requirement. (a) An insurer offering a prescription drug benefit with a formulary of approved or preferred drugs shall establish a procedure by which it determines whether a formulary drug provides appropriate therapeutic benefits to meet the particular health care needs of an insured. If the insurer determines that no formulary drug provides appropriate therapeutic benefits to meet the particular health care needs of an insured, the insurer shall cover the cost of an off-formulary drug for that insured, at no additional cost to the insured beyond what the insured would otherwise pay for a preferred brand name drug on the formulary. The determinations whether a drug provides appropriate therapeutic benefits and whether a non-formulary drug is necessary to meet the particular health care needs of the insured are utilization review decisions and are reviewable in
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07324-01-9
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accordance with article forty-nine of this chapter, including external appeal.
(b) (1) For purposes of this section, "prior authorization requirement" means any practice implemented by an insurer in which coverage of a prescription drug or device is dependent upon a covered person or a health care practitioner obtaining approval from the insurer prior to the service, device, or drug being performed, received, or prescribed, as applicable. "Prior authorization" includes prospective or utilization review procedures conducted prior to providing a drug or device.
(2) An insurer which requires prior authorizations for particular prescription drugs shall have a procedure by which an insured who is being prescribed such drug for a chronic condition may obtain a standing prior authorization for a drug for the lesser of the following from the date of the approval: (i) twelve months; or (ii) the last day of the covered person's eligibility under the policy or plan.
(3) As a condition of such standing prior authorization, if according to the available medical and scientific evidence the patient's chronic condition is likely to change during the standing referral period, the insurer or health plan may require the prescribing health care practitioner to certify to the insurer, not more frequently than on a quarterly basis, that the patient's chronic condition has not changed materially with respect to the need for the prescription.
(4) A twelve-month standing prior authorization provided under paragraph two of this subsection does not apply to and is not required for any of the following:
(i) medications that have a typical course of administration of less than one year or for which available medical or scientific evidence does not support a twelve-month period of use, in which case the standing prior authorization period shall be the typical course of administration or the period of use supported by the available medical or scientific evidence;
(ii) medications that require an initial trial period to determine effectiveness and tolerability, except that after such trial period a one-year, or greater, prior authorization period will be given; and
(iii) medications that are schedule II controlled substance or a schedule III controlled substance containing hydrocodone.
(5) For drugs used to treat acute conditions, insurers shall grant standing prior authorizations for the period that the medical and scientific evidence shows to be the anticipated period for the course of treatment to have its intended effect.
(6) The standing prior authorizations provided for in this section are no longer valid and automatically terminate if there are changes to federal or state laws or federal regulatory guidance or compliance information finding that the drug in question is no longer approved or safe for the prescribed purpose.
(7) If an AB-rated generic drug that is therapeutically equivalent to the drug subject to a standing prior authorization becomes available, the insurer may substitute such newly released drug for the drug subject to the standing prior authorization, provided advance notice is given to the insured.
(8) The determination whether the drug is being prescribed to treat a chronic condition and the period over which the course of treatment for an acute condition is anticipated to have its intended effect are utilization review decisions and are reviewable in accordance with article forty-nine of this chapter, including external appeal.
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(c) (1) If a formulary drug being prescribed for an insured is removed by the insurer from its formulary for reasons other than a determination that the approval for the use of that drug has been withdrawn by the U.S. Food and Drug Administration, the insurer shall continue to cover that drug for that insured for a transitional period to the end of the plan year at the same copayment as charged when the drug was on formulary. Thereafter, the insured may seek continued coverage of the drug, if appropriate, pursuant to the provisions of subsection (a) of this section.
(2) If a formulary drug being prescribed for an insured is moved by the insurer to a higher cost sharing tier in its formulary for reasons other than release of an AB-rated generic drug, the insurer shall continue to cover that drug for that insured for a transitional period to the end of the plan year at the same copayment as charged when the drug was on formulary. Thereafter, the insured may seek continued coverage of the drug, if appropriate, pursuant to the provisions of subsection (a) of this section.
(3) If an insurer that provides prescription drug coverage enrolls a new insured who is currently being prescribed a drug for a chronic health condition, or as part of an ongoing course of treatment for an acute condition, and that drug is not on the insurer's formulary, the insurer shall cover that drug for that insured at no additional cost to the insured beyond what the insured would otherwise pay for a preferred brand name drug on the formulary, for a transitional period of ninety (90) days from the effective date of enrollment. The insured must adhere to the insurer's quality assurance requirements and provide to the insurer necessary medical information related to the prescription and otherwise adhere to the insurer's policies and procedures including, but not limited to procedures regarding obtaining pre-authorization and a treatment plan approved by the insurer. In no event shall this subsection be construed to require an insurer to provide coverage for benefits not otherwise covered. The transitional period does not preclude the insured from seeking continued coverage of the drug, if appropriate, pursuant to the provisions of subsection (a) of this section.
§ 2. The public health law is amended by adding a new section 4406-h to read as follows:
§ 4406-h. Access to appropriate drugs at reasonable prices; formulary exceptions; standing prior authorization requirement. 1. A health maintenance organization offering a prescription drug benefit with a formulary of approved or preferred drugs shall have a procedure by which it determines whether a formulary drug provides appropriate therapeutic benefits to meet the particular health care needs of an enrollee. If the health maintenance organization determines that no formulary drug provides appropriate therapeutic benefits to meet the particular health care needs of an enrollee, the health maintenance organization shall cover the cost of an off-formulary drug for that enrollee, at no additional cost to the enrollee beyond what the enrollee would otherwise pay for a preferred brand name drug on the formulary. The determinations whether a drug provides appropriate therapeutic benefits and whether a non-formulary drug is necessary to meet the particular health care needs of the insured are utilization review decisions and are reviewable in accordance with article forty-nine of this chapter, including external appeal.
2. (a) For purposes of this section, "prior authorization requirement" means any practice implemented by a health maintenance organization in
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which coverage of a prescription drug or device is dependent upon a covered person or a health care practitioner obtaining approval from the health maintenance organization prior to the service, device, or drug being performed, received, or prescribed, as applicable. "Prior authorization" includes prospective or utilization review procedures conducted prior to providing a drug or device.
(b) A health maintenance organization which requires prior authorizations for particular prescription drugs shall have a procedure by which an enrollee who is being prescribed such drug for a chronic condition may obtain a standing prior authorization for a drug for the lesser of the following from the date of the approval: (i) twelve months; (ii) the last day of the enrollee's eligibility under the policy or plan.
(c) As a condition of such standing prior authorization, if according to the available medical and scientific evidence the enrollee's chronic condition is likely to change during the standing referral period, the insurer or health plan may require the prescribing health care practitioner to certify to the health maintenance organization, not more frequently than on a quarterly basis, that the enrollee's chronic condition has not changed materially with respect to the need for the prescription.
(d) A twelve-month standing prior authorization provided under subparagraph (i) of paragraph (b) of this subdivision does not apply to and is not required for any of the following:
(i) medications that have a typical course of administration of less than one year or for which available medical or scientific evidence does not support a twelve-month period of use, in which case the standing prior authorization period shall be the typical course of administration or the period of use supported by the available medical or scientific evidence;
(ii) medications that require an initial trial period to determine effectiveness and tolerability, except that after such trial period a one-year, or greater, prior authorization period will be given; and
(iii) medications that are schedule II controlled substance or a schedule III controlled substance containing hydrocodone.
(e) For drugs used to treat acute conditions, insurers shall grant standing prior authorizations for the period that the medical and scientific evidence shows to be the anticipated period for the course of treatment to have its intended effect.
(f) The standing prior authorizations provided for in this section are no longer valid and automatically terminate if there are changes to federal or state laws or federal regulatory guidance or compliance information finding that the drug in question is no longer approved or safe for the prescribed purpose.
(g) If an AB-rated generic drug that is therapeutically equivalent to the drug subject to a standing prior authorization becomes available, the health maintenance organization may substitute such newly released drug for the drug subject to the standing prior authorization, provided advance notice is given to the enrollee.
(h) The determination whether the drug is being prescribed to treat a chronic condition and the period over which the course of treatment for an acute condition is anticipated to have its intended effect are utilization review decisions and are reviewable in accordance with article forty-nine of this chapter, including external appeal.
3. (a) If a formulary drug being prescribed for an enrollee is removed by the health maintenance organization from its formulary for reasons other than a determination that the approval for the use of that drug
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has been withdrawn by the U.S. Food and Drug Administration, the health maintenance organization shall continue to cover that drug for that enrollee for a transitional period to the end of the plan year at the same copayment as charged when the drug was on formulary. Thereafter, the enrollee may seek continued coverage of the drug, if appropriate, pursuant to the provisions of subdivision one of this section.
(b) If a formulary drug being prescribed for an insured is moved by the health maintenance organization to a higher cost sharing tier in its formulary for reasons other than release of an AB-rated generic drug, the health maintenance organization shall continue to cover that drug for that enrollee for a transitional period to the end of the plan year at the same copayment as charged when the drug was on formulary. Thereafter, the enrollee may seek continued coverage of the drug, if appropriate, pursuant to the provisions of subdivision one of this section.
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