What's happening
This bill requires health insurers to pass on most prescription drug rebates directly to patients at the point of sale.
Why it matters
Patients could see lower out-of-pocket costs at the pharmacy. , as insurers would have to pass on more of the savings from drug manufacturer rebates directly at the time of purchase, rather than keeping most of them.
Increased transparency and accountability for insurers. is established, since they must annually certify to the state that they're providing the majority of these rebates to patients, rather than using them for their own benefit.
Confidentiality protections are strengthened for rebate data. , meaning sensitive information about specific drugs, manufacturers, and pharmacies remains protected as trade secrets, potentially limiting public and policymaker scrutiny of pricing practices.
The bill could impact negotiations between insurers, pharmacy benefit managers (PBMs), and drug manufacturers. , as more rebate savings must be shared with patients, possibly altering the current business incentives and relationships among these stakeholders.
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Who cares
Headline styles
Give Drug Rebates to Patients
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to insurance
- Referred to rules
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.
Drug Rebates Go To Patients
In Assembly Committee · Insurance · Sponsor Latrice Walker
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6489
2019-2020 Regular Sessions
IN SENATE
June 13, 2019
Introduced by Sen. JACKSON -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the insurance law, in relation to requiring individual and small group insurance carriers and group and blanket accident and health carriers to certify that at least a majority of prescription drug rebates are provided to patients at the point of sale
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 1 of subdivision (e) of section 3231 of the insurance law is amended by adding a new subparagraph (C) to read as follows:
(C) an insurer shall annually certify to the department that, during the prior benefit year, the insurer made available to enrollees at the point of sale at least a majority (i.e., greater than fifty percent) of the rebates received by such insurer or any third party administering prescription drug benefits on behalf of such insurer.
(i) For purposes of this paragraph, "rebate" means:
(1) negotiated price concessions including but not limited to base rebates and reasonable estimates of any price protection rebates and performance-based rebates that may accrue directly or indirectly to the issuer during the coverage year from a manufacturer, dispensing pharmacy, or other party to the transaction, and
(2) reasonable estimates of any fees and other administrative costs that are passed through to the issuer and serve to reduce the issuer's prescription drug liabilities for the coverage year.
(ii) In providing the certification required under this subparagraph, an issuer shall not publish or otherwise reveal information regarding the actual amount of rebates the issuer received on a product-, manufacturer- or pharmacy-specific basis. Such information is protected as a trade secret, is not a public record as defined in the public officers law and shall not be disclosed directly or indirectly. An insurer shall
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13316-01-9
S. 6489 2
impose the confidentiality protections of this subparagraph on any third parties or vendors with which it contracts that may receive or have access to rebate information.
§ 2. Subdivision (b) of section 3221 of the insurance law is amended to read as follows:
(b) (1) No such policy shall be delivered or issued for delivery in this state unless a schedule of the premium rates pertaining to such form shall have been filed with the superintendent.
(2) An insurer shall annually certify to the department that, during the prior benefit year, the insurer made available to enrollees at the point of sale at least a majority (i.e., greater than fifty percent) of the rebates received by such insurer or any third party administering prescription drug benefits on behalf of such insurer.
(A) For purposes of this paragraph, "rebate" means:
(i) negotiated price concessions including but not limited to base rebates and reasonable estimates of any price protection rebates and performance-based rebates that may accrue directly or indirectly to the issuer during the coverage year from a manufacturer, dispensing pharmacy, or other party to the transaction, and
(ii) reasonable estimates of any fees and other administrative costs that are passed through to the issuer and serve to reduce the issuer's prescription drug liabilities for the coverage year.
(B) In providing the certification required under this subdivision, an issuer shall not publish or otherwise reveal information regarding the actual amount of rebates the issuer received on a product-, manufacturer- or pharmacy-specific basis. Such information is protected as a trade secret, is not a public record as defined in the public officers law and shall not be disclosed directly or indirectly. An insurer shall impose the confidentiality protections of this subdivision on any third parties or vendors with which it contracts that may receive or have access to rebate information.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to requiring individual and small group insurance carriers and group and blanket accident and health carriers to certify that at least a majority of prescription drug rebates are provided to patients at the point of sale
Purpose
To ensure patients benefit from substantial discounts that exist within the prescription drug supply chain.
Summary of provisions
Section 1 requires individual and small group carriers to certify that at least a majority (greater than 50%) of prescription drug rebates are provided to patients at the point of sale.
Section 2 requires group and blanket accident and health carriers to certify that at least a majority (greater than 50%) of prescription drug rebates are provided to patients at the point of sale.
Section 3 is the effective date.
Justification
The difference between list prices of prescription drugs and the net prices paid by pharmacy benefit managers and health insurers has been growing exponentially in recent years. While many entities benefit from these large negotiated discounts - estimated at $166 billion in 2018 one group gets the short end of the stick: patients.
As more and more health insurance benefit designs rely on coinsurance and deductibles, patients end up paying cost sharing on the list price of the drug even as their health plan is reaping significant discounts. Unlike negotiated discounts on other services like hospital care, these savings are not shared with patients in the deducible phase of a plan and patients often end up paying more than their health plan for a drug. Plans argue that the discounts are used to lower premiums for everyone, but patients with complex and chronic conditions end up carrying the biggest burden - exactly the opposite of how insurance should work. This bill strikes a careful balance, allowing rebates and discounts to be socialized and keep premiums down to a point, but also making sure some of those significant discounts are passed along to the place they're most important to patients - at the pharmacy counter.
Many health plans have already implemented this option and have marketed this approach as good for patients and "worth it."
Legislative history
New bill.
Fiscal implications
None.
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.