What's happening
This bill creates the New York Affordable Drug Manufacturing Act, enabling state partnerships to produce and distribute lower-cost generic prescription drugs.
Why it matters
Directs the state to actively partner with manufacturers. to produce and distribute generic drugs, aiming to increase competition, lower prices, and address drug shortages—potentially disrupting the current pharmaceutical supply chain and pricing models.
Mandates prioritization of high-impact drugs. including at least one form of insulin and drugs for chronic or high-cost conditions—meaning the program could quickly affect some of the most pressing affordability and access issues for New Yorkers.
Requires transparent pricing for state-associated generics. (excluding federally required rebates), with prices set based on specific production, regulatory, and administrative costs—potentially serving as a model for greater price transparency in the broader drug market.
Compels all state agencies to purchase through state-facilitated channels. and involves both public and private stakeholders in deciding which drugs to target, which could broaden the impact of lower prices beyond just government programs to hospitals, insurers, and patients statewide.
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Who cares
Headline styles
Make Generic Drugs Cheaper
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to rules
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
9020
IN SENATE
October 2, 2020
Introduced by Sen. RIVERA -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the public health law, in relation to enacting the "New York affordable drug manufacturing act of 2020"
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Short title. This act shall be known and may be cited as the "New York affordable drug manufacturing act of 2020".
§ 2. Article 2-A of the public health law is amended by adding a new title IV to read as follows:
TITLE IV
NEW YORK AFFORDABLE DRUG MANUFACTURING ACT OF 2020 Section 282. Definitions.
283. Partnerships; production and distribution of prescription
drugs.
284. Reporting.
285. Proprietary information.
§ 282. Definitions. As used in this title, the following terms shall have the following meanings:
1. "Generic drug" means a drug that is approved pursuant to subdivision (j) of section 355 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 301 et seq.), or a biosimilar, as defined under the federal Public Health Service Act (42 U.S.C. Sec. 262).
2. "Partnerships" shall include, but are not limited to, agreements for the procurement of generic prescription drugs by way of contracts or purchasing by a payer, state governmental agency, group purchasing organization, nonprofit organization, or other entity.
§ 283. Partnerships; production and distribution of prescription drugs. 1. (a) The commissioner shall enter into partnerships, consistent with paragraph (b) of subdivision two of this section, in consultation with all appropriate state agencies and the department of health or equivalent institution of any other state as determined by the commissioner, to increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD17279-02-0
S. 9020 2
prescription drugs for public and private purchasers, taxpayers, and consumers, and to increase patient access to affordable drugs.
(b) The department shall have the ability to hire staff to oversee and project-manage the partnerships for manufacturing or distribution of generic prescription drugs.
2. (a) The commissioner shall enter into partnerships resulting in the production or distribution of generic prescription drugs, with the intent that these drugs be made widely available to public and private purchasers, facilities licensed pursuant to article twenty-eight of this chapter, and pharmacies as defined in section six thousand eight hundred two of the education law, as appropriate. The generic prescription drugs shall be produced or distributed by a drug company or generic drug manufacturer that is registered with the United States Food and Drug Administration.
(b) (i) The commissioner shall only enter into partnerships pursuant to paragraph (a) of this subdivision to produce a generic prescription drug at a price that results in savings, targets failures in the market for generic drugs, and improves patient access to affordable medications.
(ii) For top drugs identified pursuant to the criteria listed in subparagraph (v) of this paragraph, the department shall determine if viable pathways exist for partnerships to manufacture or distribute generic prescription drugs by examining the relevant legal, market, policy, and regulatory factors.
(iii) The department shall consider the following, if applicable, when setting the price of the generic prescription drug:
(1) United States Food and Drug Administration user fees.
(2) Abbreviated new drug application acquisition costs amortized over a five-year period.
(3) Mandatory rebates.
(4) Total contracting and production costs for the drug, including a reasonable amount for administrative, operating, and rate-of-return expenses of the drug company or generic drug manufacturer.
(5) Research and development costs attributed to the drug over a fiveyear period.
(6) Other initial start-up costs amortized over a five-year period.
(iv) Each drug shall be made available to providers, patients, and purchasers at a transparent price and without rebates, other than federally required rebates.
(v) The department shall prioritize the selection of generic prescription drugs that have the greatest impact on lowering drug costs to patients, increasing competition and addressing shortages in the prescription drug market, improving public health, or reducing the cost of prescription drugs to public and private purchasers.
(c) (i) In identifying generic prescription drugs to be produced, the department shall consider prescription drug retail price lists made pursuant to section two hundred seventy-eight of this article.
(ii) The partnerships entered into pursuant to paragraph (a) of this subdivision shall include the production of at least one form of insulin, provided that a viable pathway for manufacturing a more affordable form of insulin exists.
(iii) The department shall prioritize drugs for chronic and high-cost conditions.
(d) The department shall consult with all of the following public and private purchasers to assist in developing a list of generic prescription drugs to be manufactured or distributed through partner-
S. 9020 3
ships and to determine the volume of each generic prescription drug that can be procured over a multiyear period to support a market for a lower cost generic prescription drug:
(i) The department of mental hygiene, the office for people with developmental disabilities, the office of general services, and the department of corrections and community supervision, or the entities acting on behalf of each of those state purchasers.
(ii) Health insurers licensed pursuant to the insurance law.
(iii) Hospitals.
(iv) Any other entity as determined by the commissioner.
(e) Before effectuating a partnership pursuant to this section, the commissioner shall determine minimum thresholds for procurement of an entity's expected volume of a targeted drug from the company or manufacturer over a multiyear period.
(f) All state agencies shall be required to purchase prescription drugs from the department or entities that contract or partner with the department pursuant to this chapter.
(g) The department shall not be required to consult with every entity listed in subparagraphs (ii), (iii) and (iv) of paragraph (d) of this subdivision, so long as purchaser engagement includes a reasonable representation from these groups.
§ 284. Reporting. 1. On or before January first, two thousand twentythree, the department shall submit a report to the legislature that assesses the feasibility of directly manufacturing generic prescription drugs and selling generic prescription drugs at a fair price. The report shall include, but not be limited to, an analysis of governance structure options for manufacturing functions, including chartering a private organization, a public-private partnership, or a public board of directors.
2. On or before March first, two thousand twenty-two, the department shall report to the legislature on both of the following:
(a) A description of the status of all drugs targeted under this chapter.
(b) An analysis of how the activities of the department may impact competition, access to targeted drugs, the costs of those drugs, and the costs of generic prescription drugs to public and private purchasers.
§ 285. Proprietary information. Notwithstanding any provision of law to the contrary, all nonpublic information and documents obtained by the department pursuant to this title shall not be required to be disclosed pursuant to article six of the public officers law.
§ 3. Severability. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review, the judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section or part of this act directly involved in the controversy in which the judgment shall have been rendered.
§ 4. 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 public health law, in relation to enacting the "New York affordable drug manufacturing act of 2020"
Purpose
The purpose of the bill is to have New York enter into arrangements with interested parties and other states around manufacturing or distribution of generic drugs to increase competition, lower prices, and address shortages in the market for generic prescription drugs
Summary of provisions
Section 1 makes the law be known as "New York Affordable Drug Manufac- turing Act of 2020"
Section 2 creates a new Title IV under Article 2-A of the public health law directing the Department of Health to work to develop plans for partnering with other entities and states to manufacture or distribute generic and biosimilar drugs approved by the FDA for certain prescriptions that are high cost or experience shortages. Of those the Department decides to pursue, at least one form of insulin shall be included, provided that a viable pathway for manufacturing a more affordable form on insulin exists. It establishes new section 282 setting forth definitions, section 283 establishing how drug manufactur- ing partnerships, production and distribution of prescription drugs would operate, section 284 setting forth reporting requirements and section 285 protecting proprietary information.
Section 3 provides for a severability clause. Section 4: effective date
Justification
Prescription drugs costs, even for generics, continue to rise out of reach for patients and insurers, both public and private. New York State itself spends millions of dollars on prescription drugs through its public health insurance programs and self-funded coverage of our state workforce. The state should have a strong interest in finding creative ways to lower drug costs and ensure those medications which may be at risk of being in short supply are available.
This is not a new concept. US Senator Elizabeth Warren during her 2020 presidential run called for the US government to begin manufacturing generic medications given the rising prices, lack of competition in the market, and potential for shortages in essential medications. More recently, California became the first state in the nation to sign into law legislation to begin the process of state manufacturing or distrib- ution of generic medications. This New York legislation is modeled on the California statute and would allow New York to partner with various entities including other states to lower costs and protect against short supplies.
Nearly 90% of prescription drugs are generic, yet a small number of companies manufacture them. Many contend this lack of competition has led to large prices increases of widely used and important medications like antibiotics and epinephrine without evidence of increased costs of manufacturing.
This legislation, like California's new statute, directs the Department of Health to identify generic drugs that are high cost or susceptible to shortages for possible manufacturing partnerships. It specifically requires that the Department consider one type of insulin, given the high costs and life saying nature of this medication that over 7 million diabetics in the US depend upon daily. The "New York Affordable Drug Manufacturing Act of 2020" would provide New York with an important tool to control drug costs for its taxpayers and for those who lack health insurance and allow New York to partner with other states moving in this direction to both lower costs and protect against shortages of certain drugs.
Legislative history
New Bill.
Fiscal implications
Initial costs to be determined, but substantial long term savings as generic prescription drug costs for the state would be much lower.
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.