Bill Text: NY A05877 | 2021-2022 | General Assembly | Introduced


Bill Title: Provides that prescription benefit plans may not require patients to receive prescriptions through mail order pharmacies.

Spectrum: Moderate Partisan Bill (Democrat 5-1)

Status: (Introduced - Dead) 2022-01-05 - referred to insurance [A05877 Detail]

Download: New_York-2021-A05877-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          5877

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                      March 1, 2021
                                       ___________

        Introduced by M. of A. JOYNER, COOK, LAVINE, GALEF -- Multi-Sponsored by
          -- M. of A.  McDONOUGH, SIMON -- read once and referred to the Commit-
          tee on Insurance

        AN  ACT  to  amend  the  general business law, in relation to mail order
          pharmacies

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section 1. The general business law is amended by adding a new article
     2  40 to read as follows:
     3                                 ARTICLE 40
     4                            MAIL ORDER PHARMACIES
     5  Section 900. Legislative findings and declarations; purposes.
     6          901. Definitions.
     7          902. Prohibited conduct.
     8          903. Action to recover damages by an enrollee.
     9          904. Violations.
    10          905. Enforcement by attorney general.
    11          906. Applicability.
    12    §  900. Legislative findings and declarations; purposes. 1. The legis-
    13  lature finds and declares that:
    14    (a) The number of Americans who are prescribed three or  more  medica-
    15  tions  is growing at an alarming rate, with approximately ten percent of
    16  the population taking five or more prescription medications. These Amer-
    17  icans face many challenges when they are required  to  receive  some  of
    18  their  prescriptions  from  a  mail order pharmacy while receiving other
    19  prescriptions from a local retail pharmacy.   These  challenges  include
    20  the discovery of potential adverse interactions among their prescription
    21  drugs,  comprehensive  counseling,  the  coordination  and timing of the
    22  receipt of prescriptions, and the ability to keep information  regarding
    23  their medical condition or conditions private.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03930-01-1

        A. 5877                             2

     1    (b)  Americans  with  multiple prescriptions benefit from the services
     2  provided by a local retail pharmacy because such local source  will  not
     3  only  be able to determine if there are any harmful or potentially harm-
     4  ful drug interactions  but  can  also  provide  immediate  face-to-face,
     5  confidential  counseling  to the patient regarding any and all of his or
     6  her prescribed drugs. For patients who are enrolled  in  a  prescription
     7  benefit  plan,  ensuring  that  the plan's network includes local retail
     8  pharmacies has  become  of  great  importance.  Mandating  that  certain
     9  prescriptions must be filled by a mail order pharmacy is not in the best
    10  interest   of   all   prescription   benefit  plan  enrollees  and  such
    11  prescription benefit plan enrollees should be given the choice regarding
    12  where a prescription will be filled.
    13    (c)  Many  Americans  wish  to  keep   information   regarding   their
    14  prescriptions  and health conditions private. Some Americans will choose
    15  to disclose information to their family, while others may choose not  to
    16  disclose any information to any person. Many people know that medication
    17  used  to  treat chronic, complex or rare conditions is dispensed by mail
    18  order pharmacies, not local retail pharmacies. As part of their business
    19  model, mail order pharmacies engage the services of  third-party  common
    20  carriers  to deliver prescriptions. This can lead to inadvertent disclo-
    21  sure of and conjecture regarding  private  information  to  such  common
    22  carriers'  employees,  as well as the recipient's neighbors who may note
    23  the regular deliveries of prescription  medications  to  the  recipient,
    24  especially if the packages are left at the recipient's door.
    25    (d) While prescription benefit plans have not foreclosed the possibil-
    26  ity  for  a  local network retail pharmacy to dispense specialty medica-
    27  tions, many of these plans will not allow a local network retail pharma-
    28  cy  to  dispense  such  prescriptions  unless  the  pharmacy  agrees  to
    29  additional  contractual terms and conditions. Many specialty medications
    30  do not require any additional or special services for proper dispensing;
    31  they have been deemed to be specialty  prescriptions  because  they  are
    32  expensive.  While  these additional terms and conditions make sense when
    33  there is no possibility for face-to-face interactions between a  pharma-
    34  cist and the patient, they present an undue burden to local retail phar-
    35  macies seeking to dispense specialty medications.
    36    (e)  Requiring  prescription  benefit plan enrollees to remit a higher
    37  co-payment or pay the full retail  price  for  a  prescription  that  is
    38  dispensed  by  a network retail pharmacy instead of a network mail order
    39  pharmacy is not in the best interest of such enrollees as it effectively
    40  forces an enrollee to use only mail  order  prescription  pharmacies  by
    41  making all alternatives cost prohibitive.
    42    (f)  Similarly,  requiring local network retail pharmacies to accept a
    43  lower payment for dispensing specialty prescription drugs is not in  the
    44  best  interest  of  the prescription benefit plan's enrollees because it
    45  may become financially difficult for a network retail pharmacy to remain
    46  in the prescription benefit plan's network. The result of this  practice
    47  is  the  complete  elimination  of or a reduction in the number of local
    48  network retail pharmacies available to prescription benefit plan  enrol-
    49  lees.
    50    2.  The  legislature  declares  that  it is the express policy of this
    51  state to safeguard the public against inadvertent disclosure of  medical
    52  conditions, unnecessary complexity in obtaining prescription medications
    53  and financial hardship, and to foster and encourage competition and fair
    54  dealing   in   the  field  of  pharmaceutical  services  by  prohibiting
    55  prescription benefit plans from requiring that certain prescriptions  be
    56  filled  by  a  network mail order pharmacy, harmful financial practices,

        A. 5877                             3

     1  and other unfair practices that have been conducted by some prescription
     2  benefit plans.
     3    3.  The  legislature further finds that prescription benefit plans may
     4  have a significant impact upon the economy and well-being of this  state
     5  and  its local communities, and therefore the provisions of this article
     6  are necessary to promote the public welfare.
     7    4. The intent and purposes of this article are to provide prescription
     8  benefit plan enrollees with the ability to  choose  whether  to  fill  a
     9  prescription  at a local network retail pharmacy or a network mail order
    10  pharmacy without incurring additional costs for choosing to  have  their
    11  prescriptions  filled by a local network retail pharmacy; to provide all
    12  network retail pharmacies with the ability to contract with prescription
    13  benefit plans to dispense prescriptions that have been deemed to be mail
    14  order prescriptions  by  the  pharmacy  benefit  manager  without  being
    15  required  to  agree  to additional contractual terms and conditions that
    16  are applicable to mail order pharmacies where there is  no  face-to-face
    17  interaction  with prescription benefit plan enrollees, such as a twenty-
    18  four hour customer service hotline; and to  ensure  that  local  network
    19  retail   pharmacies   are   not   monetarily  penalized  for  dispensing
    20  prescriptions that  the  pharmacy  benefit  manager  has  deemed  to  be
    21  specialty  drug prescriptions requiring dispensing by a mail order phar-
    22  macy.
    23    § 901. Definitions. As used in this article:
    24    1. "Mail order pharmacy" shall mean a pharmacy whose primary  business
    25  is  to  receive  prescriptions  by  mail,  telefax or through electronic
    26  submissions and to dispense medication to patients through  the  use  of
    27  the  United States mail or other common or contract carrier services and
    28  provide any consultation with patients electronically rather than  face-
    29  to-face.
    30    2.  "Retail  pharmacy" shall mean a pharmacy whose primary business is
    31  to receive prescriptions directly from patients  or  through  electronic
    32  submissions  and to dispense medication directly to patients and provide
    33  face-to-face consultation with patients. For purposes of  this  subdivi-
    34  sion,  the term "patient" shall include a person who is acting on behalf
    35  of a patient.
    36    3. "Prescription benefit plan" shall mean any benefit plan other  than
    37  a  state public health plan, as defined in subdivision eleven of section
    38  two hundred seventy of the public health law,  or  an  employee  welfare
    39  benefit  plan,  as defined in subsection one of section one thousand two
    40  of the United  States  code,  that  provides  prescription  benefits,  a
    41  governmental  plan,  as  defined in subsection thirty-two of section one
    42  thousand two of the United States code, a church  plan,  as  defined  in
    43  subsection thirty-three of section one thousand two of the United States
    44  code,  or  a plan is maintained solely for the purpose of complying with
    45  applicable workers' compensation laws or  unemployment  compensation  or
    46  disability  insurance  laws, that includes prescription drug benefits to
    47  enrollees and their dependents.
    48    4. "Specialty prescription drug" shall mean a prescription  drug  that
    49  is  used  to treat a chronic, complex or rare condition, has been desig-
    50  nated in the  prescription  benefit  plan's  formulary  as  a  specialty
    51  prescription  drug, and will only be covered by the prescription benefit
    52  plan if it is dispensed by a network mail order pharmacy or  an  author-
    53  ized network retail pharmacy.
    54    5.  "Network" shall mean a mail order pharmacy or retail pharmacy that
    55  participates in a prescription benefit plan.

        A. 5877                             4

     1    6. "Mail order prescription" shall mean any prescription drug, includ-
     2  ing,  but  not  limited  to  specialty  prescription   drugs,   that   a
     3  prescription benefit plan requires be filled by a mail order pharmacy or
     4  an  authorized  network  retail  pharmacy  in  order  for such dispensed
     5  prescription to be covered by such plan.
     6    7.  "Prescription  benefit plan enrollee" or "enrollee" shall mean the
     7  person who is enrolled in the prescription benefit plan and his  or  her
     8  spouse and dependent children who are enrolled in the prescription bene-
     9  fit plan as dependents of such person.
    10    8.  "Authorized  network retail pharmacy" shall mean a retail pharmacy
    11  that, when used by a member to fill  a  mail  order  prescription,  such
    12  prescription  will  be covered by the member's prescription benefit plan
    13  as if such pharmacy was a mail order pharmacy.
    14    § 902. Prohibited conduct. 1. Notwithstanding any provision of law  to
    15  the  contrary,  it  shall be unlawful for a prescription benefit plan to
    16  require  an  enrollee  or  an  enrollee's  dependent   to   obtain   any
    17  prescription drug from a network mail order pharmacy in order to receive
    18  coverage from such plan for such prescription.
    19    2.  Notwithstanding  any provision of law to the contrary, it shall be
    20  unlawful for a prescription benefit plan to require that an enrollee  or
    21  an  enrollee's  dependent  remit  a higher co-payment for a prescription
    22  when such prescription is dispensed by a network retail pharmacy.
    23    3. Notwithstanding any provision of law to the contrary, it  shall  be
    24  unlawful  for  a  prescription  benefit plan to require a network retail
    25  pharmacy to agree to additional contractual terms and conditions that go
    26  beyond the industry standard and are not reasonable and  relevant  as  a
    27  condition  precedent  to allowing such a retail pharmacy to dispense any
    28  prescription drug, including mail order prescription drugs, as a network
    29  provider.
    30    4. Notwithstanding any provision of law to the contrary, it  shall  be
    31  unlawful   for   a   mail  order  pharmacy  to  automatically  refill  a
    32  prescription benefit  plan  enrollee's  prescription  without  obtaining
    33  permission for such automatic refills from such enrollee, or in the case
    34  of  an  enrollee's  dependent  child,  the  enrollee  or child's parent;
    35  provided, however, any permission granted for  automatic  refills  shall
    36  expire  after six months and may be renewed thereafter for intervals not
    37  to exceed six months.
    38    5. Notwithstanding any provision of law to the contrary, it  shall  be
    39  unlawful  for  any  mail  order pharmacy to retain an enrollee's payment
    40  information for future use without the  consent  of  the  enrollee.  For
    41  purposes  of  this subdivision, payment information includes, but is not
    42  limited to, credit card information, debit card  information,  and  bank
    43  account information.
    44    § 903. Action to recover damages by an enrollee. 1. Any person injured
    45  by  a  violation of this article may bring an action for the recovery of
    46  damages. Judgment may be entered in favor of such person  in  an  amount
    47  not  to  exceed  three  times the actual damages or one hundred dollars,
    48  whichever is greater. The court may award reasonable attorney's fees  to
    49  a prevailing plaintiff.
    50    2.  Nothing  in  this  article  shall be construed so as to nullify or
    51  impair any right or rights which a prescription benefit plan enrollee or
    52  such enrollee's dependent may have against a seller at  common  law,  by
    53  statute, or otherwise.
    54    §  904.  Violations.  Any  mail order pharmacy or prescription benefit
    55  plan, including its employees and agents, that violates any provision of

        A. 5877                             5

     1  this article, shall be liable for a civil fine of not more than  twenty-
     2  five hundred dollars for each violation.
     3    § 905. Enforcement by attorney general. In addition to the other reme-
     4  dies  provided,  whenever  there  shall  be a violation of this article,
     5  application may be made by the attorney  general  in  the  name  of  the
     6  people  of  the state to a court having jurisdiction to issue an injunc-
     7  tion, and upon notice to the respondent of not fewer than five days,  to
     8  enjoin and restrain the continuance of the violation. If it shall appear
     9  to  the  satisfaction of the court or justice that the defendant has, in
    10  fact, violated this article, an injunction may be issued by  such  court
    11  or  justice,  enjoining  and  restraining any further violation, without
    12  requiring proof that any person has, in fact, been  injured  or  damaged
    13  thereby.  In  any  such proceeding, the court may make allowances to the
    14  attorney general as provided in paragraph  six  of  subdivision  (a)  of
    15  section  eighty-three hundred three of the civil practice law and rules,
    16  and direct restitution.  Whenever  the  court  shall  determine  that  a
    17  violation  of  this  article  has occurred, the court may impose a civil
    18  penalty of not more than ten thousand dollars for each violation.
    19    § 906. Applicability.  This article shall not apply  to  any  employee
    20  welfare  benefit plan, as defined in subsection one of section one thou-
    21  sand two of the United States code, that provides prescription benefits,
    22  governmental plan, as defined in subsection thirty-two  of  section  one
    23  thousand  two  of  the  United  States  code, church plan, as defined in
    24  subsection thirty-three of section one thousand two of the United States
    25  code, or a plan is maintained solely for the purpose of  complying  with
    26  applicable  workers'  compensation  laws or unemployment compensation or
    27  disability insurance laws.
    28    § 2. This act shall take effect on the ninetieth day  after  it  shall
    29  have  become a law and shall apply to contracts entered into, amended or
    30  renewed on and after such date.
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