Bill Text: NY A09086 | 2023-2024 | General Assembly | Introduced
Bill Title: Relates to reducing the cost of prescription drugs by establishing maximum wholesale drug prices that are the same as the prices in Canada.
Spectrum: Strong Partisan Bill (Democrat 22-2)
Status: (Introduced) 2024-02-06 - referred to insurance [A09086 Detail]
Download: New_York-2023-A09086-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 9086 IN ASSEMBLY February 6, 2024 ___________ Introduced by M. of A. SHRESTHA -- read once and referred to the Commit- tee on Insurance AN ACT to amend the insurance law, in relation to requiring a referenced rate for prescription drugs The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The insurance law is amended by adding a new section 111-b 2 to read as follows: 3 § 111-b. Pilot program on referenced rate for prescription drugs. (a) 4 A pilot program is hereby created to study the possibility of control- 5 ling excessive and unconscionable prices for prescription drugs. 6 (b) Definitions. As used in this section, the following terms shall 7 have the following meanings: 8 (1) "Prescription drug" shall have the same meaning as in subdivision 9 seven of section sixty-eight hundred two of the education law, for which 10 a prescription is required under the federal food, drug and cosmetic 11 act. Any drug that does not require a prescription under such act, but 12 which would otherwise meet the criteria under article two-A of the 13 public health law for inclusion on the preferred drug list may be added 14 to the preferred drug list under article two-A of the public health law; 15 and, if so included, shall be considered to be a prescription drug for 16 purposes of this section; provided that it shall be eligible for 17 reimbursement under a state public health plan when ordered by a pres- 18 criber authorized to prescribe under the state public health plan and 19 the prescription is subject to the applicable provisions of this section 20 and paragraph (a) of subdivision four of section three hundred sixty- 21 five-a of the social services law. 22 (2) "Wholesale acquisition cost" shall have the same meaning as 23 defined in 42 U.S.C. § 1395w-3a. 24 (3) "State entity" means any agency of the state government that 25 purchases prescription drugs on behalf of the state for a person whose 26 health care is paid for by the state, including any agent, vendor, 27 fiscal agent, contractor, or other party acting on behalf of the state. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02470-03-4A. 9086 2 1 "State entity" shall not include the medical assistance program estab- 2 lished pursuant to 42 U.S.C. § 1396 et seq. 3 (4) "Health plan" shall have the same meaning as defined in paragraph 4 (a) of subdivision one of section two hundred eighty-a of the public 5 health law. 6 (5) "Referenced rate" means the maximum rate established by the super- 7 intendent utilizing the wholesale acquisition cost and other pricing 8 data described in subsection (e) of this section. 9 (6) "Referenced drugs" means any prescription drug subject to a refer- 10 enced rate. 11 (c) Payment in excess of referenced rate prohibited. (1) It shall be a 12 violation of this section for a state entity or health plan to purchase 13 the referenced drugs subject to this pilot program and which shall be 14 dispensed or delivered to a consumer in the state, whether directly or 15 through a distributor, for a cost higher than the referenced rate as 16 determined pursuant to paragraph two of subsection (e) of this section. 17 (2) It shall be a violation of this section for any pharmacy licensed 18 in this state to purchase for sale or distribution referenced drugs for 19 a cost that exceeds the referenced rate to a person whose health care is 20 provided by a state entity or health plan. 21 (d) Costly prescription drugs. As part of this pilot program, the 22 director of the employee benefits division within the department of 23 civil service shall identify the five most costly prescription drugs 24 based upon net price times utilization. 25 (e) Referenced drugs determined. (1) Beginning with calendar year two 26 thousand twenty-five, no later than June thirtieth, the director of the 27 employee benefits division within the department of civil service shall 28 transmit to the superintendent the list of prescription drugs referenced 29 in subsection (d) of this section. For each of these prescription drugs, 30 such director shall also provide the total net spend on each of those 31 prescription drugs for the previous calendar year. 32 (2) Utilizing the information described in paragraph one of this 33 subsection, no later than November first, two thousand twenty-five, the 34 superintendent shall create and publish a list on the department's 35 website of such drugs that shall be subject to the referenced rate. 36 (3) The superintendent shall determine the referenced rate by compar- 37 ing the wholesale acquisition cost to the cost from all of the following 38 sources: 39 (A) Ontario Ministry of Health and long term care and most recently 40 published on the Ontario Drug Benefit Formulary; 41 (B) Regie de l'Assurance Maladie du Quebec and most recently published 42 on the Quebec Public Drug Programs List of Medications; 43 (C) British Columbia Ministry of Health and most recently published on 44 the BC Pharmacare Formulary; and 45 (D) Alberta Ministry of Health and most recently published on the 46 Alberta Drug Benefit List. 47 (4) The referenced rate for each prescription drug shall be calculated 48 as the lowest cost among those resources and the wholesale acquisition 49 cost. If a specific referenced drug is not included within the resources 50 described in paragraph three of this subsection, then, for the purpose 51 of determining the referenced rate for that drug, the superintendent 52 shall utilize the ceiling price for drugs as reported by the government 53 of Canada Patented Medicine Prices Review Board. 54 (5) The superintendent shall calculate the savings that are expected 55 to be achieved by subjecting prescription drugs to the referenced rate 56 for one plan year. In making this determination the superintendent shallA. 9086 3 1 consult with the director of the employee benefits division within the 2 department of civil service and the drug accountability board. 3 (6) The superintendent shall promulgate such rules and regulations as 4 may be necessary to carry out this pilot program. 5 (f) Application of savings. (1) Any savings generated because of the 6 requirements pursuant to subsection (c) of this section shall be used to 7 reduce costs to consumers. Any state entity or health plan shall calcu- 8 late such savings and utilize such savings directly to reduce costs for 9 its members or insureds. 10 (2) No later than April first of the calendar year after the conclu- 11 sion of the pilot program, each state entity or health plan subject to 12 this section shall submit to the superintendent a report describing the 13 savings achieved for each referenced drug and how those savings were 14 used to achieve the requirements of paragraph one of this subsection. 15 The superintendent shall submit a report of the savings, if any, of the 16 pilot program conducted pursuant to this section, to the governor, the 17 temporary president of the senate, the speaker of the assembly, and the 18 minority leaders of the senate and assembly no later than one hundred 19 eighty days following the conclusion of the plan year subject to this 20 section. The report shall also include recommendations on the feasibil- 21 ity of expanding this program to other prescription drugs, recommenda- 22 tions on improvements to the program, and any other findings, recommen- 23 dations, or conclusions the superintendent deems necessary to understand 24 the broader effects of this pilot program. 25 (g) Withdrawal of referenced drugs for sale; prohibited. (1) It shall 26 be a violation of this section for any manufacturer or distributor of a 27 referenced drug to withdraw that drug from sale or distribution within 28 this state for the purpose of avoiding the impact of this pilot program. 29 (2) Any manufacturer that intends to withdraw a referenced drug from 30 sale or distribution from within the state shall provide a notice of 31 withdrawal in writing to the superintendent and to the attorney general 32 not less than one hundred eighty days prior to such withdrawal. 33 (3) The superintendent shall assess a penalty on any manufacturer or 34 distributor that they determine to have withdrawn a referenced drug from 35 distribution or sale in the state in violation of paragraph one or two 36 of this subsection. With respect to each referenced drug for which the 37 superintendent has determined the manufacturer or distributor has with- 38 drawn from the market, the penalty shall be equal to: 39 (A) five hundred thousand dollars; or 40 (B) the amount of annual savings determined by the superintendent as 41 described in paragraph five of this subsection, whichever is greater. 42 (4) It shall be a violation of this section for any manufacturer or 43 distributor of a referenced drug to refuse to negotiate in good faith 44 with any payor or seller of prescription drugs a price that is within 45 the referenced rate as determined in paragraph two of subsection (e) of 46 this section. 47 (5) The superintendent shall assess a penalty on any manufacturer or 48 distributor that it determines has failed to negotiate in good faith in 49 violation of paragraph four of this subsection. With respect to each 50 referenced drug for which the superintendent has determined the manufac- 51 turer or distributor has failed to negotiate in good faith, the penalty 52 shall be equal to: 53 (A) five hundred thousand dollars; or 54 (B) the amount of annual savings determined by the superintendent as 55 described in this subdivision, whichever is greater.A. 9086 4 1 § 2. This act shall take effect June 1, 2024. Effective immediately, 2 the addition, amendment and/or repeal of any rule or regulation neces- 3 sary for the implementation of this act on its effective date are 4 authorized to be made and completed on or before such effective date.
