Bill Text: NY S04786 | 2023-2024 | General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Enacts the "New York affordable drug manufacturing act" to direct the commissioner of health to enter into partnerships to increase competition, lower prices, and address shortages in the market for generic prescription drugs, to reduce the cost of prescription drugs for public and private purchasers, taxpayers, and consumers, and to increase patient access to affordable drugs.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Engrossed) 2024-01-30 - referred to health [S04786 Detail]

Download: New_York-2023-S04786-Introduced.html

---

                STATE OF NEW YORK
        ________________________________________________________________________

                                          4786

                               2023-2024 Regular Sessions

                    IN SENATE

                                    February 14, 2023
                                       ___________

        Introduced  by  Sen.  RIVERA -- read twice and ordered printed, and when
          printed to be committed to the Committee on Health

        AN ACT to amend the public health law, in relation to enacting the  "New
          York affordable drug manufacturing act"

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

     1    Section 1. Short title. This act shall be known and may  be  cited  as
     2  the "New York affordable drug manufacturing act".
     3    §  2.  Article 2-A of the public health law is amended by adding a new
     4  title IV to read as follows:
     5                                  TITLE IV
     6                 NEW YORK AFFORDABLE DRUG MANUFACTURING ACT
     7  Section 282. Definitions.
     8          283. Partnerships; production and distribution  of  prescription
     9                 drugs.
    10          284. Reporting.
    11          285. Proprietary information.
    12    § 282. Definitions.  As  used in this title, the following terms shall
    13  have the following meanings:
    14    1. "Generic drug" means a drug that is approved pursuant  to  subdivi-
    15  sion  (j) of section 355 of the Federal Food, Drug, and Cosmetic Act (21
    16  U.S.C.  Sec. 301 et seq.), or a biosimilar, as defined under the federal
    17  Public Health Service Act (42 U.S.C. Sec. 262).
    18    2. "Partnerships" shall include, but are not  limited  to,  agreements
    19  for the procurement of generic prescription drugs by way of contracts or
    20  purchasing  by  a  payer,  state  governmental  agency, group purchasing
    21  organization, nonprofit organization, or other entity.
    22    § 283.  Partnerships;  production  and  distribution  of  prescription
    23  drugs. 1. (a) The commissioner shall enter into partnerships, consistent
    24  with  paragraph  (b) of subdivision two of this section, in consultation
    25  with all appropriate state agencies and  the  department  of  health  or

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08090-01-3
        S. 4786                             2

     1  equivalent  institution  of any other state as determined by the commis-
     2  sioner, to increase competition, lower prices, and address shortages  in
     3  the  market  for  generic  prescription  drugs,  to  reduce  the cost of
     4  prescription  drugs  for  public  and private purchasers, taxpayers, and
     5  consumers, and to increase patient access to affordable drugs.
     6    (b) The department shall have the ability to hire staff to oversee and
     7  project-manage the partnerships for  manufacturing  or  distribution  of
     8  generic prescription drugs.
     9    2. (a) The commissioner shall enter into partnerships resulting in the
    10  production  or  distribution  of  generic  prescription  drugs, with the
    11  intent that these drugs be made widely available to public  and  private
    12  purchasers, facilities licensed pursuant to article twenty-eight of this
    13  chapter, and pharmacies as defined in section six thousand eight hundred
    14  two of the education law, as appropriate. The generic prescription drugs
    15  shall  be  produced  or  distributed  by  a drug company or generic drug
    16  manufacturer that is registered with the United  States  Food  and  Drug
    17  Administration.
    18    (b)  (i)  The commissioner shall only enter into partnerships pursuant
    19  to paragraph (a) of this subdivision to produce a  generic  prescription
    20  drug  at a price that results in savings, targets failures in the market
    21  for generic drugs, and improves patient  access  to  affordable  medica-
    22  tions.
    23    (ii)  For  top  drugs  identified  pursuant  to the criteria listed in
    24  subparagraph (v) of this paragraph, the department  shall  determine  if
    25  viable  pathways  exist  for  partnerships  to manufacture or distribute
    26  generic prescription drugs by  examining  the  relevant  legal,  market,
    27  policy, and regulatory factors.
    28    (iii) The department shall consider the following, if applicable, when
    29  setting the price of the generic prescription drug:
    30    (1) United States Food and Drug Administration user fees.
    31    (2)  Abbreviated new drug application acquisition costs amortized over
    32  a five-year period.
    33    (3) Mandatory rebates.
    34    (4) Total contracting and production costs for the drug,  including  a
    35  reasonable  amount  for  administrative,  operating,  and rate-of-return
    36  expenses of the drug company or generic drug manufacturer.
    37    (5) Research and development costs attributed to the drug over a five-
    38  year period.
    39    (6) Other initial start-up costs amortized over a five-year period.
    40    (iv) Each drug shall be made available  to  providers,  patients,  and
    41  purchasers at a transparent price and without rebates, other than feder-
    42  ally required rebates.
    43    (v)   The   department  shall  prioritize  the  selection  of  generic
    44  prescription drugs that have the greatest impact on lowering drug  costs
    45  to  patients,  increasing  competition  and  addressing shortages in the
    46  prescription drug market, improving public health, or reducing the  cost
    47  of prescription drugs to public and private purchasers.
    48    (c)  (i) In identifying generic prescription drugs to be produced, the
    49  department shall consider prescription  drug  retail  price  lists  made
    50  pursuant to section two hundred seventy-eight of this article.
    51    (ii)  The  partnerships entered into pursuant to paragraph (a) of this
    52  subdivision shall include the production of at least one form  of  insu-
    53  lin,  provided that a viable pathway for manufacturing a more affordable
    54  form of insulin exists.
    55    (iii) The department shall prioritize drugs for chronic and  high-cost
    56  conditions.
        S. 4786                             3

     1    (d)  The department shall consult with all of the following public and
     2  private  purchasers  to  assist  in  developing  a   list   of   generic
     3  prescription  drugs  to  be manufactured or distributed through partner-
     4  ships and to determine the volume of each generic prescription drug that
     5  can  be procured over a multiyear period to support a market for a lower
     6  cost generic prescription drug:
     7    (i) The department of mental  hygiene,  the  office  for  people  with
     8  developmental  disabilities,  the  office  of  general services, and the
     9  department of corrections and community  supervision,  or  the  entities
    10  acting on behalf of each of those state purchasers.
    11    (ii) Health insurers licensed pursuant to the insurance law.
    12    (iii) Hospitals.
    13    (iv) Any other entity as determined by the commissioner.
    14    (e)  Before  effectuating  a partnership pursuant to this section, the
    15  commissioner shall determine minimum thresholds for  procurement  of  an
    16  entity's expected volume of a targeted drug from the company or manufac-
    17  turer over a multiyear period.
    18    (f)  All  state  agencies  shall  be required to purchase prescription
    19  drugs from the department or entities that contract or partner with  the
    20  department pursuant to this chapter.
    21    (g)  The department shall not be required to consult with every entity
    22  listed in subparagraphs (ii), (iii) and (iv) of paragraph  (d)  of  this
    23  subdivision,  so  long  as  purchaser  engagement  includes a reasonable
    24  representation from these groups.
    25    § 284. Reporting. 1. On or before January first, two thousand  twenty-
    26  six,  the  department  shall  submit  a  report  to the legislature that
    27  assesses the feasibility of directly manufacturing generic  prescription
    28  drugs and selling generic prescription drugs at a fair price. The report
    29  shall  include,  but not be limited to, an analysis of governance struc-
    30  ture options for manufacturing functions, including chartering a private
    31  organization, a public-private partnership, or a public board of  direc-
    32  tors.
    33    2.  On or before March first, two thousand twenty-five, the department
    34  shall report to the legislature on both of the following:
    35    (a) A description of the status of all drugs targeted under this chap-
    36  ter.
    37    (b) An analysis of how the activities of  the  department  may  impact
    38  competition, access to targeted drugs, the costs of those drugs, and the
    39  costs of generic prescription drugs to public and private purchasers.
    40    §  285.  Proprietary information. Notwithstanding any provision of law
    41  to the contrary, all nonpublic information and documents obtained by the
    42  department pursuant to this title shall not be required to be  disclosed
    43  pursuant to article six of the public officers law.
    44    § 3. Severability. If any clause, sentence, paragraph, section or part
    45  of  this act shall be adjudged by any court of competent jurisdiction to
    46  be invalid and after exhaustion of  all  further  judicial  review,  the
    47  judgment  shall  not affect, impair or invalidate the remainder thereof,
    48  but shall be confined in its operation to the  clause,  sentence,  para-
    49  graph,  section or part of this act directly involved in the controversy
    50  in which the judgment shall have been rendered.
    51    § 4. This act shall take effect immediately.