S T A T E O F N E W Y O R K
________________________________________________________________________
2973
2019-2020 Regular Sessions
I N A S S E M B L Y
January 28, 2019
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Introduced by M. of A. JOYNER, ROZIC, CARROLL, LAVINE, ZEBROWSKI,
L. ROSENTHAL, MONTESANO, GALEF, COLTON, ORTIZ, COOK, GLICK, D'URSO,
CROUCH, DICKENS, CRESPO, JAFFEE, WOERNER, BENEDETTO, GIGLIO,
JEAN-PIERRE, PEOPLES-STOKES, BRABENEC, DE LA ROSA, BLAKE, BARRETT --
Multi-Sponsored by -- M. of A. ABBATE, BLANKENBUSH, BRAUNSTEIN,
ENGLEBRIGHT, HEVESI, McDONOUGH, NOLAN, SIMON, STEC, THIELE, WALSH,
WRIGHT -- read once and referred to the Committee 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:
Section 1. The general business law is amended by adding a new article
40 to read as follows:
ARTICLE 40
MAIL ORDER PHARMACIES
SECTION 900. LEGISLATIVE FINDINGS AND DECLARATIONS; PURPOSES.
901. DEFINITIONS.
902. PROHIBITED CONDUCT.
903. ACTION TO RECOVER DAMAGES BY AN ENROLLEE.
904. VIOLATIONS.
905. ENFORCEMENT BY ATTORNEY GENERAL.
906. APPLICABILITY.
§ 900. LEGISLATIVE FINDINGS AND DECLARATIONS; PURPOSES. 1. THE LEGIS-
LATURE FINDS AND DECLARES THAT:
(A) THE NUMBER OF AMERICANS WHO ARE PRESCRIBED THREE OR MORE MEDICA-
TIONS IS GROWING AT AN ALARMING RATE, WITH APPROXIMATELY TEN PERCENT OF
THE POPULATION TAKING FIVE OR MORE PRESCRIPTION MEDICATIONS. THESE AMER-
ICANS FACE MANY CHALLENGES WHEN THEY ARE REQUIRED TO RECEIVE SOME OF
THEIR PRESCRIPTIONS FROM A MAIL ORDER PHARMACY WHILE RECEIVING OTHER
PRESCRIPTIONS FROM A LOCAL RETAIL PHARMACY. THESE CHALLENGES INCLUDE
THE DISCOVERY OF POTENTIAL ADVERSE INTERACTIONS AMONG THEIR PRESCRIPTION
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00275-01-9
A. 2973 2
DRUGS, COMPREHENSIVE COUNSELING, THE COORDINATION AND TIMING OF THE
RECEIPT OF PRESCRIPTIONS, AND THE ABILITY TO KEEP INFORMATION REGARDING
THEIR MEDICAL CONDITION OR CONDITIONS PRIVATE.
(B) AMERICANS WITH MULTIPLE PRESCRIPTIONS BENEFIT FROM THE SERVICES
PROVIDED BY A LOCAL RETAIL PHARMACY BECAUSE SUCH LOCAL SOURCE WILL NOT
ONLY BE ABLE TO DETERMINE IF THERE ARE ANY HARMFUL OR POTENTIALLY HARM-
FUL DRUG INTERACTIONS BUT CAN ALSO PROVIDE IMMEDIATE FACE-TO-FACE,
CONFIDENTIAL COUNSELING TO THE PATIENT REGARDING ANY AND ALL OF HIS OR
HER PRESCRIBED DRUGS. FOR PATIENTS WHO ARE ENROLLED IN A PRESCRIPTION
BENEFIT PLAN, ENSURING THAT THE PLAN'S NETWORK INCLUDES LOCAL RETAIL
PHARMACIES HAS BECOME OF GREAT IMPORTANCE. MANDATING THAT CERTAIN
PRESCRIPTIONS MUST BE FILLED BY A MAIL ORDER PHARMACY IS NOT IN THE BEST
INTEREST OF ALL PRESCRIPTION BENEFIT PLAN ENROLLEES AND SUCH
PRESCRIPTION BENEFIT PLAN ENROLLEES SHOULD BE GIVEN THE CHOICE REGARDING
WHERE A PRESCRIPTION WILL BE FILLED.
(C) MANY AMERICANS WISH TO KEEP INFORMATION REGARDING THEIR
PRESCRIPTIONS AND HEALTH CONDITIONS PRIVATE. SOME AMERICANS WILL CHOOSE
TO DISCLOSE INFORMATION TO THEIR FAMILY, WHILE OTHERS MAY CHOOSE NOT TO
DISCLOSE ANY INFORMATION TO ANY PERSON. MANY PEOPLE KNOW THAT MEDICATION
USED TO TREAT CHRONIC, COMPLEX OR RARE CONDITIONS IS DISPENSED BY MAIL
ORDER PHARMACIES, NOT LOCAL RETAIL PHARMACIES. AS PART OF THEIR BUSINESS
MODEL, MAIL ORDER PHARMACIES ENGAGE THE SERVICES OF THIRD-PARTY COMMON
CARRIERS TO DELIVER PRESCRIPTIONS. THIS CAN LEAD TO INADVERTENT DISCLO-
SURE OF AND CONJECTURE REGARDING PRIVATE INFORMATION TO SUCH COMMON
CARRIERS' EMPLOYEES, AS WELL AS THE RECIPIENT'S NEIGHBORS WHO MAY NOTE
THE REGULAR DELIVERIES OF PRESCRIPTION MEDICATIONS TO THE RECIPIENT,
ESPECIALLY IF THE PACKAGES ARE LEFT AT THE RECIPIENT'S DOOR.
(D) WHILE PRESCRIPTION BENEFIT PLANS HAVE NOT FORECLOSED THE POSSIBIL-
ITY FOR A LOCAL NETWORK RETAIL PHARMACY TO DISPENSE SPECIALTY MEDICA-
TIONS, MANY OF THESE PLANS WILL NOT ALLOW A LOCAL NETWORK RETAIL PHARMA-
CY TO DISPENSE SUCH PRESCRIPTIONS UNLESS THE PHARMACY AGREES TO
ADDITIONAL CONTRACTUAL TERMS AND CONDITIONS. MANY SPECIALTY MEDICATIONS
DO NOT REQUIRE ANY ADDITIONAL OR SPECIAL SERVICES FOR PROPER DISPENSING;
THEY HAVE BEEN DEEMED TO BE SPECIALTY PRESCRIPTIONS BECAUSE THEY ARE
EXPENSIVE. WHILE THESE ADDITIONAL TERMS AND CONDITIONS MAKE SENSE WHEN
THERE IS NO POSSIBILITY FOR FACE-TO-FACE INTERACTIONS BETWEEN A PHARMA-
CIST AND THE PATIENT, THEY PRESENT AN UNDUE BURDEN TO LOCAL RETAIL PHAR-
MACIES SEEKING TO DISPENSE SPECIALTY MEDICATIONS.
(E) REQUIRING PRESCRIPTION BENEFIT PLAN ENROLLEES TO REMIT A HIGHER
CO-PAYMENT OR PAY THE FULL RETAIL PRICE FOR A PRESCRIPTION THAT IS
DISPENSED BY A NETWORK RETAIL PHARMACY INSTEAD OF A NETWORK MAIL ORDER
PHARMACY IS NOT IN THE BEST INTEREST OF SUCH ENROLLEES AS IT EFFECTIVELY
FORCES AN ENROLLEE TO USE ONLY MAIL ORDER PRESCRIPTION PHARMACIES BY
MAKING ALL ALTERNATIVES COST PROHIBITIVE.
(F) SIMILARLY, REQUIRING LOCAL NETWORK RETAIL PHARMACIES TO ACCEPT A
LOWER PAYMENT FOR DISPENSING SPECIALTY PRESCRIPTION DRUGS IS NOT IN THE
BEST INTEREST OF THE PRESCRIPTION BENEFIT PLAN'S ENROLLEES BECAUSE IT
MAY BECOME FINANCIALLY DIFFICULT FOR A NETWORK RETAIL PHARMACY TO REMAIN
IN THE PRESCRIPTION BENEFIT PLAN'S NETWORK. THE RESULT OF THIS PRACTICE
IS THE COMPLETE ELIMINATION OF OR A REDUCTION IN THE NUMBER OF LOCAL
NETWORK RETAIL PHARMACIES AVAILABLE TO PRESCRIPTION BENEFIT PLAN ENROL-
LEES.
2. THE LEGISLATURE DECLARES THAT IT IS THE EXPRESS POLICY OF THIS
STATE TO SAFEGUARD THE PUBLIC AGAINST INADVERTENT DISCLOSURE OF MEDICAL
CONDITIONS, UNNECESSARY COMPLEXITY IN OBTAINING PRESCRIPTION MEDICATIONS
AND FINANCIAL HARDSHIP, AND TO FOSTER AND ENCOURAGE COMPETITION AND FAIR
A. 2973 3
DEALING IN THE FIELD OF PHARMACEUTICAL SERVICES BY PROHIBITING
PRESCRIPTION BENEFIT PLANS FROM REQUIRING THAT CERTAIN PRESCRIPTIONS BE
FILLED BY A NETWORK MAIL ORDER PHARMACY, HARMFUL FINANCIAL PRACTICES,
AND OTHER UNFAIR PRACTICES THAT HAVE BEEN CONDUCTED BY SOME PRESCRIPTION
BENEFIT PLANS.
3. THE LEGISLATURE FURTHER FINDS THAT PRESCRIPTION BENEFIT PLANS MAY
HAVE A SIGNIFICANT IMPACT UPON THE ECONOMY AND WELL-BEING OF THIS STATE
AND ITS LOCAL COMMUNITIES, AND THEREFORE THE PROVISIONS OF THIS ARTICLE
ARE NECESSARY TO PROMOTE THE PUBLIC WELFARE.
4. THE INTENT AND PURPOSES OF THIS ARTICLE ARE TO PROVIDE PRESCRIPTION
BENEFIT PLAN ENROLLEES WITH THE ABILITY TO CHOOSE WHETHER TO FILL A
PRESCRIPTION AT A LOCAL NETWORK RETAIL PHARMACY OR A NETWORK MAIL ORDER
PHARMACY WITHOUT INCURRING ADDITIONAL COSTS FOR CHOOSING TO HAVE THEIR
PRESCRIPTIONS FILLED BY A LOCAL NETWORK RETAIL PHARMACY; TO PROVIDE ALL
NETWORK RETAIL PHARMACIES WITH THE ABILITY TO CONTRACT WITH PRESCRIPTION
BENEFIT PLANS TO DISPENSE PRESCRIPTIONS THAT HAVE BEEN DEEMED TO BE MAIL
ORDER PRESCRIPTIONS BY THE PHARMACY BENEFIT MANAGER WITHOUT BEING
REQUIRED TO AGREE TO ADDITIONAL CONTRACTUAL TERMS AND CONDITIONS THAT
ARE APPLICABLE TO MAIL ORDER PHARMACIES WHERE THERE IS NO FACE-TO-FACE
INTERACTION WITH PRESCRIPTION BENEFIT PLAN ENROLLEES, SUCH AS A TWENTY-
FOUR HOUR CUSTOMER SERVICE HOTLINE; AND TO ENSURE THAT LOCAL NETWORK
RETAIL PHARMACIES ARE NOT MONETARILY PENALIZED FOR DISPENSING
PRESCRIPTIONS THAT THE PHARMACY BENEFIT MANAGER HAS DEEMED TO BE
SPECIALTY DRUG PRESCRIPTIONS REQUIRING DISPENSING BY A MAIL ORDER PHAR-
MACY.
§ 901. DEFINITIONS. AS USED IN THIS ARTICLE:
1. "MAIL ORDER PHARMACY" SHALL MEAN A PHARMACY WHOSE PRIMARY BUSINESS
IS TO RECEIVE PRESCRIPTIONS BY MAIL, TELEFAX OR THROUGH ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION TO PATIENTS THROUGH THE USE OF
THE UNITED STATES MAIL OR OTHER COMMON OR CONTRACT CARRIER SERVICES AND
PROVIDE ANY CONSULTATION WITH PATIENTS ELECTRONICALLY RATHER THAN FACE-
TO-FACE.
2. "RETAIL PHARMACY" SHALL MEAN A PHARMACY WHOSE PRIMARY BUSINESS IS
TO RECEIVE PRESCRIPTIONS DIRECTLY FROM PATIENTS OR THROUGH ELECTRONIC
SUBMISSIONS AND TO DISPENSE MEDICATION DIRECTLY TO PATIENTS AND PROVIDE
FACE-TO-FACE CONSULTATION WITH PATIENTS. FOR PURPOSES OF THIS SUBDIVI-
SION, THE TERM "PATIENT" SHALL INCLUDE A PERSON WHO IS ACTING ON BEHALF
OF A PATIENT.
3. "PRESCRIPTION BENEFIT PLAN" SHALL MEAN ANY BENEFIT PLAN OTHER THAN
A STATE PUBLIC HEALTH PLAN, AS DEFINED IN SUBDIVISION ELEVEN OF SECTION
TWO HUNDRED SEVENTY OF THE PUBLIC HEALTH LAW, OR AN EMPLOYEE WELFARE
BENEFIT PLAN, AS DEFINED IN SUBSECTION ONE OF SECTION ONE THOUSAND TWO
OF THE UNITED STATES CODE, THAT PROVIDES PRESCRIPTION BENEFITS, A
GOVERNMENTAL PLAN, AS DEFINED IN SUBSECTION THIRTY-TWO OF SECTION ONE
THOUSAND TWO OF THE UNITED STATES CODE, A CHURCH PLAN, AS DEFINED IN
SUBSECTION THIRTY-THREE OF SECTION ONE THOUSAND TWO OF THE UNITED STATES
CODE, OR A PLAN IS MAINTAINED SOLELY FOR THE PURPOSE OF COMPLYING WITH
APPLICABLE WORKERS' COMPENSATION LAWS OR UNEMPLOYMENT COMPENSATION OR
DISABILITY INSURANCE LAWS, THAT INCLUDES PRESCRIPTION DRUG BENEFITS TO
ENROLLEES AND THEIR DEPENDENTS.
4. "SPECIALTY PRESCRIPTION DRUG" SHALL MEAN A PRESCRIPTION DRUG THAT
IS USED TO TREAT A CHRONIC, COMPLEX OR RARE CONDITION, HAS BEEN DESIG-
NATED IN THE PRESCRIPTION BENEFIT PLAN'S FORMULARY AS A SPECIALTY
PRESCRIPTION DRUG, AND WILL ONLY BE COVERED BY THE PRESCRIPTION BENEFIT
PLAN IF IT IS DISPENSED BY A NETWORK MAIL ORDER PHARMACY OR AN AUTHOR-
IZED NETWORK RETAIL PHARMACY.
A. 2973 4
5. "NETWORK" SHALL MEAN A MAIL ORDER PHARMACY OR RETAIL PHARMACY THAT
PARTICIPATES IN A PRESCRIPTION BENEFIT PLAN.
6. "MAIL ORDER PRESCRIPTION" SHALL MEAN ANY PRESCRIPTION DRUG, INCLUD-
ING, BUT NOT LIMITED TO SPECIALTY PRESCRIPTION DRUGS, THAT A
PRESCRIPTION BENEFIT PLAN REQUIRES BE FILLED BY A MAIL ORDER PHARMACY OR
AN AUTHORIZED NETWORK RETAIL PHARMACY IN ORDER FOR SUCH DISPENSED
PRESCRIPTION TO BE COVERED BY SUCH PLAN.
7. "PRESCRIPTION BENEFIT PLAN ENROLLEE" OR "ENROLLEE" SHALL MEAN THE
PERSON WHO IS ENROLLED IN THE PRESCRIPTION BENEFIT PLAN AND HIS OR HER
SPOUSE AND DEPENDENT CHILDREN WHO ARE ENROLLED IN THE PRESCRIPTION BENE-
FIT PLAN AS DEPENDENTS OF SUCH PERSON.
8. "AUTHORIZED NETWORK RETAIL PHARMACY" SHALL MEAN A RETAIL PHARMACY
THAT, WHEN USED BY A MEMBER TO FILL A MAIL ORDER PRESCRIPTION, SUCH
PRESCRIPTION WILL BE COVERED BY THE MEMBER'S PRESCRIPTION BENEFIT PLAN
AS IF SUCH PHARMACY WAS A MAIL ORDER PHARMACY.
§ 902. PROHIBITED CONDUCT. 1. NOTWITHSTANDING ANY PROVISION OF LAW TO
THE CONTRARY, IT SHALL BE UNLAWFUL FOR A PRESCRIPTION BENEFIT PLAN TO
REQUIRE AN ENROLLEE OR AN ENROLLEE'S DEPENDENT TO OBTAIN ANY
PRESCRIPTION DRUG FROM A NETWORK MAIL ORDER PHARMACY IN ORDER TO RECEIVE
COVERAGE FROM SUCH PLAN FOR SUCH PRESCRIPTION.
2. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, IT SHALL BE
UNLAWFUL FOR A PRESCRIPTION BENEFIT PLAN TO REQUIRE THAT AN ENROLLEE OR
AN ENROLLEE'S DEPENDENT REMIT A HIGHER CO-PAYMENT FOR A PRESCRIPTION
WHEN SUCH PRESCRIPTION IS DISPENSED BY A NETWORK RETAIL PHARMACY.
3. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, IT SHALL BE
UNLAWFUL FOR A PRESCRIPTION BENEFIT PLAN TO REQUIRE A NETWORK RETAIL
PHARMACY TO AGREE TO ADDITIONAL CONTRACTUAL TERMS AND CONDITIONS THAT GO
BEYOND THE INDUSTRY STANDARD AND ARE NOT REASONABLE AND RELEVANT AS A
CONDITION PRECEDENT TO ALLOWING SUCH A RETAIL PHARMACY TO DISPENSE ANY
PRESCRIPTION DRUG, INCLUDING MAIL ORDER PRESCRIPTION DRUGS, AS A NETWORK
PROVIDER.
4. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, IT SHALL BE
UNLAWFUL FOR A MAIL ORDER PHARMACY TO AUTOMATICALLY REFILL A
PRESCRIPTION BENEFIT PLAN ENROLLEE'S PRESCRIPTION WITHOUT OBTAINING
PERMISSION FOR SUCH AUTOMATIC REFILLS FROM SUCH ENROLLEE, OR IN THE CASE
OF AN ENROLLEE'S DEPENDENT CHILD, THE ENROLLEE OR CHILD'S PARENT;
PROVIDED, HOWEVER, ANY PERMISSION GRANTED FOR AUTOMATIC REFILLS SHALL
EXPIRE AFTER SIX MONTHS AND MAY BE RENEWED THEREAFTER FOR INTERVALS NOT
TO EXCEED SIX MONTHS.
5. NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, IT SHALL BE
UNLAWFUL FOR ANY MAIL ORDER PHARMACY TO RETAIN AN ENROLLEE'S PAYMENT
INFORMATION FOR FUTURE USE WITHOUT THE CONSENT OF THE ENROLLEE. FOR
PURPOSES OF THIS SUBDIVISION, PAYMENT INFORMATION INCLUDES, BUT IS NOT
LIMITED TO, CREDIT CARD INFORMATION, DEBIT CARD INFORMATION, AND BANK
ACCOUNT INFORMATION.
§ 903. ACTION TO RECOVER DAMAGES BY AN ENROLLEE. 1. ANY PERSON INJURED
BY A VIOLATION OF THIS ARTICLE MAY BRING AN ACTION FOR THE RECOVERY OF
DAMAGES. JUDGMENT MAY BE ENTERED IN FAVOR OF SUCH PERSON IN AN AMOUNT
NOT TO EXCEED THREE TIMES THE ACTUAL DAMAGES OR ONE HUNDRED DOLLARS,
WHICHEVER IS GREATER. THE COURT MAY AWARD REASONABLE ATTORNEY'S FEES TO
A PREVAILING PLAINTIFF.
2. NOTHING IN THIS ARTICLE SHALL BE CONSTRUED SO AS TO NULLIFY OR
IMPAIR ANY RIGHT OR RIGHTS WHICH A PRESCRIPTION BENEFIT PLAN ENROLLEE OR
SUCH ENROLLEE'S DEPENDENT MAY HAVE AGAINST A SELLER AT COMMON LAW, BY
STATUTE, OR OTHERWISE.
A. 2973 5
§ 904. VIOLATIONS. ANY MAIL ORDER PHARMACY OR PRESCRIPTION BENEFIT
PLAN, INCLUDING ITS EMPLOYEES AND AGENTS, THAT VIOLATES ANY PROVISION OF
THIS ARTICLE, SHALL BE LIABLE FOR A CIVIL FINE OF NOT MORE THAN TWENTY-
FIVE HUNDRED DOLLARS FOR EACH VIOLATION.
§ 905. ENFORCEMENT BY ATTORNEY GENERAL. IN ADDITION TO THE OTHER REME-
DIES PROVIDED, WHENEVER THERE SHALL BE A VIOLATION OF THIS ARTICLE,
APPLICATION MAY BE MADE BY THE ATTORNEY GENERAL IN THE NAME OF THE
PEOPLE OF THE STATE TO A COURT HAVING JURISDICTION TO ISSUE AN INJUNC-
TION, AND UPON NOTICE TO THE RESPONDENT OF NOT FEWER THAN FIVE DAYS, TO
ENJOIN AND RESTRAIN THE CONTINUANCE OF THE VIOLATION. IF IT SHALL APPEAR
TO THE SATISFACTION OF THE COURT OR JUSTICE THAT THE DEFENDANT HAS, IN
FACT, VIOLATED THIS ARTICLE, AN INJUNCTION MAY BE ISSUED BY SUCH COURT
OR JUSTICE, ENJOINING AND RESTRAINING ANY FURTHER VIOLATION, WITHOUT
REQUIRING PROOF THAT ANY PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED
THEREBY. IN ANY SUCH PROCEEDING, THE COURT MAY MAKE ALLOWANCES TO THE
ATTORNEY GENERAL AS PROVIDED IN PARAGRAPH SIX OF SUBDIVISION (A) OF
SECTION EIGHTY-THREE HUNDRED THREE OF THE CIVIL PRACTICE LAW AND RULES,
AND DIRECT RESTITUTION. WHENEVER THE COURT SHALL DETERMINE THAT A
VIOLATION OF THIS ARTICLE HAS OCCURRED, THE COURT MAY IMPOSE A CIVIL
PENALTY OF NOT MORE THAN TEN THOUSAND DOLLARS FOR EACH VIOLATION.
§ 906. APPLICABILITY. THIS ARTICLE SHALL NOT APPLY TO ANY EMPLOYEE
WELFARE BENEFIT PLAN, AS DEFINED IN SUBSECTION ONE OF SECTION ONE THOU-
SAND TWO OF THE UNITED STATES CODE, THAT PROVIDES PRESCRIPTION BENEFITS,
GOVERNMENTAL PLAN, AS DEFINED IN SUBSECTION THIRTY-TWO OF SECTION ONE
THOUSAND TWO OF THE UNITED STATES CODE, CHURCH PLAN, AS DEFINED IN
SUBSECTION THIRTY-THREE OF SECTION ONE THOUSAND TWO OF THE UNITED STATES
CODE, OR A PLAN IS MAINTAINED SOLELY FOR THE PURPOSE OF COMPLYING WITH
APPLICABLE WORKERS' COMPENSATION LAWS OR UNEMPLOYMENT COMPENSATION OR
DISABILITY INSURANCE LAWS.
§ 2. This act shall take effect on the ninetieth day after it shall
have become a law and shall apply to contracts entered into, amended or
renewed on and after such date.