NY State Senate Bill 2019-S5942

Senate Bill S5942

2019-2020 Legislative Session

Requires certain manufacturers of prescription drugs to notify the drug utilization review board of the proposed increase of the wholesale acquisition cost of such prescription drugs

download bill text pdf

Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to health
May 16, 2019	referred to health

2019-S5942 (ACTIVE) - Details

See Assembly Version of this Bill:: A8253
Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Add §277-a, Pub Health L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S7499, A663
2023-2024: S599, A1707

2019-S5942 (ACTIVE) - Summary

Requires certain manufacturers of prescription drugs to notify the drug utilization review board of the proposed increase of the wholesale acquisition cost of such prescription drugs.

2019-S5942 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S5942

SPONSOR: SALAZAR
 
TITLE OF BILL:  An act to amend the public health law, in relation to
requiring certain manufacturers of prescription drugs to notify the drug
utilization review board of the proposed increase of the wholesale
acquisition cost of such prescription drugs

 
PURPOSE:

The purpose of this bill is to require manufacturers to provide at least
60 days notice of their intent to raise wholesale prescription drug
costs to the drug utilization review board if the increase is 10% or
more of the total cost of the drug.

 
SUMMARY OF PROVISIONS:

Section 1 amends the public health law to add a new section 277-a relat-
ing to notification of prescription drug price increases by manufactur-
ers.

Section 2 provides the effective date.

 
JUSTIFICATION:

This legislation will provide early warning of increases in the price of
prescription drugs. Breakthrough medications offer tremendous clinical
benefits for patients, but they should not be a blank check.  The prices
charged for prescription drugs are a major threat to keeping health care
affordable for New York employers and consumers, and exorbitant
increases in prescription drug prices have been consistent across all
segments of the pharmaceutical industry. For example, in 2016 Mylan
increased the price for a package of two EpiPen Auto-Injectors from just
over $100 to more than $600 without any warning or public justification.
Since the start of 2019, more than two dozen drug makers have raised the
prices on a wide array of drugs by double-digit percentages.

The bill will not prohibit manufacturers from increasing prices, but
would require notice of price increases, enhancing transparency of
prescription drug costs. Providing notice before a price increase of
more than 10 percent takes effect is important so that consumers,
employers, providers, health plans and the state are prepared and can
take steps before the increase is implemented. It would also be impor-
tant for the policymakers to be provided with the rationale for the
increase including whether the price increases will benefit the public
to help fund research and development that improve patient care or will
it merely result in increasing the cost of health care.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S5942 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5942
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 16, 2019
                                ___________
 
 Introduced  by  Sen. SALAZAR -- 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 requiring  certain
   manufacturers  of  prescription  drugs  to notify the drug utilization
   review board of the proposed increase  of  the  wholesale  acquisition
   cost of such prescription drugs
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The public health law is amended by adding  a  new  section
 277-a to read as follows:
   § 277-A. NOTIFICATION OF PRESCRIPTION DRUG PRICE INCREASES BY MANUFAC-
 TURERS.  1. THIS SECTION SHALL APPLY TO A MANUFACTURER OF A PRESCRIPTION
 DRUG THAT IS PURCHASED OR REIMBURSED BY ANY OF THE FOLLOWING:
   (A) AN INSURANCE COMPANY AUTHORIZED IN THIS STATE  TO  WRITE  ACCIDENT
 AND  HEALTH  INSURANCE,  A  COMPANY ORGANIZED PURSUANT TO ARTICLE FORTY-
 THREE OF THE INSURANCE LAW, A MUNICIPAL COOPERATIVE HEALTH BENEFIT  PLAN
 ESTABLISHED  PURSUANT  TO  ARTICLE  FORTY-SEVEN OF THE INSURANCE LAW, AN
 ORGANIZATION CERTIFIED PURSUANT TO ARTICLE FORTY-FOUR OF  THIS  CHAPTER,
 AN  INSTITUTION  OF  HIGHER  EDUCATION CERTIFIED PURSUANT TO SECTION ONE
 THOUSAND ONE HUNDRED TWENTY-FOUR OF THE INSURANCE LAW, OR THE  NEW  YORK
 STATE  HEALTH  INSURANCE  PLAN ESTABLISHED PURSUANT TO ARTICLE ELEVEN OF
 THE CIVIL SERVICE LAW; OR
   (B) A PHARMACY BENEFIT MANAGER, INCLUDING AN ENTITY THAT  DIRECTLY  OR
 THROUGH AN INTERMEDIARY, MANAGES THE PRESCRIPTION DRUG COVERAGE PROVIDED
 BY  A  HEALTH INSURER UNDER A CONTRACT OR POLICY DELIVERED OR ISSUED FOR
 DELIVERY IN THIS STATE OR A HEALTH PLAN SUBJECT TO SECTION THREE HUNDRED
 SIXTY-FOUR-J OF THE SOCIAL SERVICES LAW, INCLUDING  THE  PROCESSING  AND
 PAYMENT OF CLAIMS FOR PRESCRIPTION DRUGS, THE PERFORMANCE OF DRUG UTILI-
 ZATION  REVIEW, THE PROCESSING OF DRUG PRIOR AUTHORIZATION REQUESTS, THE
 ADJUDICATION OF APPEALS  OR  GRIEVANCES  RELATED  TO  PRESCRIPTION  DRUG
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11426-01-9

 S. 5942                             2
 
 COVERAGE,  CONTRACTING WITH NETWORK PHARMACIES, AND CONTROLLING THE COST
 OF COVERED PRESCRIPTION DRUGS.
   2. (A) A MANUFACTURER OF A PRESCRIPTION DRUG WITH A WHOLESALE ACQUISI-
 TION COST OF MORE THAN FORTY DOLLARS FOR A COURSE OF THERAPY SHALL NOTI-
 FY  THE  DRUG  UTILIZATION REVIEW BOARD IF THE INCREASE IN THE WHOLESALE
 ACQUISITION COST OF SUCH PRESCRIPTION DRUG IS  MORE  THAN  TEN  PERCENT,
 INCLUDING  THE  PROPOSED  INCREASE  AND  THE  CUMULATIVE  INCREASES THAT
 OCCURRED WITHIN THE PREVIOUS TWO CALENDAR YEARS  PRIOR  TO  THE  CURRENT
 YEAR.  FOR PURPOSES OF THIS SECTION, A "COURSE OF THERAPY" IS DEFINED AS
 EITHER OF THE FOLLOWING:
   (I) THE RECOMMENDED DAILY DOSAGE UNITS OF A PRESCRIPTION DRUG PURSUANT
 TO ITS PRESCRIBING LABEL AS APPROVED BY THE FEDERAL FOOD AND DRUG ADMIN-
 ISTRATION FOR THIRTY DAYS; OR
   (II) THE RECOMMENDED DAILY DOSAGE UNITS OF A PRESCRIPTION DRUG  PURSU-
 ANT  TO  ITS  PRESCRIBING LABEL AS APPROVED BY THE FEDERAL FOOD AND DRUG
 ADMINISTRATION FOR A NORMAL COURSE OF TREATMENT THAT IS LESS THAN THIRTY
 DAYS.
   (B) THE NOTICE REQUIRED BY PARAGRAPH (A) OF THIS SUBDIVISION SHALL  BE
 PROVIDED  IN WRITING TO THE DRUG UTILIZATION REVIEW BOARD AT LEAST SIXTY
 DAYS PRIOR TO THE PLANNED EFFECTIVE DATE OF THE INCREASE.
   (C) (I) THE NOTICE REQUIRED BY PARAGRAPH (A) OF THIS SUBDIVISION SHALL
 INCLUDE THE DATE OF THE INCREASE, THE CURRENT WHOLESALE ACQUISITION COST
 OF THE PRESCRIPTION DRUG, AND THE DOLLAR AMOUNT OF THE  FUTURE  INCREASE
 IN THE WHOLESALE ACQUISITION COST OF THE PRESCRIPTION DRUG.
   (II)  THE  NOTICE  REQUIRED BY PARAGRAPH (A) OF THIS SUBDIVISION SHALL
 INCLUDE A STATEMENT REGARDING WHETHER A CHANGE  OR  IMPROVEMENT  IN  THE
 DRUG  NECESSITATES  THE  PRICE  INCREASE.  IF SO, THE MANUFACTURER SHALL
 DESCRIBE THE CHANGE OR IMPROVEMENT.
   (D) IN THE EVENT THAT A MANUFACTURER OF A PRESCRIPTION DRUG SUBJECT TO
 THIS SECTION DOES NOT REPORT THE INFORMATION REQUIRED IN  PARAGRAPH  (A)
 OF  THIS  SUBDIVISION,  THE  COMMISSIONER  IS AUTHORIZED TO LEVY A CIVIL
 PENALTY, AFTER NOTICE AND A HEARING, AGAINST SUCH MANUFACTURER OF UP  TO
 ONE  THOUSAND  DOLLARS  PER DAY FOR EVERY DAY AFTER THE REPORTING PERIOD
 DESCRIBED IN THIS SECTION THAT THE REQUIRED INFORMATION IS NOT REPORTED.
   § 2. This act shall take effect immediately.

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