NY State Senate Bill 2019-S6489

Senate Bill S6489

2019-2020 Legislative Session

Requires certain insurance carriers to certify that at least a majority of prescription drug rebates are provided to patients at the point of sale

download bill text pdf

Archive: Last Bill Status - In Senate Committee Insurance 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 insurance
Jun 13, 2019	referred to rules

2019-S6489 (ACTIVE) - Details

See Assembly Version of this Bill:: A8310
Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3231 & 3221, Ins L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S2006, A5218
2023-2024: S2393, A1962

2019-S6489 (ACTIVE) - Summary

Requires individual and small group insurance carriers and group and blanket accident and health carriers to certify that at least a majority of prescription drug rebates are provided to patients at the point of sale.

2019-S6489 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S6489

SPONSOR: JACKSON
 
TITLE OF BILL:  An act to amend the insurance law, in relation to
requiring individual and small group insurance carriers and group and
blanket accident and health carriers to certify that at least a majority
of prescription drug rebates are provided to patients at the point of
sale

 
PURPOSE:

To ensure patients benefit from substantial discounts that exist within
the prescription drug supply chain.

 
SUMMARY OF PROVISIONS:

Section 1 requires individual and small group carriers to certify that
at least a majority (greater than 50%) of prescription drug rebates are
provided to patients at the point of sale.

Section 2 requires group and blanket accident and health carriers to

certify that at least a majority (greater than 50%) of prescription drug
rebates are provided to patients at the point of sale.

Section 3 is the effective date.

 
JUSTIFICATION:

The difference between list prices of prescription drugs and the net
prices paid by pharmacy benefit managers and health insurers has been
growing exponentially in recent years. While many entities benefit from
these large negotiated discounts - estimated at $166 billion in 2018 one
group gets the short end of the stick: patients.

As more and more health insurance benefit designs rely on coinsurance
and deductibles, patients end up paying cost sharing on the list price
of the drug even as their health plan is reaping significant discounts.
Unlike negotiated discounts on other services like hospital care, these
savings are not shared with patients in the deducible phase of a plan
and patients often end up paying more than their health plan for a drug.
Plans argue that the discounts are used to lower premiums for everyone,
but patients with complex and chronic conditions end up carrying the
biggest burden - exactly the opposite of how insurance should work. This
bill strikes a careful balance, allowing rebates and discounts to be
socialized and keep premiums down to a point, but also making sure some
of those significant discounts are passed along to the place they're
most important to patients - at the pharmacy counter.

Many health plans have already implemented this option and have marketed
this approach as good for patients and "worth it."

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S6489 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6489
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               June 13, 2019
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the insurance law, in relation to  requiring  individual
   and  small group insurance carriers and group and blanket accident and
   health carriers to certify that at least a  majority  of  prescription
   drug rebates are provided to patients at the point of sale
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subdivision  (e)  of  section  3231  of  the
 insurance  law  is  amended  by adding a new subparagraph (C) to read as
 follows:
   (C) AN INSURER SHALL ANNUALLY CERTIFY TO THE DEPARTMENT  THAT,  DURING
 THE  PRIOR  BENEFIT YEAR, THE INSURER MADE AVAILABLE TO ENROLLEES AT THE
 POINT OF SALE AT LEAST A MAJORITY (I.E., GREATER THAN FIFTY PERCENT)  OF
 THE  REBATES  RECEIVED  BY SUCH INSURER OR ANY THIRD PARTY ADMINISTERING
 PRESCRIPTION DRUG BENEFITS ON BEHALF OF SUCH INSURER.
   (I) FOR PURPOSES OF THIS PARAGRAPH, "REBATE" MEANS:
   (1) NEGOTIATED PRICE CONCESSIONS INCLUDING BUT  NOT  LIMITED  TO  BASE
 REBATES  AND  REASONABLE  ESTIMATES  OF ANY PRICE PROTECTION REBATES AND
 PERFORMANCE-BASED REBATES THAT MAY ACCRUE DIRECTLY OR INDIRECTLY TO  THE
 ISSUER  DURING THE COVERAGE YEAR FROM A MANUFACTURER, DISPENSING PHARMA-
 CY, OR OTHER PARTY TO THE TRANSACTION, AND
   (2) REASONABLE ESTIMATES OF ANY FEES AND  OTHER  ADMINISTRATIVE  COSTS
 THAT  ARE  PASSED THROUGH TO THE ISSUER AND SERVE TO REDUCE THE ISSUER'S
 PRESCRIPTION DRUG LIABILITIES FOR THE COVERAGE YEAR.
   (II) IN PROVIDING THE CERTIFICATION REQUIRED UNDER THIS  SUBPARAGRAPH,
 AN  ISSUER  SHALL  NOT PUBLISH OR OTHERWISE REVEAL INFORMATION REGARDING
 THE ACTUAL AMOUNT OF REBATES THE ISSUER RECEIVED ON A PRODUCT-, MANUFAC-
 TURER- OR PHARMACY-SPECIFIC BASIS. SUCH INFORMATION IS  PROTECTED  AS  A
 TRADE  SECRET,  IS NOT A PUBLIC RECORD AS DEFINED IN THE PUBLIC OFFICERS
 LAW AND SHALL NOT BE DISCLOSED DIRECTLY OR INDIRECTLY. AN INSURER  SHALL
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD13316-01-9

 S. 6489                             2
 
 IMPOSE THE CONFIDENTIALITY PROTECTIONS OF THIS SUBPARAGRAPH ON ANY THIRD
 PARTIES  OR  VENDORS  WITH  WHICH  IT CONTRACTS THAT MAY RECEIVE OR HAVE
 ACCESS TO REBATE INFORMATION.
   §  2.  Subdivision (b) of section 3221 of the insurance law is amended
 to read as follows:
   (b) (1) No such policy shall be delivered or issued  for  delivery  in
 this  state  unless  a  schedule of the premium rates pertaining to such
 form shall have been filed with the superintendent.
   (2) AN INSURER SHALL ANNUALLY CERTIFY TO THE DEPARTMENT  THAT,  DURING
 THE  PRIOR  BENEFIT YEAR, THE INSURER MADE AVAILABLE TO ENROLLEES AT THE
 POINT OF SALE AT LEAST A MAJORITY (I.E., GREATER THAN FIFTY PERCENT)  OF
 THE  REBATES  RECEIVED  BY SUCH INSURER OR ANY THIRD PARTY ADMINISTERING
 PRESCRIPTION DRUG BENEFITS ON BEHALF OF SUCH INSURER.
   (A) FOR PURPOSES OF THIS PARAGRAPH, "REBATE" MEANS:
   (I) NEGOTIATED PRICE CONCESSIONS INCLUDING BUT  NOT  LIMITED  TO  BASE
 REBATES  AND  REASONABLE  ESTIMATES  OF ANY PRICE PROTECTION REBATES AND
 PERFORMANCE-BASED REBATES THAT MAY ACCRUE DIRECTLY OR INDIRECTLY TO  THE
 ISSUER  DURING THE COVERAGE YEAR FROM A MANUFACTURER, DISPENSING PHARMA-
 CY, OR OTHER PARTY TO THE TRANSACTION, AND
   (II) REASONABLE ESTIMATES OF ANY FEES AND OTHER  ADMINISTRATIVE  COSTS
 THAT  ARE  PASSED THROUGH TO THE ISSUER AND SERVE TO REDUCE THE ISSUER'S
 PRESCRIPTION DRUG LIABILITIES FOR THE COVERAGE YEAR.
   (B) IN PROVIDING THE CERTIFICATION REQUIRED UNDER THIS SUBDIVISION, AN
 ISSUER SHALL NOT PUBLISH OR OTHERWISE REVEAL INFORMATION  REGARDING  THE
 ACTUAL  AMOUNT OF REBATES THE ISSUER RECEIVED ON A PRODUCT-, MANUFACTUR-
 ER- OR PHARMACY-SPECIFIC BASIS. SUCH INFORMATION IS PROTECTED AS A TRADE
 SECRET, IS NOT A PUBLIC RECORD AS DEFINED IN THE PUBLIC OFFICERS LAW AND
 SHALL NOT BE DISCLOSED DIRECTLY OR INDIRECTLY. AN INSURER  SHALL  IMPOSE
 THE CONFIDENTIALITY PROTECTIONS OF THIS SUBDIVISION ON ANY THIRD PARTIES
 OR  VENDORS  WITH  WHICH IT CONTRACTS THAT MAY RECEIVE OR HAVE ACCESS TO
 REBATE INFORMATION.
   § 3. This act shall take effect immediately.

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