BILL NUMBER: S7768

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the insurance law, in relation to prescription drug
formulary coverage for interchangeable biologics and biosimilars

 
PURPOSE:

To reduce prescription drug costs in New York by allowing biosimilar
medicines to be substituted for the original biologics.

 
SUMMARY OF PROVISIONS:

Section one amends section 4903 of the Insurance law to add both inter-
changeable biologics and biosimilars to New York's step therapy proto-
col, allowing utilization review agents to require an insured to try an
interchangeable biologic or biosimilar medication before covering the
name brand drug.

Section two amends section 3242 of the Insurance law to allow insurance
              

companies to move a reference drug to a tier with a larger deductible,
copayment, or coinsurance if a biosimilar version of that drug exists
and is added to the formulary at the same time.

Section three amends section 4329 of the Insurance law to allow non-pro-
fit insurance companies to move a reference drug to a tier with a larger
deductible, copayment, or coinsurance if a biosimilar version of that
drug exists and is added to the formulary at the same time.

 
JUSTIFICATION:

Biological medications or 'biologics' are on the cutting edge of medical
technology and are used to treat complicated conditions and diseases
including cancer, rheumatoid arthritis, diabetes and multiple sclerosis.
These drugs are often life-changing and life-saving, but they are also
delicate and complicated to produce.  Biologics are made using living
organisms that produce the proteins required to make the medication.This
makes these medications incredibly cost prohibitive for companies to
develop and test,resulting in high costs to patients and insurance
companies.

However, alternative versions of biologics called 'biosimilars' have
been developed.Biosimilars are an FDA-approved drug that is similar to
an existing biologic medication (or reference drug) and produces the
same outcome. Biosimilars are produced by manufacturers who did not
develop the original biologic. Because these manufacturers did not have
to finance the extensive costs associated with biologic development,
they can sell the medication at a lower cost. In addition, biosimilars
undergo an abbreviated FDA approval process because the reference
biologic has demonstrated the medication's effectiveness. This shorter
proceeding further reduces development costs for biosimilar manufactur-
ers and contributes to lower biosimilar prices.

This bill would amend New York State's insurance law to allow insurance
providers to require their insureds to try a biosimilar medication
instead of the reference drug and place a biosimilar in a less expensive
tier of prescription medication. This would generate cost savings for
both the patient and the insurance company, making access to medication
more affordable.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately.