NY State Senate Bill 2025-S1351

Current 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 09, 2025	referred to insurance

co-Sponsors

2025-S1351 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §111-b, Ins L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S8901
2023-2024: S398

2025-S1351 (ACTIVE) - Summary

Relates to reducing the cost of prescription drugs by establishing maximum wholesale drug prices that are the same as the prices in Canada.

2025-S1351 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S1351

SPONSOR: CLEARE
 
TITLE OF BILL:

An act to amend the insurance law, in relation to requiring a referenced
rate for prescription drugs

 
PURPOSE OR GENERAL IDEA OF BILL:

To create a state pilot program that caps the price of the five most
expensive prescription drugs by referencing Canadian prices. This would
allow the state to assess the utility of international reference pricing
as a tool to cap prescription drug prices.

 
SUMMARY OF SPECIFIC PROVISIONS:

The Director of the Employee Benefits Division within the Department of
Civil Service, which currently manages employee health plan costs, will
identify the five most costly prescription drugs to reference based on
the formula of net price multiplied by utilization.

Beginning no later than one year after being signed into law, the Direc-
tor will send the Department of Financial Services (DFS) Superintendent
the list of the five drugs to reference and the prior year's total net
spend on each of them.

No later than one year and five months after the bill is signed into
law, the Superintendent will publish the list of the five referenced
drugs on the DFS's website. The Superintendent will determine the refer-
enced rate by comparing the drug's list price set by the manufacturer-
known as the wholesale acquisition cost (WAC)-to the following sources,
which list the prices in the largest Canadian provinces; all of listed
provinces utilize transparent price setting processes:

*Ontario Ministry of Health and Long Term Care and most recently
published on the Ontario Drug Benefit Formulary;

*Regie de ('Assurance Maladie du Quebec and most recently published on
the Quebec Public Drug Programs List of Medications;

*British Columbia Ministry of Health and most recently published on the
BC Pharmacare Formulary; and

*Alberta Ministry of Health and most recently published on the Alberta
Drug Benefit List.

The referenced rate, at which a state entity or health plan will
purchase the referenced drugs, will be calculated as the lowest among
the WAC and the prices listed in the referenced resources. In the case a
specific drug is not included in those resources, the Superintendent
will use the ceiling price reported by the Government of Canada Patented
Medicine Prices Review Board.

The Superintendent will calculate the expected savings, and generally
consult with the Director of the State Employee Health Insurance Plan
and the Chair of the State Board of Pharmacy.


During this pilot study, it will be a violation for a state entity or
health plan to purchase, or for a pharmacy to purchase or distribute,
the referenced drugs subject to this pilot program at a cost higher than
the referenced rate.

Any savings generated must be used to reduce costs to consumers.

No later than sixty days after the conclusion of the pilot program, the
state entity and/or health plans subject to this pilot program will
submit to the DFS Superintendent a report describing the savings and how
those savings were used to benefit consumers.  No later than one hundred
eighty days following the conclusion of the plan year, the DFS Super-
intendent will issue a report on the savings, if any, of the program,
along with recommendations on the feasibility of expanding this program
to other prescription drugs, improvements to the program, and anything
else the Superintendent deems necessary to understand its broader
effects.

Manufacturers will not be able to withdraw a referenced drug from sale
or distribution to avoid the program. If they wish to withdraw a refer-
enced drug, they will need to provide notice to DFS and the AG 180 days
prior to the withdrawal. The DFS Superintendent will assess a penalty on
an entity that it determines has withdrawn a referenced drug in
violation of the program. It will also be a violation for a manufacturer
to refuse to negotiate in good faith with any payor or seller of the
referenced drugs at a price that is within the referenced rate. The
penalty for both will be $500,000 or the amount of annual savings deter-
mined by the DFS Superintendent, whichever is greater.

 
JUSTIFICATION:

Americans pay 3 times more for brand drugs than people in similar coun-
tries do. For example, the price of Xeljanz, a drug for rheumatoid
arthritis, is 450% higher in the United States than in Canada. An effec-
tive tool to address the cost of living crisis, especially for seniors,
is to utilize international reference pricing in capping the price of a
medication by comparing it to the price in a group of other reference
countries. This bill creates a pilot program to cap prescription drug
prices based on the prices that Canadians pay.

 
PRIOR LEGISLATIVE HISTORY:

A9086 of 2024: Referred to Insurance

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law.

2025-S1351 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1351
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              January 9, 2025
                                ___________
 
 Introduced by Sens. CLEARE, ADDABBO, BRISPORT, SALAZAR -- read twice and
   ordered  printed, and when printed to be committed to the Committee on
   Insurance
 
 AN ACT to amend the insurance law, in relation to requiring a referenced
   rate for prescription drugs
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. The insurance law is amended by adding a new section 111-b
 to read as follows:
   § 111-B. PILOT PROGRAM ON REFERENCED RATE FOR PRESCRIPTION DRUGS.  (A)
 PROGRAM CREATION.  A PILOT PROGRAM IS HEREBY CREATED TO STUDY THE POSSI-
 BILITY   OF   CONTROLLING   EXCESSIVE   AND  UNCONSCIONABLE  PRICES  FOR
 PRESCRIPTION DRUGS.
   (B) DEFINITIONS. AS USED IN THIS SECTION, THE  FOLLOWING  TERMS  SHALL
 HAVE THE FOLLOWING MEANINGS:
   (1)  "PRESCRIPTION DRUG" SHALL HAVE THE SAME MEANING AS IN SUBDIVISION
 SEVEN OF SECTION SIXTY-EIGHT HUNDRED TWO OF THE EDUCATION LAW, FOR WHICH
 A PRESCRIPTION IS REQUIRED UNDER THE FEDERAL  FOOD,  DRUG  AND  COSMETIC
 ACT.  ANY  DRUG THAT DOES NOT REQUIRE A PRESCRIPTION UNDER SUCH ACT, BUT
 WHICH WOULD OTHERWISE MEET THE  CRITERIA  UNDER  ARTICLE  TWO-A  OF  THE
 PUBLIC  HEALTH LAW FOR INCLUSION ON THE PREFERRED DRUG LIST MAY BE ADDED
 TO THE PREFERRED DRUG LIST UNDER ARTICLE TWO-A OF THE PUBLIC HEALTH LAW;
 AND, IF SO INCLUDED, SHALL BE CONSIDERED TO BE A PRESCRIPTION  DRUG  FOR
 PURPOSES  OF  THIS  SECTION;  PROVIDED  THAT  IT  SHALL  BE ELIGIBLE FOR
 REIMBURSEMENT UNDER A STATE PUBLIC HEALTH PLAN WHEN ORDERED BY  A  PRES-
 CRIBER  AUTHORIZED  TO  PRESCRIBE UNDER THE STATE PUBLIC HEALTH PLAN AND
 THE PRESCRIPTION IS SUBJECT TO THE APPLICABLE PROVISIONS OF THIS SECTION
 AND PARAGRAPH (A) OF SUBDIVISION FOUR OF SECTION  THREE  HUNDRED  SIXTY-
 FIVE-A OF THE SOCIAL SERVICES LAW.
   (2)  "WHOLESALE  ACQUISITION  COST"  SHALL  HAVE  THE  SAME MEANING AS
 DEFINED IN 42 U.S.C. § 1395W-3A.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00232-02-5

 S. 1351                             2
 
   (3) "STATE ENTITY" MEANS ANY  AGENCY  OF  THE  STATE  GOVERNMENT  THAT
 PURCHASES  PRESCRIPTION  DRUGS ON BEHALF OF THE STATE FOR A PERSON WHOSE
 HEALTH CARE IS PAID FOR BY  THE  STATE,  INCLUDING  ANY  AGENT,  VENDOR,
 FISCAL  AGENT, CONTRACTOR, OR OTHER PARTY ACTING ON BEHALF OF THE STATE.
 "STATE  ENTITY"  SHALL NOT INCLUDE THE MEDICAL ASSISTANCE PROGRAM ESTAB-
 LISHED PURSUANT TO 42 U.S.C. § 1396 ET SEQ.
   (4) "HEALTH PLAN" SHALL HAVE THE SAME MEANING AS DEFINED IN  PARAGRAPH
 (A)  OF  SUBDIVISION  ONE  OF SECTION TWO HUNDRED EIGHTY-A OF THE PUBLIC
 HEALTH LAW.
   (5) "REFERENCED RATE" MEANS THE MAXIMUM RATE ESTABLISHED BY THE SUPER-
 INTENDENT UTILIZING THE WHOLESALE ACQUISITION  COST  AND  OTHER  PRICING
 DATA DESCRIBED IN SUBSECTION (E) OF THIS SECTION.
   (6) "REFERENCED DRUGS" MEANS ANY PRESCRIPTION DRUG SUBJECT TO A REFER-
 ENCED RATE.
   (C) PAYMENT IN EXCESS OF REFERENCED RATE PROHIBITED. (1) IT SHALL BE A
 VIOLATION  OF THIS SECTION FOR A STATE ENTITY OR HEALTH PLAN TO PURCHASE
 THE REFERENCED DRUGS SUBJECT TO THIS PILOT PROGRAM AND  WHICH  SHALL  BE
 DISPENSED  OR  DELIVERED TO A CONSUMER IN THE STATE, WHETHER DIRECTLY OR
 THROUGH A DISTRIBUTOR, FOR A COST HIGHER THAN  THE  REFERENCED  RATE  AS
 DETERMINED PURSUANT TO PARAGRAPH TWO OF SUBSECTION (E) OF THIS SECTION.
   (2)  IT SHALL BE A VIOLATION OF THIS SECTION FOR ANY PHARMACY LICENSED
 IN THIS STATE TO PURCHASE FOR SALE OR DISTRIBUTION REFERENCED DRUGS  FOR
 A COST THAT EXCEEDS THE REFERENCED RATE TO A PERSON WHOSE HEALTH CARE IS
 PROVIDED BY A STATE ENTITY OR HEALTH PLAN.
   (D)  COSTLY  PRESCRIPTION  DRUGS.  AS  PART OF THIS PILOT PROGRAM, THE
 DIRECTOR OF THE EMPLOYEE BENEFITS  DIVISION  WITHIN  THE  DEPARTMENT  OF
 CIVIL  SERVICE  SHALL  IDENTIFY  THE FIVE MOST COSTLY PRESCRIPTION DRUGS
 BASED UPON NET PRICE TIMES UTILIZATION.
   (E) REFERENCED DRUGS DETERMINED. (1) BEGINNING NO LATER THAN ONE  YEAR
 AFTER  THE  EFFECTIVE DATE OF THIS SECTION, THE DIRECTOR OF THE EMPLOYEE
 BENEFITS DIVISION WITHIN THE DEPARTMENT OF CIVIL SERVICE SHALL  TRANSMIT
 TO  THE  SUPERINTENDENT  THE  LIST  OF  PRESCRIPTION DRUGS REFERENCED IN
 SUBSECTION (D) OF THIS SECTION. FOR EACH OF  THESE  PRESCRIPTION  DRUGS,
 SUCH  DIRECTOR  SHALL  ALSO PROVIDE THE TOTAL NET SPEND ON EACH OF THOSE
 PRESCRIPTION DRUGS FOR THE PREVIOUS CALENDAR YEAR.
   (2) UTILIZING THE INFORMATION  DESCRIBED  IN  PARAGRAPH  ONE  OF  THIS
 SUBSECTION,  NO  LATER THAN ONE YEAR AND FIVE MONTHS AFTER THE EFFECTIVE
 DATE OF THIS SECTION, THE SUPERINTENDENT SHALL CREATE AND PUBLISH A LIST
 ON THE DEPARTMENT'S WEBSITE OF SUCH DRUGS THAT SHALL BE SUBJECT  TO  THE
 REFERENCED RATE.
   (3)  THE SUPERINTENDENT SHALL DETERMINE THE REFERENCED RATE BY COMPAR-
 ING THE WHOLESALE ACQUISITION COST TO THE COST FROM ALL OF THE FOLLOWING
 SOURCES:
   (A) ONTARIO MINISTRY OF HEALTH AND LONG TERM CARE  AND  MOST  RECENTLY
 PUBLISHED ON THE ONTARIO DRUG BENEFIT FORMULARY;
   (B) REGIE DE L'ASSURANCE MALADIE DU QUEBEC AND MOST RECENTLY PUBLISHED
 ON THE QUEBEC PUBLIC DRUG PROGRAMS LIST OF MEDICATIONS;
   (C) BRITISH COLUMBIA MINISTRY OF HEALTH AND MOST RECENTLY PUBLISHED ON
 THE BC PHARMACARE FORMULARY; AND
   (D)  ALBERTA  MINISTRY  OF  HEALTH  AND MOST RECENTLY PUBLISHED ON THE
 ALBERTA DRUG BENEFIT LIST.
   (4) THE REFERENCED RATE FOR EACH PRESCRIPTION DRUG SHALL BE CALCULATED
 AS THE LOWEST COST AMONG THOSE RESOURCES AND THE  WHOLESALE  ACQUISITION
 COST. IF A SPECIFIC REFERENCED DRUG IS NOT INCLUDED WITHIN THE RESOURCES
 DESCRIBED  IN  PARAGRAPH THREE OF THIS SUBSECTION, THEN, FOR THE PURPOSE
 OF DETERMINING THE REFERENCED RATE FOR  THAT  DRUG,  THE  SUPERINTENDENT
 S. 1351                             3
 
 SHALL  UTILIZE THE CEILING PRICE FOR DRUGS AS REPORTED BY THE GOVERNMENT
 OF CANADA PATENTED MEDICINE PRICES REVIEW BOARD.
   (5)  THE  SUPERINTENDENT SHALL CALCULATE THE SAVINGS THAT ARE EXPECTED
 TO BE ACHIEVED BY SUBJECTING PRESCRIPTION DRUGS TO THE  REFERENCED  RATE
 FOR ONE PLAN YEAR. IN MAKING THIS DETERMINATION THE SUPERINTENDENT SHALL
 CONSULT  WITH  THE DIRECTOR OF THE EMPLOYEE BENEFITS DIVISION WITHIN THE
 DEPARTMENT OF CIVIL SERVICE AND THE DRUG ACCOUNTABILITY BOARD.
   (6) THE SUPERINTENDENT SHALL PROMULGATE SUCH RULES AND REGULATIONS  AS
 MAY BE NECESSARY TO CARRY OUT THIS PILOT PROGRAM.
   (F)  APPLICATION  OF SAVINGS. (1) ANY SAVINGS GENERATED BECAUSE OF THE
 REQUIREMENTS PURSUANT TO SUBSECTION (C) OF THIS SECTION SHALL BE USED TO
 REDUCE COSTS TO CONSUMERS. ANY STATE ENTITY OR HEALTH PLAN SHALL  CALCU-
 LATE  SUCH SAVINGS AND UTILIZE SUCH SAVINGS DIRECTLY TO REDUCE COSTS FOR
 ITS MEMBERS OR INSUREDS.
   (2) NO LATER THAN  SIXTY  DAYS  AFTER  THE  CONCLUSION  OF  THE  PILOT
 PROGRAM,  EACH STATE ENTITY OR HEALTH PLAN SUBJECT TO THIS SECTION SHALL
 SUBMIT TO THE SUPERINTENDENT A REPORT DESCRIBING  THE  SAVINGS  ACHIEVED
 FOR  EACH REFERENCED DRUG AND HOW THOSE SAVINGS WERE USED TO ACHIEVE THE
 REQUIREMENTS OF PARAGRAPH ONE OF THIS SUBSECTION.    THE  SUPERINTENDENT
 SHALL  SUBMIT  A  REPORT  OF  THE  SAVINGS, IF ANY, OF THE PILOT PROGRAM
 CONDUCTED PURSUANT TO THIS SECTION, TO THE GOVERNOR, THE TEMPORARY PRES-
 IDENT OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, AND THE MINORITY LEAD-
 ERS OF THE SENATE AND ASSEMBLY NO LATER THAN  ONE  HUNDRED  EIGHTY  DAYS
 FOLLOWING  THE  CONCLUSION OF THE PLAN YEAR SUBJECT TO THIS SECTION. THE
 REPORT SHALL ALSO INCLUDE RECOMMENDATIONS ON THE FEASIBILITY OF  EXPAND-
 ING  THIS  PROGRAM  TO  OTHER  PRESCRIPTION  DRUGS,  RECOMMENDATIONS  ON
 IMPROVEMENTS TO THE PROGRAM, AND ANY OTHER FINDINGS, RECOMMENDATIONS, OR
 CONCLUSIONS THE SUPERINTENDENT DEEMS NECESSARY TO UNDERSTAND THE BROADER
 EFFECTS OF THIS PILOT PROGRAM.
   (G) WITHDRAWAL OF REFERENCED DRUGS FOR SALE; PROHIBITED. (1) IT  SHALL
 BE  A VIOLATION OF THIS SECTION FOR ANY MANUFACTURER OR DISTRIBUTOR OF A
 REFERENCED DRUG TO WITHDRAW THAT DRUG FROM SALE OR  DISTRIBUTION  WITHIN
 THIS STATE FOR THE PURPOSE OF AVOIDING THE IMPACT OF THIS PILOT PROGRAM.
   (2)  ANY  MANUFACTURER THAT INTENDS TO WITHDRAW A REFERENCED DRUG FROM
 SALE OR DISTRIBUTION FROM WITHIN THE STATE SHALL  PROVIDE  A  NOTICE  OF
 WITHDRAWAL  IN WRITING TO THE SUPERINTENDENT AND TO THE ATTORNEY GENERAL
 NOT LESS THAN ONE HUNDRED EIGHTY DAYS PRIOR TO SUCH WITHDRAWAL.
   (3) THE SUPERINTENDENT SHALL ASSESS A PENALTY ON ANY  MANUFACTURER  OR
 DISTRIBUTOR THAT THEY DETERMINE TO HAVE WITHDRAWN A REFERENCED DRUG FROM
 DISTRIBUTION  OR  SALE IN THE STATE IN VIOLATION OF PARAGRAPH ONE OR TWO
 OF THIS SUBSECTION. WITH RESPECT TO EACH REFERENCED DRUG FOR  WHICH  THE
 SUPERINTENDENT  HAS DETERMINED THE MANUFACTURER OR DISTRIBUTOR HAS WITH-
 DRAWN FROM THE MARKET, THE PENALTY SHALL BE EQUAL TO:
   (A) FIVE HUNDRED THOUSAND DOLLARS; OR
   (B) THE AMOUNT OF ANNUAL SAVINGS DETERMINED BY THE  SUPERINTENDENT  AS
 DESCRIBED IN PARAGRAPH FIVE OF THIS SUBSECTION, WHICHEVER IS GREATER.
   (4)  IT  SHALL  BE A VIOLATION OF THIS SECTION FOR ANY MANUFACTURER OR
 DISTRIBUTOR OF A REFERENCED DRUG TO REFUSE TO NEGOTIATE  IN  GOOD  FAITH
 WITH  ANY  PAYOR  OR SELLER OF PRESCRIPTION DRUGS A PRICE THAT IS WITHIN
 THE REFERENCED RATE AS DETERMINED IN PARAGRAPH TWO OF SUBSECTION (E)  OF
 THIS SECTION.
   (5)  THE  SUPERINTENDENT SHALL ASSESS A PENALTY ON ANY MANUFACTURER OR
 DISTRIBUTOR THAT IT DETERMINES HAS FAILED TO NEGOTIATE IN GOOD FAITH  IN
 VIOLATION  OF  PARAGRAPH  FOUR  OF THIS SUBSECTION. WITH RESPECT TO EACH
 REFERENCED DRUG FOR WHICH THE SUPERINTENDENT HAS DETERMINED THE MANUFAC-
 S. 1351                             4

 TURER OR DISTRIBUTOR HAS FAILED TO NEGOTIATE IN GOOD FAITH, THE  PENALTY
 SHALL BE EQUAL TO:
   (A) FIVE HUNDRED THOUSAND DOLLARS; OR
   (B)  THE  AMOUNT OF ANNUAL SAVINGS DETERMINED BY THE SUPERINTENDENT AS
 DESCRIBED IN THIS SUBSECTION, WHICHEVER IS GREATER.
   § 2. This act shall take effect on the thirtieth day  after  it  shall
 have become a law. Effective immediately, the addition, amendment and/or
 repeal  of  any  rule  or regulation necessary for the implementation of
 this act on its effective date are authorized to be made  and  completed
 on or before such effective date.

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Senate Bill S1351

Sponsored By

Current Bill Status - In Senate Committee Insurance Committee

co-Sponsors

2025-S1351 (ACTIVE) - Details

2025-S1351 (ACTIVE) - Summary

2025-S1351 (ACTIVE) - Sponsor Memo

2025-S1351 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1351

Share this bill

Sponsored By

Cordell Cleare

Current Bill Status - In Senate Committee Insurance Committee

co-Sponsors

Joseph P. Addabbo Jr.

Jabari Brisport

Julia Salazar

2025-S1351 (ACTIVE) - Details

2025-S1351 (ACTIVE) - Summary

2025-S1351 (ACTIVE) - Sponsor Memo

2025-S1351 (ACTIVE) - Bill Text download pdf

Comments