Senate Bill S5939B

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5939
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               March 4, 2025
                                ___________
 
 Introduced  by  Sen. SKOUFIS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Health
 
 AN ACT to amend the public health law and the insurance law, in relation
   to payments by pharmacy benefit managers to participating pharmacies
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision 1 of section 280-a of the public health law is
 amended by adding two new paragraphs (j) and (k) to read as follows:
   (J) "PHARMACY ACQUISITION COST RATE" MEANS THE COST PAID BY A  PARTIC-
 IPATING  PHARMACY  TO  ACQUIRE  GENERIC,  BRAND  NAME DRUGS, OR BIOLOGIC
 PRODUCTS, OR DRUGS PRODUCED THROUGH GENETIC TECHNOLOGY OR  BIOPHARMACEU-
 TICAL PROCESSES PURSUANT TO COST INVOICES FROM THE PHARMACY.
   (K)  "NATIONAL AVERAGE DRUG ACQUISITION COST" MEANS THE MONTHLY SURVEY
 OF RETAIL PHARMACIES CONDUCTED BY THE FEDERAL CENTERS FOR  MEDICARE  AND
 MEDICAID  SERVICES (CMS) TO DETERMINE AVERAGE ACQUISITION COST FOR MEDI-
 CAID COVERED OUTPATIENT DRUGS.
   § 2. Subdivision 3 of section 280-a  of  the  public  health  law,  as
 amended  by  chapter  128  of  the  laws  of 2022, is amended to read as
 follows:
   3. Prescriptions. (A) A pharmacy benefit manager may not substitute or
 cause the substituting of one prescription drug for another in  dispens-
 ing  a  prescription,  or  alter or cause the altering of the terms of a
 prescription, except with the approval of the prescriber or as explicit-
 ly required or permitted by law, including regulations of the department
 of financial services or the department of  health.  The  superintendent
 and  commissioner,  in  coordination  with each other, are authorized to
 promulgate regulations to determine when  substitution  of  prescription
 drugs may be required or permitted.
   (B)  TO  THE  EXTENT  PERMITTED  UNDER FEDERAL LAW, A PHARMACY BENEFIT
 MANAGER SHALL PAY A PARTICIPATING PHARMACY AT MINIMUM  AT  THE  NATIONAL
 AVERAGE  DRUG  ACQUISITION COST (NADAC) RATE OR AT THE PHARMACY ACQUISI-
 TION COST RATE IF GREATER OR THERE IS NOT A NADAC RATE, PLUS  A  PROFES-
 SIONAL DISPENSING FEE THAT IS AT MINIMUM THE PROFESSIONAL DISPENSING FEE
 PAID UNDER THE STATE MEDICAL ASSISTANCE PROGRAM. FOR GENERIC, BRAND NAME
 
              

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01972-02-5
 S. 5939                             2
 
 MEDICATIONS,  BIOLOGIC PRODUCTS, OR DRUGS PRODUCED THROUGH GENETIC TECH-
 NOLOGY OR BIOPHARMACEUTICAL PROCESSES AS REQUIRED BY A  MANUFACTURER,  A
 FEDERAL  OR  STATE  REGULATORY  AGENCY, OR ACCREDITING BODY THAT REQUIRE
 UNIQUE HANDLING, DISTRIBUTION OR ADMINISTRATION, IN-DEPTH PATIENT TEACH-
 ING,  COORDINATION  OF CARE, OR FREQUENT OR SPECIAL MONITORING TO ENSURE
 SUCCESSFUL USE,  SPECIAL  PACKAGING,  SHIPPING  OR  OTHER  COSTS  TO  BE
 INCURRED BY THE PHARMACY FOR THE DISPENSING PROCESS THAT IS GREATER THAN
 THE  PROFESSIONAL  DISPENSING  FEE  PAID BY THE STATE MEDICAL ASSISTANCE
 PROGRAM, PARTICIPATING PHARMACIES SHALL BE PAID A PROFESSIONAL  DISPENS-
 ING  FEE  FOR THESE COSTS TO ENSURE A PARTICIPATING PHARMACY IS NOT PAID
 LESS THAN ITS COST TO ACQUIRE AND DISPENSE MEDICATIONS.
   § 3. The opening paragraph of subdivision 4 of section  280-a  of  the
 public  health  law,  as  added  by  chapter 828 of the laws of 2021, is
 amended to read as follows:
   A pharmacy benefit manager shall, with respect to contracts between  a
 pharmacy  benefit  manager  and a pharmacy or, alternatively, a pharmacy
 benefit manager and a pharmacy's contracting agent, such as  a  pharmacy
 services  administrative  organization,  include a reasonable process to
 appeal, investigate and resolve disputes regarding multi-source generic,
 BRAND NAME, AND BIOLOGIC PRODUCT, AND  DRUGS  PRODUCED  THROUGH  GENETIC
 TECHNOLOGY  OR  BIOPHARMACEUTICAL  PROCESSES  drug  pricing. The appeals
 process shall BE CONSIDERED WITHIN THE EXISTING APPEALS PROCESSES  UNDER
 THIS SECTION AND include the following provisions:
   §  4.  Section  2911  of  the insurance law is amended by adding a new
 subsection (d) to read as follows:
   (D) TO THE EXTENT PERMITTED UNDER  FEDERAL  LAW,  A  PHARMACY  BENEFIT
 MANAGER  SHALL  PAY  A PARTICIPATING PHARMACY AT MINIMUM AT THE NATIONAL
 AVERAGE DRUG ACQUISITION COST (NADAC) RATE, AS  DEFINED  IN  SUBDIVISION
 ONE  OF SECTION TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW, OR AT THE
 PHARMACY ACQUISITION COST RATE, AS DEFINED IN SUBDIVISION ONE OF SECTION
 TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW, IF GREATER  OR  THERE  IS
 NOT  A NADAC RATE, PLUS A PROFESSIONAL DISPENSING FEE THAT IS AT MINIMUM
 THE PROFESSIONAL DISPENSING FEE PAID UNDER THE STATE MEDICAL  ASSISTANCE
 PROGRAM.  FOR  GENERIC,  BRAND  NAME  MEDICATIONS, BIOLOGIC PRODUCTS, OR
 DRUGS PRODUCED THROUGH GENETIC TECHNOLOGY OR BIOPHARMACEUTICAL PROCESSES
 AS REQUIRED BY A MANUFACTURER, A FEDERAL OR STATE REGULATORY AGENCY,  OR
 ACCREDITING  BODY THAT REQUIRE UNIQUE HANDLING, DISTRIBUTION OR ADMINIS-
 TRATION, IN-DEPTH PATIENT TEACHING, COORDINATION OF CARE, OR FREQUENT OR
 SPECIAL MONITORING TO ENSURE SUCCESSFUL USE, SPECIAL PACKAGING, SHIPPING
 OR OTHER COSTS TO BE INCURRED BY THE PHARMACY FOR THE DISPENSING PROCESS
 THAT IS GREATER THAN THE PROFESSIONAL DISPENSING FEE PAID BY  THE  STATE
 MEDICAL  ASSISTANCE  PROGRAM,  PARTICIPATING  PHARMACIES SHALL BE PAID A
 PROFESSIONAL DISPENSING FEE FOR THESE COSTS TO  ENSURE  A  PARTICIPATING
 PHARMACY  IS NOT PAID LESS THAN ITS COST TO ACQUIRE AND DISPENSE MEDICA-
 TIONS. A PHARMACY BENEFIT  MANAGER  SHALL,  WITH  RESPECT  TO  CONTRACTS
 BETWEEN  A  PHARMACY BENEFIT MANAGER AND A PHARMACY OR, ALTERNATIVELY, A
 PHARMACY BENEFIT MANAGER AND A PHARMACY'S CONTRACTING AGENT, SUCH  AS  A
 PHARMACY  SERVICES  ADMINISTRATIVE  ORGANIZATION,  INCLUDE  A REASONABLE
 PROCESS TO APPEAL, INVESTIGATE AND  RESOLVE  DISPUTES  REGARDING  MULTI-
 SOURCE GENERIC, BRAND NAME, BIOLOGIC PRODUCT, AND DRUGS PRODUCED THROUGH
 GENETIC  TECHNOLOGY  OR  BIOPHARMACEUTICAL  PROCESSES  DRUG PRICING. THE
 APPEALS PROCESS SHALL BE CONSIDERED WITHIN THE EXISTING APPEALS  PROCESS
 UNDER SECTION TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW.
   § 5. This act shall take effect immediately.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5939--A
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               March 4, 2025
                                ___________
 
 Introduced by Sens. SKOUFIS, ADDABBO, FAHY, FERNANDEZ, GALLIVAN, GRIFFO,
   HINCHEY,  MARTINS, MAYER, RIVERA, C. RYAN, SCARCELLA-SPANTON, STAVISKY
   -- read twice and ordered printed, and when printed to be committed to
   the Committee on Health -- committee discharged, bill amended, ordered
   reprinted as amended and recommitted to said committee

 AN ACT to amend the public health law and the insurance law, in relation
   to payments by pharmacy benefit managers to participating pharmacies
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision 1 of section 280-a of the public health law is
 amended by adding two new paragraphs (j) and (k) to read as follows:
   (J) "PHARMACY ACQUISITION COST RATE" MEANS THE COST PAID BY A  PARTIC-
 IPATING  PHARMACY  TO  ACQUIRE  GENERIC,  BRAND  NAME DRUGS, OR BIOLOGIC
 PRODUCTS, OR DRUGS PRODUCED THROUGH GENETIC TECHNOLOGY OR  BIOPHARMACEU-
 TICAL PROCESSES PURSUANT TO COST INVOICES FROM THE PHARMACY.
   (K)  "NATIONAL AVERAGE DRUG ACQUISITION COST" MEANS THE MONTHLY SURVEY
 OF RETAIL PHARMACIES CONDUCTED BY THE FEDERAL CENTERS FOR  MEDICARE  AND
 MEDICAID  SERVICES (CMS) TO DETERMINE AVERAGE ACQUISITION COST FOR MEDI-
 CAID COVERED OUTPATIENT DRUGS.
   § 2. Subdivision 3 of section 280-a  of  the  public  health  law,  as
 amended  by  chapter  128  of  the  laws  of 2022, is amended to read as
 follows:
   3. Prescriptions. (A) A pharmacy benefit manager may not substitute or
 cause the substituting of one prescription drug for another in  dispens-
 ing  a  prescription,  or  alter or cause the altering of the terms of a
 prescription, except with the approval of the prescriber or as explicit-
 ly required or permitted by law, including regulations of the department
 of financial services or the department of  health.  The  superintendent
 and  commissioner,  in  coordination  with each other, are authorized to
 promulgate regulations to determine when  substitution  of  prescription
 drugs  may  be  required or permitted. PROVIDED, HOWEVER, THIS PARAGRAPH
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01972-05-5
              

 S. 5939--A                          2
 
 SHALL NOT APPLY TO PRESCRIPTIONS OR PRESCRIPTION DRUGS  DISTRIBUTED,  OR
 PAID  FOR IN WHOLE OR IN PART, BY A TRUST FUND ESTABLISHED OR MAINTAINED
 UNDER THE LABOR MANAGEMENT RELATIONS ACT (29 U.S. CODE § 186),  PURSUANT
 TO  COVERAGE  REQUIRED BY THE TERMS OF A COLLECTIVE BARGAINING AGREEMENT
 BETWEEN AN EMPLOYER AND  A  LABOR  ORGANIZATION  OR  CERTIFIED  EMPLOYEE
 ORGANIZATION; OR PURSUANT TO A HEALTH PLAN, WELFARE FUND, PHARMACEUTICAL
 PLAN,  OR  OTHER  FORM  OF MEDICAL OR PRESCRIPTION COVERAGE ESTABLISHED,
 ADOPTED, UTILIZED, FUNDED, OR AGREED UPON BY AN  EMPLOYER  AND  A  LABOR
 ORGANIZATION OR CERTIFIED EMPLOYEE ORGANIZATION PURSUANT TO A COLLECTIVE
 BARGAINING AGREEMENT; OR, WHERE THE PLAN, COVERAGE, FUND, OR PROGRAM HAS
 BEEN  COLLECTIVELY  BARGAINED AND PERTAINS TO A SPONSORED MULTI-EMPLOYER
 PLAN, INCLUDING BUT NOT LIMITED TO, PLANS DEVELOPED UNDER ARTICLE FIVE-G
 OF THE GENERAL MUNICIPAL LAW, ARTICLES FORTY-FOUR AND FORTY-SEVEN OF THE
 INSURANCE LAW, OR ANY PLANS CREATED PURSUANT  TO  THE  INTERNAL  REVENUE
 CODE,  EMPLOYEE RETIREMENT INCOME SECURITY ACT OR ANY APPLICABLE FEDERAL
 STATUTE THAT PROVIDES SUCH BENEFITS TO EMPLOYEE AND RETIREE GROUPS.
   (B) TO THE EXTENT PERMITTED UNDER  FEDERAL  LAW,  A  PHARMACY  BENEFIT
 MANAGER  SHALL  PAY  A PARTICIPATING PHARMACY AT MINIMUM AT THE NATIONAL
 AVERAGE DRUG ACQUISITION COST (NADAC) RATE OR AT THE  PHARMACY  ACQUISI-
 TION  COST  RATE  IF  THERE  IS  NOT  A  NADAC RATE, PLUS A PROFESSIONAL
 DISPENSING FEE THAT IS AT MINIMUM THE PROFESSIONAL DISPENSING  FEE  PAID
 UNDER  THE  STATE  MEDICAL  ASSISTANCE  PROGRAM. FOR GENERIC, BRAND NAME
 MEDICATIONS, BIOLOGIC PRODUCTS, OR DRUGS PRODUCED THROUGH GENETIC  TECH-
 NOLOGY  OR  BIOPHARMACEUTICAL PROCESSES AS REQUIRED BY A MANUFACTURER, A
 FEDERAL OR STATE REGULATORY AGENCY, OR  ACCREDITING  BODY  THAT  REQUIRE
 UNIQUE HANDLING, DISTRIBUTION OR ADMINISTRATION, IN-DEPTH PATIENT TEACH-
 ING,  COORDINATION  OF CARE, OR FREQUENT OR SPECIAL MONITORING TO ENSURE
 SUCCESSFUL USE,  SPECIAL  PACKAGING,  SHIPPING  OR  OTHER  COSTS  TO  BE
 INCURRED BY THE PHARMACY FOR THE DISPENSING PROCESS THAT IS GREATER THAN
 THE  PROFESSIONAL  DISPENSING  FEE  PAID BY THE STATE MEDICAL ASSISTANCE
 PROGRAM, PARTICIPATING PHARMACIES SHALL BE PAID A PROFESSIONAL  DISPENS-
 ING  FEE  FOR THESE COSTS TO ENSURE A PARTICIPATING PHARMACY IS NOT PAID
 LESS THAN ITS COST TO ACQUIRE AND  DISPENSE  MEDICATIONS.    A  PHARMACY
 BENEFIT MANAGER SHALL NOT PAY A PARTICIPATING PHARMACY BELOW ITS PHARMA-
 CY  ACQUISITION  COST BUT MAY REQUIRE DEMONSTRATION OF SUCH COST THROUGH
 THE PROVISION OF PHARMACY INVOICES. PROVIDED,  HOWEVER,  THIS  PARAGRAPH
 SHALL  NOT  APPLY  TO PRESCRIPTIONS, PRESCRIPTION DRUGS, OR PAYMENTS FOR
 PRESCRIPTION DRUGS, DISTRIBUTED, OR PAID FOR IN WHOLE OR IN PART,  BY  A
 TRUST   FUND  ESTABLISHED  OR  MAINTAINED  UNDER  THE  LABOR  MANAGEMENT
 RELATIONS ACT (29 U.S. CODE § 186), PURSUANT TO COVERAGE REQUIRED BY THE
 TERMS OF A COLLECTIVE BARGAINING AGREEMENT BETWEEN  AN  EMPLOYER  AND  A
 LABOR  ORGANIZATION OR CERTIFIED EMPLOYEE ORGANIZATION; OR PURSUANT TO A
 HEALTH PLAN, WELFARE FUND, PHARMACEUTICAL PLAN, OR OTHER FORM OF MEDICAL
 OR PRESCRIPTION COVERAGE  ESTABLISHED,  ADOPTED,  UTILIZED,  FUNDED,  OR
 AGREED UPON BY AN EMPLOYER AND A LABOR ORGANIZATION OR CERTIFIED EMPLOY-
 EE ORGANIZATION PURSUANT TO A COLLECTIVE BARGAINING AGREEMENT; OR, WHERE
 THE PLAN, COVERAGE, FUND, OR PROGRAM HAS BEEN COLLECTIVELY BARGAINED AND
 PERTAINS  TO  A SPONSORED MULTI-EMPLOYER PLAN, INCLUDING BUT NOT LIMITED
 TO, PLANS DEVELOPED UNDER ARTICLE FIVE-G OF THE GENERAL  MUNICIPAL  LAW,
 ARTICLES  FORTY-FOUR  AND FORTY-SEVEN OF THE INSURANCE LAW, OR ANY PLANS
 CREATED PURSUANT TO  THE  INTERNAL  REVENUE  CODE,  EMPLOYEE  RETIREMENT
 INCOME SECURITY ACT OR ANY APPLICABLE FEDERAL STATUTE THAT PROVIDES SUCH
 BENEFITS TO EMPLOYEE AND RETIREE GROUPS.
   §  3.  The  opening paragraph of subdivision 4 of section 280-a of the
 public health law, as added by chapter 828  of  the  laws  of  2021,  is
 amended to read as follows:
 S. 5939--A                          3
 
   A  pharmacy benefit manager shall, with respect to contracts between a
 pharmacy benefit manager and a pharmacy or,  alternatively,  a  pharmacy
 benefit  manager  and a pharmacy's contracting agent, such as a pharmacy
 services administrative organization, include a  reasonable  process  to
 appeal, investigate and resolve disputes regarding multi-source generic,
 BRAND  NAME,  AND  BIOLOGIC  PRODUCT, AND DRUGS PRODUCED THROUGH GENETIC
 TECHNOLOGY OR BIOPHARMACEUTICAL  PROCESSES  drug  pricing.  The  appeals
 process shall include the following provisions:
   §  4.  Section  2911  of  the insurance law is amended by adding a new
 subsection (d) to read as follows:
   (D) TO THE EXTENT PERMITTED UNDER  FEDERAL  LAW,  A  PHARMACY  BENEFIT
 MANAGER  SHALL  PAY  A PARTICIPATING PHARMACY AT MINIMUM AT THE NATIONAL
 AVERAGE DRUG ACQUISITION COST (NADAC) RATE, AS  DEFINED  IN  SUBDIVISION
 ONE  OF SECTION TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW, OR AT THE
 PHARMACY ACQUISITION COST RATE, AS DEFINED IN SUBDIVISION ONE OF SECTION
 TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW, IF THERE IS NOT  A  NADAC
 RATE,  PLUS A PROFESSIONAL DISPENSING FEE THAT IS AT MINIMUM THE PROFES-
 SIONAL DISPENSING FEE PAID UNDER THE STATE MEDICAL  ASSISTANCE  PROGRAM.
 FOR  GENERIC,  BRAND  NAME  MEDICATIONS,  BIOLOGIC  PRODUCTS,  OR  DRUGS
 PRODUCED THROUGH GENETIC TECHNOLOGY OR  BIOPHARMACEUTICAL  PROCESSES  AS
 REQUIRED  BY  A  MANUFACTURER,  A FEDERAL OR STATE REGULATORY AGENCY, OR
 ACCREDITING BODY THAT REQUIRE UNIQUE HANDLING, DISTRIBUTION OR  ADMINIS-
 TRATION, IN-DEPTH PATIENT TEACHING, COORDINATION OF CARE, OR FREQUENT OR
 SPECIAL MONITORING TO ENSURE SUCCESSFUL USE, SPECIAL PACKAGING, SHIPPING
 OR OTHER COSTS TO BE INCURRED BY THE PHARMACY FOR THE DISPENSING PROCESS
 THAT  IS  GREATER THAN THE PROFESSIONAL DISPENSING FEE PAID BY THE STATE
 MEDICAL ASSISTANCE PROGRAM, PARTICIPATING PHARMACIES  SHALL  BE  PAID  A
 PROFESSIONAL  DISPENSING  FEE  FOR THESE COSTS TO ENSURE A PARTICIPATING
 PHARMACY IS NOT PAID LESS THAN ITS COST TO ACQUIRE AND DISPENSE  MEDICA-
 TIONS. A PHARMACY BENEFIT MANAGER SHALL NOT PAY A PARTICIPATING PHARMACY
 BELOW  ITS  PHARMACY  ACQUISITION  COST BUT MAY REQUIRE DEMONSTRATION OF
 SUCH COST THROUGH THE PROVISION OF PHARMACY INVOICES. A PHARMACY BENEFIT
 MANAGER SHALL, WITH RESPECT TO  CONTRACTS  BETWEEN  A  PHARMACY  BENEFIT
 MANAGER AND A PHARMACY OR, ALTERNATIVELY, A PHARMACY BENEFIT MANAGER AND
 A  PHARMACY'S CONTRACTING AGENT, SUCH AS A PHARMACY SERVICES ADMINISTRA-
 TIVE ORGANIZATION, INCLUDE A REASONABLE PROCESS TO  APPEAL,  INVESTIGATE
 AND RESOLVE DISPUTES REGARDING MULTI-SOURCE GENERIC, BRAND NAME, BIOLOG-
 IC  PRODUCT, AND DRUGS PRODUCED THROUGH GENETIC TECHNOLOGY OR BIOPHARMA-
 CEUTICAL PROCESSES DRUG PRICING. THE APPEALS PROCESS SHALL BE CONSIDERED
 WITHIN THE EXISTING APPEALS PROCESS UNDER SECTION TWO  HUNDRED  EIGHTY-A
 OF  THE  PUBLIC HEALTH LAW.  PROVIDED, HOWEVER, THIS PARAGRAPH SHALL NOT
 APPLY TO PRESCRIPTIONS, PRESCRIPTION DRUGS, OR PAYMENTS FOR PRESCRIPTION
 DRUGS, DISTRIBUTED, OR PAID FOR IN WHOLE OR IN PART,  BY  A  TRUST  FUND
 ESTABLISHED  OR  MAINTAINED UNDER THE LABOR MANAGEMENT RELATIONS ACT (29
 U.S. CODE § 186), PURSUANT TO  COVERAGE  REQUIRED  BY  THE  TERMS  OF  A
 COLLECTIVE  BARGAINING  AGREEMENT BETWEEN AN EMPLOYER AND A LABOR ORGAN-
 IZATION OR CERTIFIED EMPLOYEE ORGANIZATION;  OR  PURSUANT  TO  A  HEALTH
 PLAN,  WELFARE  FUND,  PHARMACEUTICAL  PLAN, OR OTHER FORM OF MEDICAL OR
 PRESCRIPTION COVERAGE ESTABLISHED, ADOPTED, UTILIZED, FUNDED, OR  AGREED
 UPON  BY  AN  EMPLOYER  AND  A  LABOR ORGANIZATION OR CERTIFIED EMPLOYEE
 ORGANIZATION PURSUANT TO A COLLECTIVE BARGAINING  AGREEMENT;  OR,  WHERE
 THE PLAN, COVERAGE, FUND, OR PROGRAM HAS BEEN COLLECTIVELY BARGAINED AND
 PERTAINS  TO  A SPONSORED MULTI-EMPLOYER PLAN, INCLUDING BUT NOT LIMITED
 TO, PLANS DEVELOPED UNDER ARTICLE FIVE-G OF THE GENERAL  MUNICIPAL  LAW,
 ARTICLES  FORTY-FOUR  AND FORTY-SEVEN OF THE INSURANCE LAW, OR ANY PLANS
 CREATED PURSUANT TO  THE  INTERNAL  REVENUE  CODE,  EMPLOYEE  RETIREMENT
 S. 5939--A                          4
 
 INCOME SECURITY ACT OR ANY APPLICABLE FEDERAL STATUTE THAT PROVIDES SUCH
 BENEFITS TO EMPLOYEE AND RETIREE GROUPS.
   § 5. This act shall take effect January 1, 2026 and shall apply to all
 policies  and contracts issued, renewed, modified, altered or amended on
 and after such date.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5939--C
     Cal. No. 305
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                               March 4, 2025
                                ___________
 
 Introduced  by  Sens.  SKOUFIS, ADDABBO, BYNOE, COONEY, FAHY, FERNANDEZ,
   GALLIVAN, GRIFFO,  HINCHEY,  JACKSON,  LIU,  MARTINS,  MAYER,  RHOADS,
   RIVERA,  C. RYAN,  SALAZAR,  SCARCELLA-SPANTON, STAVISKY -- read twice
   and ordered printed, and when printed to be committed to the Committee
   on Health -- committee discharged, bill amended, ordered reprinted  as
   amended  and  recommitted  to  said committee -- committee discharged,
   bill amended, ordered reprinted as amended  and  recommitted  to  said
   committee -- recommitted to the Committee on Health in accordance with
   Senate  Rule  6,  sec.  8  --  reported favorably from said committee,
   ordered to first and second report, ordered to a third reading, passed
   by Senate and delivered to the Assembly, recalled, vote  reconsidered,
   restored  to  third  reading, amended and ordered reprinted, retaining
   its place in the order of third reading
 
 AN ACT to amend the public health law and the insurance law, in relation
   to payments by pharmacy benefit managers to participating pharmacies
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision 1 of section 280-a of the public health law is
 amended by adding two new paragraphs (j) and (k) to read as follows:
   (J) "PHARMACY ACQUISITION COST RATE" MEANS THE COST PAID BY A  PARTIC-
 IPATING  PHARMACY  TO  ACQUIRE  GENERIC,  BRAND  NAME DRUGS, OR BIOLOGIC
 PRODUCTS, OR DRUGS PRODUCED THROUGH GENETIC TECHNOLOGY OR  BIOPHARMACEU-
 TICAL PROCESSES PURSUANT TO COST INVOICES FROM THE PHARMACY.
   (K)  "NATIONAL AVERAGE DRUG ACQUISITION COST" MEANS THE MONTHLY SURVEY
 OF RETAIL PHARMACIES CONDUCTED BY THE FEDERAL CENTERS FOR  MEDICARE  AND
 MEDICAID  SERVICES (CMS) TO DETERMINE AVERAGE ACQUISITION COST FOR MEDI-
 CAID COVERED OUTPATIENT DRUGS.
   § 2. Subdivision 3 of section 280-a  of  the  public  health  law,  as
 amended  by  chapter  128  of  the  laws  of 2022, is amended to read as
 follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01972-09-6
              

 S. 5939--C                          2
 
   3. Prescriptions. (A) A pharmacy benefit manager may not substitute or
 cause the substituting of one prescription drug for another in  dispens-
 ing  a  prescription,  or  alter or cause the altering of the terms of a
 prescription, except with the approval of the prescriber or as explicit-
 ly required or permitted by law, including regulations of the department
 of  financial  services  or the department of health. The superintendent
 and commissioner, in coordination with each  other,  are  authorized  to
 promulgate  regulations  to  determine when substitution of prescription
 drugs may be required or permitted.
   (B) TO THE EXTENT PERMITTED UNDER  FEDERAL  LAW,  A  PHARMACY  BENEFIT
 MANAGER  SHALL  PAY  A PARTICIPATING PHARMACY AT MINIMUM AT THE NATIONAL
 AVERAGE DRUG ACQUISITION COST (NADAC) RATE OR AT THE  PHARMACY  ACQUISI-
 TION  COST  RATE  IF  THERE  IS  NOT  A  NADAC RATE, PLUS A PROFESSIONAL
 DISPENSING FEE THAT IS AT MINIMUM THE PROFESSIONAL DISPENSING  FEE  PAID
 UNDER  THE  STATE  MEDICAL  ASSISTANCE  PROGRAM. FOR GENERIC, BRAND NAME
 MEDICATIONS, BIOLOGIC PRODUCTS, OR DRUGS PRODUCED THROUGH GENETIC  TECH-
 NOLOGY  OR  BIOPHARMACEUTICAL PROCESSES AS REQUIRED BY A MANUFACTURER, A
 FEDERAL OR STATE REGULATORY AGENCY, OR  ACCREDITING  BODY  THAT  REQUIRE
 UNIQUE HANDLING, DISTRIBUTION OR ADMINISTRATION, IN-DEPTH PATIENT TEACH-
 ING,  COORDINATION  OF CARE, OR FREQUENT OR SPECIAL MONITORING TO ENSURE
 SUCCESSFUL USE,  SPECIAL  PACKAGING,  SHIPPING  OR  OTHER  COSTS  TO  BE
 INCURRED BY THE PHARMACY FOR THE DISPENSING PROCESS THAT IS GREATER THAN
 THE  PROFESSIONAL  DISPENSING  FEE  PAID BY THE STATE MEDICAL ASSISTANCE
 PROGRAM, PARTICIPATING PHARMACIES SHALL BE PAID A PROFESSIONAL  DISPENS-
 ING  FEE  FOR THESE COSTS TO ENSURE A PARTICIPATING PHARMACY IS NOT PAID
 LESS THAN ITS COST TO ACQUIRE AND  DISPENSE  MEDICATIONS.    A  PHARMACY
 BENEFIT MANAGER SHALL NOT PAY A PARTICIPATING PHARMACY BELOW ITS PHARMA-
 CY  ACQUISITION  COST BUT MAY REQUIRE DEMONSTRATION OF SUCH COST THROUGH
 THE PROVISION OF PHARMACY INVOICES. PROVIDED,  HOWEVER,  THIS  PARAGRAPH
 SHALL  NOT  APPLY  TO PRESCRIPTIONS, PRESCRIPTION DRUGS, OR PAYMENTS FOR
 PRESCRIPTION DRUGS, DISTRIBUTED, OR PAID FOR IN WHOLE OR IN PART,  BY  A
 TRUST   FUND  ESTABLISHED  OR  MAINTAINED  UNDER  THE  LABOR  MANAGEMENT
 RELATIONS ACT (29 U.S. CODE § 186), PURSUANT TO COVERAGE REQUIRED BY THE
 TERMS OF A COLLECTIVE BARGAINING AGREEMENT BETWEEN  AN  EMPLOYER  AND  A
 LABOR  ORGANIZATION OR CERTIFIED EMPLOYEE ORGANIZATION; OR PURSUANT TO A
 HEALTH PLAN, WELFARE FUND, PHARMACEUTICAL PLAN, OR OTHER FORM OF MEDICAL
 OR PRESCRIPTION COVERAGE  ESTABLISHED,  ADOPTED,  UTILIZED,  FUNDED,  OR
 AGREED UPON BY AN EMPLOYER AND A LABOR ORGANIZATION OR CERTIFIED EMPLOY-
 EE ORGANIZATION PURSUANT TO A COLLECTIVE BARGAINING AGREEMENT; OR, WHERE
 THE PLAN, COVERAGE, FUND, OR PROGRAM HAS BEEN COLLECTIVELY BARGAINED AND
 PERTAINS  TO  A SPONSORED MULTI-EMPLOYER PLAN, INCLUDING BUT NOT LIMITED
 TO, PLANS DEVELOPED UNDER ARTICLE FIVE-G OF THE GENERAL  MUNICIPAL  LAW,
 ARTICLES  FORTY-FOUR  AND FORTY-SEVEN OF THE INSURANCE LAW, OR ANY PLANS
 CREATED PURSUANT TO  THE  INTERNAL  REVENUE  CODE,  EMPLOYEE  RETIREMENT
 INCOME SECURITY ACT OR ANY APPLICABLE FEDERAL STATUTE THAT PROVIDES SUCH
 BENEFITS TO EMPLOYEE AND RETIREE GROUPS.
   §  3.  The  opening paragraph of subdivision 4 of section 280-a of the
 public health law, as added by chapter 828  of  the  laws  of  2021,  is
 amended to read as follows:
   A  pharmacy benefit manager shall, with respect to contracts between a
 pharmacy benefit manager and a pharmacy or,  alternatively,  a  pharmacy
 benefit  manager  and a pharmacy's contracting agent, such as a pharmacy
 services administrative organization, include a  reasonable  process  to
 appeal, investigate and resolve disputes regarding multi-source generic,
 BRAND  NAME,  AND  BIOLOGIC  PRODUCT, AND DRUGS PRODUCED THROUGH GENETIC
 S. 5939--C                          3
 
 TECHNOLOGY OR BIOPHARMACEUTICAL  PROCESSES  drug  pricing.  The  appeals
 process shall include the following provisions:
   §  4.  Section  2911  of  the insurance law is amended by adding a new
 subsection (d) to read as follows:
   (D) TO THE EXTENT PERMITTED UNDER  FEDERAL  LAW,  A  PHARMACY  BENEFIT
 MANAGER  SHALL  PAY  A PARTICIPATING PHARMACY AT MINIMUM AT THE NATIONAL
 AVERAGE DRUG ACQUISITION COST (NADAC) RATE, AS  DEFINED  IN  SUBDIVISION
 ONE  OF SECTION TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW, OR AT THE
 PHARMACY ACQUISITION COST RATE, AS DEFINED IN SUBDIVISION ONE OF SECTION
 TWO HUNDRED EIGHTY-A OF THE PUBLIC HEALTH LAW, IF THERE IS NOT  A  NADAC
 RATE,  PLUS A PROFESSIONAL DISPENSING FEE THAT IS AT MINIMUM THE PROFES-
 SIONAL DISPENSING FEE PAID UNDER THE STATE MEDICAL  ASSISTANCE  PROGRAM.
 FOR  GENERIC,  BRAND  NAME  MEDICATIONS,  BIOLOGIC  PRODUCTS,  OR  DRUGS
 PRODUCED THROUGH GENETIC TECHNOLOGY OR  BIOPHARMACEUTICAL  PROCESSES  AS
 REQUIRED  BY  A  MANUFACTURER,  A FEDERAL OR STATE REGULATORY AGENCY, OR
 ACCREDITING BODY THAT REQUIRE UNIQUE HANDLING, DISTRIBUTION OR  ADMINIS-
 TRATION, IN-DEPTH PATIENT TEACHING, COORDINATION OF CARE, OR FREQUENT OR
 SPECIAL MONITORING TO ENSURE SUCCESSFUL USE, SPECIAL PACKAGING, SHIPPING
 OR OTHER COSTS TO BE INCURRED BY THE PHARMACY FOR THE DISPENSING PROCESS
 THAT  IS  GREATER THAN THE PROFESSIONAL DISPENSING FEE PAID BY THE STATE
 MEDICAL ASSISTANCE PROGRAM, PARTICIPATING PHARMACIES  SHALL  BE  PAID  A
 PROFESSIONAL  DISPENSING  FEE  FOR THESE COSTS TO ENSURE A PARTICIPATING
 PHARMACY IS NOT PAID LESS THAN ITS COST TO ACQUIRE AND DISPENSE  MEDICA-
 TIONS. A PHARMACY BENEFIT MANAGER SHALL NOT PAY A PARTICIPATING PHARMACY
 BELOW  ITS  PHARMACY  ACQUISITION  COST BUT MAY REQUIRE DEMONSTRATION OF
 SUCH COST THROUGH THE PROVISION OF PHARMACY INVOICES. A PHARMACY BENEFIT
 MANAGER SHALL, WITH RESPECT TO  CONTRACTS  BETWEEN  A  PHARMACY  BENEFIT
 MANAGER AND A PHARMACY OR, ALTERNATIVELY, A PHARMACY BENEFIT MANAGER AND
 A  PHARMACY'S CONTRACTING AGENT, SUCH AS A PHARMACY SERVICES ADMINISTRA-
 TIVE ORGANIZATION, INCLUDE A REASONABLE PROCESS TO  APPEAL,  INVESTIGATE
 AND RESOLVE DISPUTES REGARDING MULTI-SOURCE GENERIC, BRAND NAME, BIOLOG-
 IC  PRODUCT, AND DRUGS PRODUCED THROUGH GENETIC TECHNOLOGY OR BIOPHARMA-
 CEUTICAL PROCESSES DRUG PRICING. THE APPEALS PROCESS SHALL BE CONSIDERED
 WITHIN THE EXISTING APPEALS PROCESS UNDER SECTION TWO  HUNDRED  EIGHTY-A
 OF  THE  PUBLIC HEALTH LAW.  PROVIDED, HOWEVER, THIS PARAGRAPH SHALL NOT
 APPLY TO PRESCRIPTIONS, PRESCRIPTION DRUGS, OR PAYMENTS FOR PRESCRIPTION
 DRUGS, DISTRIBUTED, OR PAID FOR IN WHOLE OR IN PART,  BY  A  TRUST  FUND
 ESTABLISHED  OR  MAINTAINED UNDER THE LABOR MANAGEMENT RELATIONS ACT (29
 U.S. CODE § 186), PURSUANT TO  COVERAGE  REQUIRED  BY  THE  TERMS  OF  A
 COLLECTIVE  BARGAINING  AGREEMENT BETWEEN AN EMPLOYER AND A LABOR ORGAN-
 IZATION OR CERTIFIED EMPLOYEE ORGANIZATION;  OR  PURSUANT  TO  A  HEALTH
 PLAN,  WELFARE  FUND,  PHARMACEUTICAL  PLAN, OR OTHER FORM OF MEDICAL OR
 PRESCRIPTION COVERAGE ESTABLISHED, ADOPTED, UTILIZED, FUNDED, OR  AGREED
 UPON  BY  AN  EMPLOYER  AND  A  LABOR ORGANIZATION OR CERTIFIED EMPLOYEE
 ORGANIZATION PURSUANT TO A COLLECTIVE BARGAINING  AGREEMENT;  OR,  WHERE
 THE PLAN, COVERAGE, FUND, OR PROGRAM HAS BEEN COLLECTIVELY BARGAINED AND
 PERTAINS  TO  A SPONSORED MULTI-EMPLOYER PLAN, INCLUDING BUT NOT LIMITED
 TO, PLANS DEVELOPED UNDER ARTICLE FIVE-G OF THE GENERAL  MUNICIPAL  LAW,
 ARTICLES  FORTY-FOUR  AND  FORTY-SEVEN  OF  THIS  CHAPTER,  OR ANY PLANS
 CREATED PURSUANT TO  THE  INTERNAL  REVENUE  CODE,  EMPLOYEE  RETIREMENT
 INCOME SECURITY ACT OR ANY APPLICABLE FEDERAL STATUTE THAT PROVIDES SUCH
 BENEFITS TO EMPLOYEE AND RETIREE GROUPS.
   § 5. This act shall take effect January 1, 2027 and shall apply to all
 policies  and contracts issued, renewed, modified, altered or amended on
 and after such date.