Requires insurers to cover the substitution of a brand name prescription drug when the federal food and drug administration has declared that there is a supply issue with a generic drug.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1428
SPONSOR: Forrest TITLE OF BILL:
An act to amend the insurance law, in relation to substituting brand
name prescription drugs in the case of a drug shortage
PURPOSE OR GENERAL IDEA OF BILL:
This bill would ensure that if a covered generic drug is unavailable due
to a drug shortage insurers would be required to cover the brand-name
drug at the same cost as the generic for the duration of the shortage.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends section 3242 of the insurance law to provide that
during a supply issue recognized by the FDA, insurers covering a generic
drug in their formulary will also cover the brand-name equivalent at no
increased price.
Section 2 amends section 4329 of the insurance law to provide that
during a supply issue recognized by the FDA, insurers covering a generic
drug in their formulary will also cover the brand-name equivalent at no
increased price.
Section 3 sets the effective date.
JUSTIFICATION:
In light of recent shortages of generic drugs, it is imperative that
insurance providers cover brand-name drugs at the same price as generics
during times of shortage. Drug shortages pose a public health concern,
as they can impact the availability of essential medications for a wide
range of conditions. Ensuring that patients have access to needed medi-
cations at affordable prices is crucial for maintaining public health
and preventing unnecessary complications. This bill would ensure such
access by requiring that, in the event the FDA recognizes that there is
an ongoing supply issue with a generic drug, insurers providing coverage
of that generic drug in their formulary will also cover the brand-name
version of that drug for the duration of the shortage. This proactive
measure can help safeguard patient health, maintain continuity of care,
and promote cost-effectiveness within the healthcare system.
During drug shortages, patients may have to switch from their prescribed
generic medication to the brand-name version of that same medication.
However, many insurers only provide coverage for the generic version of
drugs, regardless of their availability. This often requires patients to
choose between doing without the medication they have been prescribed,
paying exorbitant fees, or attempting to switch to a different medica-
tion entirely than the one that they have been prescribed by their
doctor. Such switches may disrupt a patient's continuity of care and
treatment plan. By covering brand-name drugs currently experiencing
shortages at generic prices, insurers can ensure that patients have
access to the medication they need without compromising their health or
continuity of care.
Finally, while brand-name drugs are typically more expensive than gener-
ics, covering them at generic prices during shortages can actually be
cost-effective in the long run. Avoiding potential health complications
or hospitalizations resulting from medication switches can ultimately
save money for insurers and the healthcare system as a whole.
PRIOR LEGISLATIVE HISTORY:
2023-2024: A.10185 (Forrest) - referred to insurance
FISCAL IMPLICATIONS:
TBD
EFFECTIVE DATE:
Immediately
