New York State Assembly

 
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A01707 Summary:

A01707 Actions:

A01707 Committee Votes:

Committee:INSURANCE   Chair:Weprin      
DATE:04/26/2023AYE/NAY:20/4  Action: Favorable refer to committee Codes        
Weprin
Aye
Blankenbush
Nay
Cook
Aye
Hawley
Nay
Pretlow
Aye
Palmesano
Nay
Lavine
Aye
Gandolfo
Aye
Steck
Aye
Curran
Aye
Dilan
Aye
Jensen
Aye
Hunter
Aye
Blumencranz
Nay
Rosenthal
Aye
Bendett
Aye
Stern
Aye
Jacobson
Aye
Meeks
Aye
Forrest
Aye
Anderson
Aye
Cruz
Aye
Bores
Aye
Lunsford
Aye

Committee:CODES   Chair:Dinowitz      
DATE:05/09/2023AYE/NAY:16/5  Action: Favorable         
Dinowitz
Aye
Morinello
Nay
Pretlow
Aye
Reilly
Aye
Cook
Aye
Mikulin
Nay
O'Donnell
Aye
Tannousis
Aye
Lavine
Aye
Curran
Aye
Weprin
Aye
Angelino
Nay
Hevesi
Nay
Flood
Nay
Seawright
Aye
Rosenthal
Aye
Walker
Absent
Vanel
Aye
Cruz
Aye
Carroll
Aye
Simon
Aye
Epstein
Aye

A01707 Floor Votes:

A01707 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A1707A
 
SPONSOR: Rosenthal D

 
TITLE OF BILL:
 
An act to amend the insurance law, in relation to requiring certain
manufacturers of prescription drugs to notify the superintendant of any
proposed increase of the wholesale acquisition cost of such prescription
drugs
 
 
PURPOSE:
 
This bill would require manufacturers to provide at least 60-day notice
of their intent to raise wholesale prescription drug costs to the
Department of Financial Services if the total cost of the drug has
increased 16% or more over the 24 months prior to the increase.
 
 
SUMMARY OF PROVISIONS:
 
Section 1 amends the insurance law to add new section 111-a relating to
notification of prescription drug price increases by manufacturers.
Section 2 provides the effective date.
 
 
JUSTIFICATION:
 
This legislation will provide early warning of increases in the price of
prescription drugs. Breakthrough medications offer tremendous clinical
benefits for patients, but they should not be a blank check.  The prices
charged for prescription drugs are a major threat to keeping health care
affordable for New York employers and consumers.  Exorbitant increases
in prescription drug prices have been consistent across all segments of
the pharmaceutical industry. For example, in 2016 Mylan increased the
price for a package of two EpiPen Auto-Injectors from just over $100 to
more than $600 without any warning or public justification. Since the
start of 2019, more than two dozen drug makers have raised the prices on
a wide array of drugs by double-digit percentages.
 
The bill will not prohibit manufacturers from increasing prices, but
would require notice of price increases, enhancing transparency of
prescription drug costs. Providing notice before a price increase of
more than 16 percent takes effect is important so that consumers,
employers, providers, health plans and the state are prepared and can
take steps before the increase is implemented. It would also be impor-
tant for the policymakers to be provided with the rationale for the
increase including whether the price increases will benefit the public
to help fund research and development that improve patient care or will
it merely result in increasing the cost of health care.
 
 
LEGISLATIVE HISTORY:
 
2019 & 2020:S5942 /A8253 - Referred to Health Committees in both houses.
 
2021 & 2022:S7499E/ A6638 - Passed Senate. Died in Assembly Health
Committee
 
 
FISCAL IMPLICATIONS:
 
None.
 
 
EFFECTIVE DATE:
This act shall take effect immediately.

A01707 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         1707--A
                                                                Cal. No. 196
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 18, 2023
                                       ___________
 
        Introduced   by  M.  of  A.  D. ROSENTHAL,  DICKENS,  COLTON,  WILLIAMS,
          SEAWRIGHT, COOK, SIMON, JACOBSON, HUNTER, DINOWITZ, ZINERMAN,  WEPRIN,
          MEEKS,  SHIMSKY, L. ROSENTHAL, BUTTENSCHON, RAMOS, LUPARDO, LEVENBERG,
          STIRPE, GONZALEZ-ROJAS -- read once and referred to the  Committee  on
          Health  -- reported and referred to the Committee on Codes -- reported
          from committee, advanced to  a  third  reading,  amended  and  ordered
          reprinted, retaining its place on the order of third reading
 
        AN  ACT  to  amend  the  insurance law, in relation to requiring certain
          manufacturers of prescription drugs to notify  the  superintendant  of
          any  proposed  increase  of  the  wholesale  acquisition  cost of such
          prescription drugs
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. The insurance law is amended by adding a new section 111-a
     2  to read as follows:
     3    § 111-a. Notification of prescription drug price increases by manufac-
     4  turers. (a) This section shall apply to a manufacturer of a prescription
     5  drug that is purchased or reimbursed in this state by any of the follow-
     6  ing:
     7    (1) An insurance company authorized in this state  to  write  accident
     8  and  health  insurance,  a  company organized pursuant to article forty-
     9  three of this chapter,  a  municipal  cooperative  health  benefit  plan
    10  established  pursuant  to article forty-seven of this chapter, an organ-
    11  ization certified pursuant to article forty-four of  the  public  health
    12  law,  an  institution  of higher education certified pursuant to section
    13  one thousand one hundred twenty-four of this chapter, or  the  New  York
    14  state  health  insurance  plan established pursuant to article eleven of
    15  the civil service law; or
    16    (2) A pharmacy benefit manager, including an entity that  directly  or
    17  through an intermediary, manages the prescription drug coverage provided
    18  by  a  health insurer under a contract or policy delivered or issued for
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00641-02-3
        A. 1707--A                          2
 
     1  delivery in this state or a health plan subject to section three hundred
     2  sixty-four-j of the social services law, including  the  processing  and
     3  payment of claims for prescription drugs, the performance of drug utili-
     4  zation  review, the processing of drug prior authorization requests, the
     5  adjudication of appeals  or  grievances  related  to  prescription  drug
     6  coverage,  contracting with network pharmacies, and controlling the cost
     7  of covered prescription drugs.
     8    (b) (1) A manufacturer of a prescription drug with a wholesale  acqui-
     9  sition  cost  of  more  than forty dollars for a course of therapy shall
    10  notify the superintendent, his or her deputy or other officer designated
    11  by the superintendent, if the increase in the wholesale acquisition cost
    12  of such prescription drug is more than sixteen  percent,  including  the
    13  proposed  increase and the cumulative increases that occurred within the
    14  previous twenty-four months prior to the planned effective date  of  the
    15  increase.    For  purposes  of  this  section,  a "course of therapy" is
    16  defined as either of the following:
    17    (i) the recommended daily dosage units of a prescription drug pursuant
    18  to its prescribing label as approved by the federal Food and Drug Admin-
    19  istration for thirty days; or
    20    (ii) the recommended daily dosage units of a prescription drug  pursu-
    21  ant  to  its  prescribing label as approved by the federal Food and Drug
    22  Administration for a normal course of treatment that is less than thirty
    23  days.
    24    (2) (i) The notice required by paragraph one of this subsection  shall
    25  be  provided  in writing to the superintendent at least sixty days prior
    26  to the planned effective date of the  increase  and  shall  include  the
    27  proposed  increase and the cumulative increases that occurred within the
    28  previous twenty-four months.
    29    (ii) The superintendent shall forthwith publish the notice required by
    30  paragraph one of this subsection on the department of financial services
    31  website within five days of its receipt.
    32    (3) (i) The notice required by paragraph one of this subsection  shall
    33  include the date of the increase, the current wholesale acquisition cost
    34  of  the  prescription drug, and the dollar amount of the future increase
    35  in the wholesale acquisition cost of the prescription drug.
    36    (ii) The notice required by paragraph one  of  this  subsection  shall
    37  include  a  statement  regarding  whether a change or improvement in the
    38  drug necessitates the price increase.  If  so,  the  manufacturer  shall
    39  describe the change or improvement.
    40    (4)  Information  supplied  by a manufacturer pursuant to this section
    41  that the manufacturer has reasonably designated as a trade secret  shall
    42  be  considered  confidential  and  a  trade secret, shall be exempt from
    43  public disclosure and copying under article six of the  public  officers
    44  law and shall not be disclosed directly or indirectly by the superinten-
    45  dent.  Notwithstanding  the foregoing sentence, the superintendent shall
    46  be permitted to disclose information in an  aggregated  format  if  such
    47  aggregate  information cannot directly or indirectly be used to identify
    48  trade secret information related  to  a  specific  manufacturer  or  the
    49  manufacturer's  prescription  drug,  including  but  not  limited to any
    50  information related to pricing for the manufacturer's prescription  drug
    51  that has been reasonably designated as a trade secret.
    52    (5) In the event that a manufacturer of a prescription drug subject to
    53  this  section  does not report the information required in paragraph one
    54  of this subsection, the  superintendent  is  authorized  to  impose  any
    55  penalty  or  remedy authorized by this chapter, after notice and a hear-
    56  ing, against such manufacturer of up to five thousand  dollars  per  day
        A. 1707--A                          3
 
     1  for  every day after the reporting period described in this section that
     2  the required information is not reported.
     3    § 2. This act shall take effect on the one hundred eightieth day after
     4  it shall have become a law.