NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9055
SPONSOR: McDonald
 
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. larg-
er 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 process 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.
STATE OF NEW YORK
________________________________________________________________________
9055
IN ASSEMBLY
February 5, 2024
___________
Introduced by M. of A. McDONALD -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the insurance law, in relation to prescription drug
formulary coverage for interchangeable biologics and biosimilars
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 4 of subsection (c-1) of section 4903 of the
2 insurance law, as added by chapter 512 of the laws of 2016, is amended
3 to read as follows:
4 (4) The insured is stable on a prescription drug or drugs selected by
5 their health care professional for the medical condition under consider-
6 ation, provided that this shall not prevent a utilization review agent
7 from requiring an insured to try an AB-rated generic equivalent, an
8 interchangeable biological product , or biosimilar prior to providing
9 coverage for the equivalent brand name prescription drug or drugs; or
10 § 2. Subparagraph (A) of paragraph 3 of subsection (c) of section 3242
11 of the insurance law, as added by chapter 99 of the laws of 2022, is
12 amended to read as follows:
13 (A) An insurer with a formulary that includes two or more tiers of
14 benefits providing for different deductibles, copayments or coinsurance
15 applicable to prescription drugs in each tier may move a prescription
16 drug to a tier with a larger deductible, copayment or coinsurance if an
17 AB-rated generic equivalent [or], an interchangeable biological product,
18 or biosimilar for such prescription drug is added to the formulary at
19 the same time.
20 § 3. Subparagraph (A) of paragraph 3 of subsection (c) of section
21 4329 of the insurance law, as added by chapter 99 of the laws of 2022,
22 is amended to read as follows:
23 (A) A corporation with a formulary that includes two or more tiers of
24 benefits providing for different deductibles, copayments or coinsurance
25 applicable to prescription drugs in each tier may move a prescription
26 drug to a tier with a larger deductible, copayment or coinsurance if an
27 AB-rated generic equivalent [or], an interchangeable biological product,
28 or biosimilar for such prescription drug is added to the formulary at
29 the same time.
30 § 4. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11861-01-3