New York to Regulate Pharmacy Benefit Managers | Arent Renard


The new law adds section 29 to the Insurance Act and defines “pharmaceutical benefit manager” as any entity providing “pharmaceutical benefit management services”, which includes “the purchase of prescription drugs to be dispensed to patients. patients, or the administration or management of prescription drugs benefits, including, but not limited to, any of the following:

  1. postal service pharmacy;
  2. handling complaints, managing retail networks or paying complaints to pharmacies for the dispensing of prescription drugs;
  3. development or management of a clinical or other formulary or list of preferred drugs;
  4. negotiating or administering discounts, rebates, payment differentials or other incentives, for the inclusion of particular prescription drugs in a particular category or to promote the purchase of particular prescription drugs;
  5. patient compliance, therapeutic intervention or generic substitution programs;
  6. disease management;
  7. review of drug use or prior authorization;
  8. arbitration of appeals or grievances related to prescription drug coverage;
  9. contractualization with the pharmacies of the network; and
  10. control the cost of covered prescription drugs.

Registered Pharmacy Benefit Managers must file a detailed report to DFS by July 1, 2022, which provides the information requested by the Superintendent, including, without limitation, “(i) any price discounts, discounts of any kind, inflationary payments, credits, recoveries, fees, subsidies, chargebacks, reimbursements, other financial or other reimbursements, incentives, incentives, reimbursements or other benefits received by the manager of pharmaceutical benefits; and (ii) the terms and conditions of any contract or arrangement, including other financial inducements or reimbursements, inducements or reimbursements between the Pharmacy Benefit Manager and any other party relating to the pharmacy benefit management services provided to a health care plan or provider, including, but not limited to, prescription charges paid to pharmacies. “

The information in the requested report will not be subject to public disclosure under the freedom of information provisions of the State Public Officials Act, but failure to submit a timely report may result in a penalty of up to $ 1,000 for each day of default. Filers will also need to have compliant cybersecurity plans that meet detailed requirements of 11 NYCRR Part 500, including filing annual certifications of compliance with DFS by April 15, 2022.

All registrations will expire on December 31, 2022. By January 1, 2023, Pharmacy Benefit Managers will need to be licensed by the DFS. After that date, any unlicensed entity would be subject to the same penalty as failure to register required in 2022. The law allows the DFS Superintendent to consult with the Health Commissioner to establish accreditation standards that can address treatment. unfair and deceptive claims, anti-competitive practices and conflicts of interest between a pharmaceutical benefit manager and a health plan or insurer. The new law allows the Superintendent to interview any registrant or licensee at any time he sees fit. Domain name registrants and licensees are required to pay reasonable and proportionate contributions to DFS to cover the costs of implementing the new Section 29.

Grounds for revocation or suspension of a registration or license include fraudulent requests or practices, incompetence, financial irresponsibility, intentional misrepresentation, unfair business practices and fraud, violation of regulatory standards specified as well as disciplinary action in other states. Due process provisions for notices, hearings, evidence and appeals are provided.

In addition to imposing specific accounting obligations on pharmacy benefit managers in terms of the amounts they receive from health plans and insurers, the new law also amends section 280-A of the Public Health Act to require that they act with skill, care, professionalism, diligence and in the best interests of the plan or the health care provider. Section 280-A explicitly prohibits a drug benefit manager from substituting for another drug that has been prescribed without the consent of the prescriber or as required by law.


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