In 2022, New York (NY) enacted one of the most comprehensive Pharmacy Benefit Manager (PBM) laws in the country. The proposed regulations were supported widely by pharmacists but broadly opposed by insurers, employers, and unions claiming the measures would drive up healthcare costs. At the end of October 2023, and for reasons not articulated, major portions of the comprehensive proposed rules were withdrawn by the NY Department of Financial Services.
Specifically withdrawn are provisions requiring National Average Drug Acquisition Cost (NADAC) plus a $10.18 dispensing fee, restrictions on preferential use of PBM-owned mail and specialty pharmacies, oversight rules for contracts and freezing of plan formularies during the plan year. The withdrawn proposed regulation was replaced by a final regulation focused almost entirely on PBM licensing. Pursuant to Insurance Law §§ 2905 and 2906, PBMs will be required to pay a licensing fee of approximately $24,000 by January 1, 2024, to be permitted to operate in NY. Some recordkeeping requirements such as submission of financial documentation, organizational and ownership structure, were retained.
While NY joins other states that have taken some action against PBMs (all 50 states have enacted legislation to date), it has failed to implement needed PBM oversight rules. It remains to be seen if the 2024 NY legislature will revisit PBM reform. Pharmacists may still file verified complaints with the Pharmacy Benefits Bureau, established in May 2022, which remains intact to hear complaints against PBMs.
How Can Frier Levitt Help
Frier Levitt represents pharmacies facing a myriad of PBM-related issues, including audits, network termination, complaints referred to state boards of pharmacy and other agencies. Our PBM Practice Group offers proactive and strategic legal representation based on extensive experience in pharmacy audits. Contact us if you are faced with a PBM issue.
