On September 27, 2024, New York Governor Kathy Hochul signed into law an amendment to the New York Public Health Law that prohibits pharmacy benefit managers (“PBMs”) from penalizing New York pharmacies for providing customers with information relating to the costs of prescription medications and reimbursement rates. Specifically, the new law states as follows:
“Contract provisions. No pharmacy benefit manager shall, with respect to contracts between such pharmacy benefit manager and a pharmacy or, alternatively, such pharmacy benefit manager and a pharmacy's contracting agent, such as a pharmacy services administrative organization: (a) prohibit or penalize a pharmacist or pharmacy from disclosing to an individual purchasing a prescription medication or service information regarding: (i) the cost of the prescription medication or service to the individual, or the cost of the prescription medication or service to the pharmacy and the pharmacy's reimbursement for that prescription medication or service.” [The new language is underlined and in bold].
As detailed in the legislative history, “The reasoning for this change is that, under current law, pharmacists cannot tell a patient that a particular drug or service will result in a negative reimbursement for a pharmacy, despite the fact that such reimbursement is likely the reason that the pharmacist is not able to stock the patient's medication. This leads to a patient access problem for customers who are left none the wiser about why they can't procure a needed medication …To ensure pharmacies, particularly small and independent pharmacies, can continue to operate, it is imperative that greater transparency measures are in place. This legislation would further protect pharmacies from penalties imposed by PBMs for discussing prescription drug costs to the pharmacy and their reimbursement rates.”
This new law took effect immediately on September 27, 2024 when the law was signed.
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This Legal Briefing is intended for general informational and educational purposes only and should not be considered legal advice or counsel. The substance of this Legal Briefing is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business. © 2024 Law Offices of Pullano & Farrow PLLC
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