Ensures reimbursement practices of pharmacy benefit managers do not allow for reimbursement of an amount less than the cost of procuring the drugs.
Summary
S05719 would amend New York’s Public Health Law to change how pharmacy benefit managers (PBMs) set reimbursement for prescription drugs. The bill focuses on situations where a pharmacy challenges a maximum allowable cost or similar pricing benchmark. If the appeal is denied, the PBM would have to identify a therapeutically equivalent drug’s national drug code that is actually available to pharmacies in New York at or below the challenged reimbursement level. If that drug is not available at that price from the pharmacy’s wholesaler, the PBM would have to raise the reimbursement benchmark above the pharmacy’s acquisition cost and allow the pharmacy to reverse and rebill affected claims.
The bill also adds a broader reimbursement rule prohibiting PBMs from paying a pharmacy less than they pay a PBM affiliate for the same pharmacist services. That payment comparison must be made on a per-unit basis using the same generic product or generic code number. The measure is intended to address pricing practices that can leave independent pharmacies reimbursed below their drug acquisition costs or below affiliated entities performing the same work.
Impact
If enacted, the bill would directly regulate PBM reimbursement practices in New York by imposing a floor tied to pharmacy acquisition cost and by requiring parity between payments to unaffiliated pharmacies and PBM affiliates. It would affect PBMs, pharmacies, pharmacists, wholesalers, and potentially insurers or plan sponsors that rely on PBM-administered drug pricing. The bill would amend the Public Health Law and take effect 90 days after becoming law.
Sentiment
The available context suggests the bill is framed as a consumer- and pharmacy-protection measure, with a focus on fairness and preventing below-cost reimbursement. Because there are no recorded committee transcripts or votes in the provided material, there is no documented public debate or formal legislative sentiment to assess beyond the bill’s stated purpose and title. The overall tone of the proposal is corrective and pro-pharmacy.
Contention
The main likely point of contention is the bill’s restriction on PBM pricing discretion, especially the requirement to raise reimbursement when a pharmacy cannot procure a drug at or below the challenged benchmark. PBMs and plan administrators may view this as increasing costs and limiting their ability to manage drug spending, while pharmacies—particularly independent pharmacies—would likely support it as protection against under-reimbursement. Another possible dispute is the affiliate-parity provision, which could be seen as targeting spread pricing, preferred network arrangements, or internal PBM pricing structures.
Same As
Ensures reimbursement practices of pharmacy benefit managers do not allow for reimbursement of an amount less than the cost of procuring the drugs.
Amends provisions governing reimbursement practices of pharmacy benefit managers to ensure that pharmacies are not reimbursed an amount less than the cost of procuring the drugs.
Amends provisions governing reimbursement practices of pharmacy benefit managers to ensure that pharmacies are not reimbursed an amount less than the cost of procuring the drugs.