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City & State: The fight to regulate pharmacy benefit managers

Democratic lawmakers in both houses of the state Legislature passed legislation last year that would regulate pharmacy benefit managers in New York for the first time. Independent pharmaciescheered. Insurers and manufacturers – who own some PBMs – not so much. Huge sums were at stake, and Gov. Andrew Cuomo ended up vetoing the bill last December. But the governor left the door open for lawmakers to send a new bill this year if it addressed five concerns he had in the original legislation. That could happen in the coming months, according to Assembly Health Committee Chairman Richard Gottfried, who sponsored the original bill.

NY County Politics: Gottfried Denounces Cuomo for Vetoing PBM Oversight Bill

December 30, 2019

Assemblymember Richard Gottfried (D-Chelsea, Midtown) released a statement criticizing Governor Andrew Cuomo (D) for vetoing his bill to increase oversight of pharmacy benefit managers (PBMs).

A PBM is a third-party company that manages prescription drug benefits for commercial and federal health plants. In the past few years, PBMs have become notorious among pharmacy customers for their lack of transparency. Some have been accused of engaging in “spread pricing”, a practice that has them profit on the difference between what they charge health plans and how they reimburse pharmacies.

Gottfried’s bill would have addressed these practices and mandated increased financial transparency.

“”The PBM industry spent a lot of money lobbying against this consumer protection bill,” said Gottfried. “PBMs are widely recognized as major players in driving up drug costs and profiteering at the expense of people who pay health insurance premiums, patients, and pharmacists.  They’re a black box, operating in secret with no effective regulation.”

Joint Press Release: Gov. Cuomo Vetoes Bill to Regulate Pharmacy Benefit Managers and Protect Consumers

Bill would have added accountability, increased fiscal disclosure, and addressed deceptive and anti-competitive practices

(December 26, 2019) Governor Cuomo this evening vetoed legislation to increase oversight, transparency, and accountability of pharmacy benefit managers (PBMs).  PBMs are companies that manage prescription drug benefits for health plans.  Their negotiations, discounts, and rebate structures are highly secretive and PBMs have been accused of practices including profiteering by overcharging health plans more than they subsequently reimburse pharmacists and pocketing the difference, a practice known as “spread pricing.”

In response to these and other concerns, New York’s 2019 State budget included language eliminating spread pricing and implementing other regulations on PBMs that work with Medicaid.  This bill would have applied similar rules to private health plans.

“The PBM industry spent a lot of money lobbying against this consumer protection bill,” said Assembly Health Committee Chair and bill sponsor Richard N. Gottfried.  “PBMs are widely recognized as major players in driving up drug costs and profiteering at the expense of people who pay health insurance premiums, patients, and pharmacists.  They’re a black box, operating in secret with no effective regulation.  There is plenty of evidence, including an analysis by the State Senate, showing what happens when regulators can’t see into this growing segment of the health care economy.  This veto means higher drug prices, higher costs for health plans and the people who pay their premiums, and lost income for pharmacies.”

“New York was on the cusp of becoming the leading state in protecting consumers, bringing questionable practices to light and saving millions of dollars with the bold proposal by Assemblyman Richard Gottfried and Senator Neil Breslin to finally join over two thirds of the states in regulating pharmacy benefit management companies,” said Assembly Insurance Committee Chair and bill co-sponsor Kevin Cahill.  Instead, with the stroke of his veto pen, Governor Andrew Cuomo leaves New Yorkers unprotected and these shadowy corporate behemoths free to plunder the sick, over-burdened health insurance public.”

“In this past budget, the Governor supported some protections for the Medicaid program in its dealing with PBMs,” added Gottfried.  “But he now insists that the only way he would’ve signed this bill is if we agreed to gut the bill by taking out key consumer protections, including those that parallel what we did for Medicaid.   The Governor even wanted us to take out a requirement that PBMs operate ‘with care, skill, prudence, diligence, and professionalism, and for the best interests’ of the consumer and health plans. It is incomprehensible to me.  I will be re-introducing the bill shortly and resuming the fight to get it passed and signed.”

Cahill added:  “While we remain only one of about a dozen states without any regulation of this shadow industry and with no adequate recourse for their secretive decisions, impacting millions of patients and professionals and costing millions of dollars, there is a consolation here in that we stood up to the governor’s bald attempt to substitute a fake regulatory schema that protects PBMs instead of consumers.” 

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NY Post: Cuomo, Trump admin. agree on importing prescription drugs from Canada

By Bernadette Hogan, December 18, 2019

Gov. Andrew Cuomo and the Trump administration are finally on the same page, simultaneously opening the door to the importation of prescription drugs from Canada Wednesday as a solution to lowering the costs of treatment to Americans.

Cuomo plans on creating a new commission to study the process of legally and safely importing drugs from the Canadian market as part of his 2020 State of the State proposal.

A final report would be submitted to the US Department of Health and Human Services for final consideration.

“The exorbitant cost of prescription drugs is a massive burden on families across the country, and we’re determined to use every tool in the tool box and pursue every available avenue to bring real relief to New Yorkers,” Cuomo said Wednesday.

Meanwhile, the US Food and Drug Administration published drafted rules that, if given the OK, would permit certain drugs to be imported from Canada.

The agency also issued a new draft guidance governing importation procedures for drug manufacturers “including biological products, that are FDA-approved, manufactured abroad, authorized for sale in any foreign country, and originally intended for sale in that foreign country.”

President Trump made tackling the rising costs of drug prices a pillar issue during 2016 election campaign, but his administration has yet to gain approval from federal regulators.

2003 law would allow Canadian prescription drug imports, should the secretary of the Department of Health and Human Services be able to prove costs would be lowered at no compromise to the American public’s health and safety. But so far no HHS chief has signed off.

In New York, Cuomo’s plan also includes capping monthly insulin co-payments at $100, and grants the state Department of Financial Services the power to investigate drug companies when their product prices spike.

DFS would be allowed to hold hearings “to demand that manufacturers justify the increase,” and if the company is found to impose “unjustifiable” increases, they could face fines.

The plan would need legislative approval from both the state Senate and Assembly.

“The federal government makes it difficult to run an importation program, but it’s not out of the question. We get all sorts of food and other materials from Canada and they’re no less safe for human consumption than when we import them from California or Florida,” said Assemblyman Dick Gottfried (D-Manhattan), chair of the Assembly Health Committee.

He also sponsors a bill that would pave the way for Canadian drug imports.

“I don’t understand why the governor feels there is a commission needed … but it’s good that he’s thinking in the right direction” said Gottfried.

Gottfried also has a bill that would pave the way for Canadian drug imports. “It is nutty that Americans have to contemplate importing drugs from Canada in order to take advantage of reasonable prices,” he said.

Consumer advocacy groups like the AARP, a nonprofit that lobbies on issues impacting the elderly, have been clamoring for consumer fiscal relief, noting that “skyrocketing” medication costs often deter patients from refilling prescriptions, risking negative health effects.

“The cost of prescription drug treatment grew more than five times the average New Yorker’s income from 2012 to 2017, as the price for key drugs that nearly 4 million New Yorkers rely on to treat cancer, diabetes and heart disease all rose by 62% to 96%,” said AARP NYS director Beth Finkel.

“The result: one in five adult New Yorkers stopped taking prescribed medications, mainly due to cost,” she added.

The Medical Society of the State of New York also supports the governor’s proposal.

“Patients in need of life-saving and health-maintaining medications, including insulin, must be able to receive them in a timely manner,” said Art Fougner, MD, MSSNY president.

“We must continue to examine ways to ensure our patients are truly able to obtain the medications they need to lead a healthy life, including preventing inappropriate PBM or health insurer interference with patients receiving these needed medications.”

Press Release: Assembly Passes Gottfried Bill to Help Seniors Coordinate Prescriptions

Today the Assembly passed A. 2785, a bill I sponsored that would allow pharmacists to synchronize the dispensing of prescriptions for Medicaid patients so that patients can pick up multiple refills at the same time.

Crain’s: Assembly and Senate propose restoration of Medicaid funding

The Assembly and state Senate on Tuesday released details of their budget proposals, restoring $550 million in Medicaid funding that Gov. Andrew Cuomo had stripped from his spending plan after a downward revision in expected tax revenue.

Fortune: The Justice Department Approved the CVS-Aetna Merger, But It’s Still Not a Done Deal. Here’s Why

Bloomberg News, October 19

New York state officials are considering blocking parts of the $68 billion mergerof drugstore store chain CVS Health Corp. and Aetna Inc., jeopardizing billions of dollars in insurance premiums for Aetna.

CVS (CVS, +0.38%) and Aetna won approval from the U.S. Justice Department on Oct. 10, contingent on Aetna (AET, +0.00%) divesting its Medicare Part D business, which covers prescription drugs for seniors. But the deal still needs to pass through state regulatory bodies.

At a public hearing in Manhattan on Thursday, Maria Vullo, superintendent of the state Department of Financial Services, said her agency might block CVS’s merger with Aetna’s New York unit. She called U.S. approval of the overall deal “myopic” and repeatedly asked CVS and Aetna representatives for written evidence that they would deliver on promises to lower prices.

Several groups, including the Pharmacists Society of the State of New York and the Medical Society of the State of New York, urged the state to block the deal. They said the merger would limit competition and drive up the cost of prescription drugs. Assemblyman Richard Gottfried, chairman of the Health Committee, said the deal introduces “dangerous trends” in consumer access.

Elizabeth Ferguson, deputy general counsel for CVS, said there wasn’t a plan to lower prices.

CVS and Aetna announced the deal in December 2017 but continue to face regulatory hurdles. Connecticut approved the deal Oct. 17, and the New York will reach a decision after Oct. 25.

Shares of CVS and Aetna were little changed in New York Thursday.

Public Hearing – Opioid Overdose Reversal Drugs


SUBJECT:  Opioid overdose reversal drugs: assessing and improving access to and availability of drugs to prevent opioid overdose deaths.

PURPOSE:  The purpose of this hearing is to examine access to and availability of opioid overdose reversal drugs, such as naloxone, and to identify, if necessary, means by which to expand access and availability statewide.

New York City
Thursday, May 17
11:00 A.M.
Assembly Hearing Room
19th Floor
250 Broadway

Opioid antagonists, such as naloxone, are potentially life-saving prescription medications used to reverse overdoses caused by heroin and opioids. New York State has made progress expanding access to naloxone and similar drugs. In 2006, New York State passed a law authorizing non-medical personnel to administer naloxone to individuals who seek it. A 2014 law expanded this to allow the prescribing, dispensing, and distribution of opioid antagonists by a non-patient specific order. In addition, many first responders now receive training to administer naloxone.

Times-Union: N.Y. lawmakers question health officials on drug prices, executive power, spending

By Claire Hughes, 2/16/17

Drug price controls, the adequacy of Medicaid payments and expanding the power of the Health Department were among the topics discussed at a legislative hearing Thursday on Gov. Andrew Cuomo’s proposed budget for health and Medicaid.

An underlying theme was uncertainty about what action President Donald Trump and a Republican-led Congress might take on the Affordable Care Act, which could affect health insurance subsidies for New Yorkers, and funding for women’s reproductive health clinics, including Planned Parenthood.

 “Much is happening in Washington,” state Health Commissioner Howard Zucker told lawmakers. “If the ACA were repealed, that would be a major concern, with millions of people potentially losing health care.”

Buffalo News – Cuomo proposes prescription drug price controls

By Tom Precious, 1/11/17

ALBANY – The state will establish a new cost-control system to stop some “unconscionable” drug companies from gouging consumers with high prescription drug prices, Gov. Andrew M. Cuomo said Wednesday.

In his sixth — and final — State of the State address, Cuomo said he will propose in his upcoming budget the creation of a state review board to establish a “fair price” that New York will pay for individual prescription drugs in its Medicaid program.

That price would then also apply to sales in the private marketplace.