Health Policy Check Up News

New York State Senate Releases Final Investigative Report on PBMs In New York

New York State Senator James Skoufis, Chair of the Senate Committee on Investigations & Government Operations, in coordination with Senator Gustavo Rivera, Chair of the Senate Committee on Health, has released the Final Investigative Report: Pharmacy Benefit Managers in New York. The report comes after the Committee opened an investigation into the practices of Pharmacy Benefit Managers (PBMs) in New York State in January 2019.

Some key findings of the report include:

•  One of the key mechanisms by which PBMs generate revenue is through spread pricing
•  The lack of transparency and oversight of PBMs has created an environment in which PBMs are able to engage in self-dealing to the detriment of consumers across New York State
•  New York State must take immediate action to regulate the practices of spread pricing, MAC appeals, mail order operations, and reimbursements
•  The New York State Comptroller should perform a full audit of all dollars paid to PBMs via spread pricing

Legislative recommendations provided by the report include:

•  Regulate the practices of spread pricing in all pharmacy benefit contracts
•  Enhance the transparency of MAC appeals
•  Require the licensing and registration of PBMs to enhance accountability and oversight by instituting a fiduciary duty for their clients
•  Prohibit PBMs from mandating that patients use specialty and mail order pharmacies
•  Providing for the adequate and transparent reimbursements for pharmacies
•  Require PBMs to pass-through all discounts or rebates received from drug manufacturers to its Medicaid managed care clients

This is definitely not the last time New York, or any other state, will develop policies to help regulate abusive PBM practices. Frier Levitt Government Affairs (FLGA) is constantly monitoring new state PBM policies and working with pharmacy stakeholders nationwide to have their voices heard.  Contact FLGA today to learn more about getting involved.