Pharma

New York State Senate passes prescription drug cost package

The legislation will require sign-off from the state Assembly and the governor’s office.
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New York State Senator Gustavo Rivera. Erik Mcgregor/Getty Images

· 3 min read

The New York State Senate passed a package of bills Tuesday aimed at addressing prescription drug costs, which shot up an average of more than 15% nationwide between 2022 and 2023. New York pays the third-highest percentage of prescription drug spend out of all 50 states.

The seven pieces of legislation, if signed into law, would make New York the second state after California to manufacture its own generic drugs with the goal of reducing costs and resolving drug shortages. The legislation also takes a number of other steps to bring down drug costs, including eliminating copays for insulin.

“No New Yorker should have to choose between paying for medication and affording housing, food, or other necessities. Yet expensive middlemen and intermediaries in the pharmaceutical supply chain can drive up prices without accountability,” State Sen. Zellnor Myrie of Brooklyn said in a statement. “Our legislation will increase transparency in the industry and give New Yorkers more opportunities to afford the drugs they need.”

What’s in the package

Introduced by Sen. Gustavo Rivera, one bill (S4786A) would allow the New York State Department of Health to pursue its own manufacturing of high-cost drugs or those that are at risk of going into shortage. California took a similar step in 2020, and estimated the move would cost the state $1–$2 million in addition to “ongoing staff costs.”

One bill Myrie introduced would create the Prescription Drug Supply Chain Transparency Act (S6738A), which would require “pharmacy services administrative organizations, pharmacy switch companies, and rebate aggregators to register” with the state Department of Financial Services and disclose certain financial information, such as “deposits into the pharmacy benefit manager regulatory fund,” according to the legislative language.

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Another bill looks further up the supply chain. Introduced by State Sen. James Skoufis, who represents swaths of the Hudson Valley, the legislation (S604) would establish a program for the state to import wholesale medications that are cheaper abroad than in the domestic market. The program would abide by all state and federal drug standards and aim to offer less costly options to New Yorkers, according to the bill’s language.

State Sen. Neil Breslin, who represents parts of Albany, Schenectady, and Montgomery counties, introduced a bill (S1267) that would require utilization review agents to confirm whether a healthcare professional had tried a certain drug that failed during the patient’s treatment before resorting to step therapy, a process in which insurers insist a patient try a less expensive drug before “stepping up” to a pricier option.

Other bills aim to touch on so-called pay-for-delay deals made between brand-name and generic drugmakers that delay cheaper generics from hitting the market, eliminate deductibles and copays for insulin, and expand prescription insurance coverage to patients on health plans similar to Medicare Part D.

Rivera’s office didn’t immediately provide a cost analysis for the package of bills.

What’s next

The legislative package will reach the New York State Assembly, where it’ll go through the same process before heading to Gov. Kathy Hochul’s desk. A spokesperson for the Assembly didn’t immediately return a request for comment.

“The governor will review legislation if it passes in both houses of the Legislature,” Hochul spokesperson Justin Henry wrote in an email.

Navigate the healthcare industry

Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.