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Legislative Memo

Lev Ginsburg
Director of Government Afairs
T 518.465.7511 x207
www.bcnys.org

BILL:

S.121-A (Sampson) / A.2007-B (Gottfried)

Support

SUBJECT:

Establishes a prescription drug discount program

 

DATE:

June 15, 2009

 

The Business Council of New York State opposes this bill, which would establish a new prescription drug assistance program for state residents regardless of age with a household income of no more than 350 percent of the federal poverty level or for residents whose household income meets the thresholds set forth in Section 242(1) of the Elder Law and are not Medicaid eligible.

Chapter 58 of the Laws of 2008 created a means-tested prescription drug discount program available to any resident between the ages of 50 and 64 or for residents who meet the disability criteria found in 20 CFR 404. This program became available to eligible New Yorkers April 1, 2009, with more than 2,500 pharmacies statewide participating. The proposed legislation proposes to expand this new program even before its impact is known and the effectiveness of the model being used to enroll participants is validated.

The proposed legislation seeks to underwrite the program expansion and the cost of the prescription drugs through revenues generated as a result of supplier rebates. It is unclear that this proposed methodology is consistent with Centers for Medicare & Medicaid Services' guidance and that the program would be approved as a "state prescription drug assistance program" which would enable it to negotiate rebates which are exempt from the "best price" rule.

It is also important to note that the pharmaceutical industry has extensive private prescription assistance programs that in some cases are even more comprehensive than the state programs - and do not require taxpayer funds to support. The Partnership for Prescription Assistance, sponsored by US pharmaceutical research companies, provides a single point of access to more than 475 public and private patient assistance programs that provide assistance with more than 2,500 brand-name medicines including a wide range of generics. The Together Rx Access Card helps Americans and their families gain access to immediate and meaningful savings on more than 300 brand-name prescription products, including generics, at their neighborhood pharmacy. This program's enhanced income thresholds far exceeds that set for in this legislation and ensures nearly 90 percent of uninsured Americans are eligible for the free Together Rx Access program.

The Business Council believes that while this legislation may be well intended, it does not contain appropriate safeguards to ensure that there will not be substantial state General Fund contributions to pay for this expansion of a brand new program and that it may not be crafted in such a manner to be consistent with federal rules and regulations. Rather, The Business Council believes it would be more prudent to allow the New York Prescription Saver Card to be operational for at least one year so that its effectiveness may be evaluated and any reforms and/or enhancements could be negotiated as part of any overall health care budget discussions.

For these reasons, The Business Council opposes passage of S. 121-A/A. 2007-B.