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Legislative Memo

Lev Ginsburg
Director of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

S.3346-A(Hannon) / A.676-B (Rosenthal)

Support

SUBJECT:

Mandating a pharmacy benefit manager contract appeals process.

 

DATE:

May 8, 2015

 

The Business Council opposes S.3346-A (Hannon) / A.676-B (Rosenthal) which mandates pharmacy benefit managers (PBMs) to create a contractual appeals process for contracted pharmacies. This legislative attempt to further narrow the private right to contract would likely lead to higher drug prices and result in higher health insurance premiums for consumers and employers alike.

PBMs have developed and successfully implemented programs such as drug utilization review, formulary management and disease and health management which encourage the appropriate, safe and effective use of prescription drugs to improve patient outcomes and control costs. The ability to use leverage for volume discounts and utilize contractual tools to manage prescription drug benefits is essential to allowing PBMs to continue to assure that pharmaceutical benefits are affordable for premium payers.

While the current bill is a significant improvement over earlier versions, we believe that mandating such appeals ultimately limits a PBM's ability to negotiate discounts with pharmacies thus decreasing flexibility in cost management.  In the end the increased costs will be borne by New York’s employers.

For these reasons, The Business Council opposes S.3346-A (Hannon) / A.676-B (Rosenthal).