Gov. Kathy Hochul has signed a series of new laws aimed at reducing the cost of prescription drugs and helping struggling, independently-owned pharmacies, but vetoed a third that supporters argue would reduce costs for the state's Medicaid program.
Three bills known as the Pharmacy Rescue Package received near unanimous bi-partisan approval in the state legislature. They aim to lower the cost of prescription drugs by regulating so-called pharmacy benefit managers.
PBMs, as they’re known, are essentially the middlemen between the pharmacies dispensing prescriptions and health insurance companies paying the bill.
"We don’t even know what the price they get the drug for is or what the profit margin is," said Franklin County Assemblymember Billy Jones.
Lawmakers like Jones say PBMs artificially increase the cost of prescriptions at the expense of both consumers and the independent pharmacies that service them.
Jones said the problem is particularly acute in rural North Country communities that rely on small independent pharmacists.
"People trust them. We want to keep them vibrant and in the community," he said. "In the past couple of years, we’ve seen a lot of pharmacies close down. And it’s just leveling the playing field basically."
Small pharmacies in New York were supportive of the new laws, which aim to increase price transparency and consumer choice. The industry blames PBMs for pharmacy closures, saying they’re sometimes force them to sell prescriptions at a financial loss.
A January 2019 survey of more than 500 independent pharmacies in the New York City area found that 99% were worried about the impact of PBMs on their business.
Hochul signed two of the three PBM regulation bills into law. She vetoed a third that supporters said would have lowered costs for the state’s Medicaid program and the patients it covers. At more than $80 billion per year, Medicaid makes up roughly 38% of the total New York budget.
