New York expanded its existing efforts at monitoring and understanding prescription drug prices by enacting legislation addressing prescription drug price transparency. Effective June 19, 2024, S.599-A/A.1707 amends the New York Insurance Law to require prescription drug manufacturers to report certain price increases before they occur.
Under this legislation, manufacturers must report any price increases (but not new market entrants over a certain benchmark price) of more than 16% for drugs with a wholesale acquisition cost (WAC) of more than $40 for a course of therapy. To determine if a price increase will meet the reporting threshold, manufacturers must take into consideration any proposed increases or cumulative increases that occurred within the previous 24 months prior to the planned effective date of the increase.
For purposes of this notification requirement, a course of therapy is defined as either
This reporting requirement applies to manufacturers of prescription drugs that are purchased or reimbursed in New York by any of the following:
All required notices must be provided to the superintendent of financial services in writing at least 60 days prior to the planned effective date of the increase. A manufacturer’s notice must include the proposed price increase and any cumulative increases that have occurred in the previous 24 months.
Within five days of receipt of the manufacturer’s notice, the superintendent must publish a notice on the New York Department of Financial Services’ website that includes the following:
Manufacturers are permitted to reasonably designate certain information required in the notice as confidential or trade secret. Such confidential or trade secret information contained in the notice is then exempt from copying or disclosure; however, the superintendent may still disclose certain aggregated prescription drug price information so long as the disclosure cannot be used directly or indirectly to identify trade secrets related to a specific manufacturer or prescription drug, including but not limited to any information related to pricing for the prescription drug.
It should be noted that applicable manufacturers that fail to make a required report under this legislation may, after notice and hearing, be subject to civil penalties of up to five thousand dollars per day for each day the required information is not reported.
As noted in prior LawFlashes, many states have now enacted their own prescription drug price transparency measures—see our previous legislative updates for details on additional transparency enactments in 2023, including legislation in Connecticut, New Jersey, and Florida and Minnesota.
In states with more longstanding reporting requirements, such as Oregon, which has been collecting transparency data for over five years, consumers and legislators can begin to track trends in the prescription drug market.
However, as reflected in Oregon’s 2023 Drug Price Transparency Program Annual Report, even states with established programs continue to face challenges with the quality of information submitted pursuant to their programs, interpreting the data that they do receive, implementing measures that provide transparency into the price of a drug across the entire pharmaceutical distribution chain, or otherwise interpreting and using the data in a meaningful way.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following: