By Hank Russell
As Governor Kathy Hochul has talked about affordability and accused President Donald Trump of jacking up healthcare costs, lawmakers in Albany pushed through a bill that a think tank said would raise the prices of prescription drugs.
According to the Empire Center for Public Policy, the Patient Access to Pharmacy Act, sponsored by Assemblyman John T. McDonald III (D-Albany) and state Senator James Skoufis (D-Cornwall), would increase the dispensing fee of each prescription filled from $2 to $10.18 — an increase of approximately 400%. The bill passed the Senate by a 58-2 vote last year; on June 5, the Assembly unanimously approved the bill, 132-0. The legislation is currently awaiting Governor Kathy Hochul’s signature.
Local state Senate cosponsors included Siela Bynoe (D-Westbury), Jack Martins (R-Mineola) and Steven Rhoads (R-Levittown).
Last year, the Senate passed the bill, but the Assembly never brought it up for a vote until this year.
The Act would require the companies that process prescription drug claims on behalf of most health plans — known as pharmacy benefit managers (PBMs) — to pay pharmacies minimum prices for drugs, including the $10.18 dispensing fee.
In 2023, the state Department of Financial Services introduced a similar proposal, but the agency withdrew the proposal after getting pushback from consumers, insurers and labor unions. The United Federation of Teachers said such an increase in dispensing fees “will irreparably harm – and likely bankrupt – union benefit funds.”
“In response to that opposition, the bill’s sponsors amended the bill to exempt the ‘collectively bargained’ health plans covering union members. It also does not apply to Medicare or the ‘self-insured’ health plans offered by most large employers, which are exempt from state regulation by federal law,” said Bill Hammond, the Empire Center’s senior fellow for health policy.
In an op-ed written in last year’s The Empire Report. McDonald — who is a pharmacist himself — said PBMs “have control over pharmacies” and although that “aren’t doctors, pharmacists, or medical experts,” they “have an outsized say in patient care through their ability to decide what medications are covered by insurance.”
McDonald said PBMs’ reimbursements are “predatory,” costing pharmacies up to $100 for each name-brand prescription they fill. “Left unchecked, [PBMs] will create pharmacy deserts throughout New York and force our sick and aging neighbors to travel distances and wait in long lines to receive necessary care,” McDonald wrote. “All this bill asks for is greater transparency and fairness.”
But Hammond noted that “New York’s pharmacy industry is relatively robust,” citing data from the National Community Pharmacists Association, which has the second-most pharmacies per capita (behind West Virginia) and the second-highest share of pharmacies being independently owned (next to North Dakota).
The Empire Center also cited estimates from the Pharmaceutical Care Management Association, an organization representing PBMs, which said it would cost an additional $570 million per year to drug costs for health plans, employers and consumers.
“As a result, the bill primarily targets the health plans purchased from insurance companies by small and medium-sized employers — where it will add to premium costs that are already among the highest in the U.S.,” Hammond said.