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New York regulators want to make pharmacy benefit managers treat small pharmacies the same way they treat large drugstore chains and their own pharmacy affiliates.
The state's Department of Financial Services today adopted market conduct regulations that will impose detailed rules on how PBMs work with small pharmacies.
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One new rule could help employer health plan members who like getting prescriptions delivered to their homes: PBMs will have to eliminate any pharmacy network contraction provisions that prohibit some of the pharmacies from providing home delivery services or mail-order services.
PBMs will also have to apply the same audit rules to all in-network pharmacies, regardless of their size, and it will have to let small pharmacies use the same electronic communications services that big pharmacies and large drugstore chains use.
Another provision will prohibit a PBM from using "marketing, advertising or promotional activities" to encourage health plan members to use the PBM's own affiliated pharmacy, unless the affiliated pharmacy is the plan's only in-network pharmacy.
Transparency rules: Some of the other new market conduct regulations could make using a PBM's network easier.
A PBM will have to put all "formularies," or the lists of prescriptions drugs that plans cover, online, and they will also have to post the lists of pharmacies participating in each of its networks online.
Another transparency provision will require a plan to put a telephone number and an email address that patients can use on its website.
The New York PBM regulation framework: New York enacted its current PBM law in 2021.
Related: New York push to rein in drug costs tests ERISA's reach
The new set of market conduct regulations is the third the state has adopted in connection with implementing the new law.
New York also has hired about 25 people to help enforce the standards created by the 2021 PBM law.
Drugmakers and independent pharmacies have accused the PBMs of manipulating discount arrangements, such as the size of rebates off drug makers' full list drug prices, to increase their own revenue without doing enough to save employers and health plan members money.
The PBMs themselves contend that other system players are casting PBMs as the villains because of PBMs' success at holding down patients' costs and squeezing other players' revenue.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
