A proposal moving through the final days of New York’s legislative session could significantly increase the amount pharmacies are paid to fill prescriptions, a change supporters say would protect local pharmacies but critics warn could drive up health insurance costs.
The legislation would require pharmacy benefit managers, known as PBMs, to pay pharmacies minimum reimbursement rates that include a dispensing fee of $10.18 per prescription. According to estimates cited by the Empire Center, the mandate would raise dispensing fees by roughly 400% from the current average of about $2 per prescription and could add approximately $570 million annually in costs for health plans, employers and consumers.
Sponsored by Assemblyman John McDonald and Sen. James Skoufis, the Patient Access to Pharmacy Act passed the Senate last week by a 58-2 vote and advanced through key Assembly committees on Thursday, positioning it for possible final approval before lawmakers adjourn for the summer.
The measure would primarily affect health plans purchased through insurance companies by small and medium-sized employers. Union-negotiated health plans were exempted through amendments to the bill, and most large self-insured employer plans would not be affected because they fall under federal regulation. Medicare and Medicaid would also largely remain unaffected, with Medicaid already paying a $10.18 dispensing fee.
Supporters argue the legislation is necessary because a small number of PBMs wield significant influence over prescription drug reimbursement rates and can leave pharmacies underpaid. Critics, however, contend the mandate would increase insurance premiums at a time when health care costs are already a concern for businesses and consumers.
Data cited in the report shows New York’s pharmacy sector remains relatively strong compared to other states. New York ranks among the nation’s leaders in pharmacies per capita, and nearly two-thirds of pharmacies in the state are independently owned. The number of independent pharmacies has also continued growing in New York even as such businesses have declined nationally.
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