N.Y. Insurance Law § 2906: Licensing of a pharmacy benefit manager

§ 2906. Licensing of a pharmacy benefit manager. (a) The

superintendent may issue a pharmacy benefit manager's license to any

person, firm, association or corporation who or that has complied with

the requirements of this article, including regulations promulgated by

the superintendent. The superintendent, in consultation with the

commissioner of health, shall establish, by regulation, minimum

standards for the issuance of a license to a pharmacy benefit manager.

(b) The minimum standards established under this subsection shall

contain both prerequisites for the issuance of a license and

requirements for maintenance of a license and shall address, without

limitation:

(1) conflicts of interest between pharmacy benefit managers and health

plans or insurers;

(2) deceptive practices in connection with the performance of pharmacy

benefit management services;

(3) anti-competitive practices in connection with the performance of

pharmacy benefit management services;

(4) unfair claims practices in connection with the performance of

pharmacy benefit management services;

(5) pricing models used by pharmacy benefit managers both for their

services and for the payment of services to the pharmacy benefit

manager;

(6) standards and practices used in the creation of pharmacy networks

and contracting with network pharmacies and other providers, including

promotion and use of independent and community pharmacies and patient

access and minimizing excessive concentration and vertical integration

of markets; and

(7) protection of consumers.

(c) For each business entity, the officer or officers and director or

directors named in the application shall be designated responsible for

the business entity's compliance with the insurance laws, rules and

regulations of this state.

(d)(1) Before a pharmacy benefit manager's license shall be issued or

renewed, the prospective licensee shall properly file in the office of

the superintendent an application therefor in such form or forms and

supplements thereto as the superintendent prescribes, and pay a fee of

eight thousand dollars for each year or fraction of a year in which a

license shall be valid.

(2) Every pharmacy benefit manager's license shall expire thirty-six

months after the date of issue. Every license issued pursuant to this

section may be renewed for the ensuing period of thirty-six months upon

the filing of an application in conformity with this subsection.

(e) If an application for a renewal license shall have been filed with

the superintendent at least two months before its expiration, then the

license sought to be renewed shall continue in full force and effect

either until the issuance by the superintendent of the renewal license

applied for or until five days after the superintendent shall have

refused to issue such renewal license and given notice of such refusal

to the applicant.

(f) The superintendent may refuse to issue a pharmacy benefit

manager's license if, in the superintendent's judgment, the applicant or

any member, principal, officer or director of the applicant, is not

trustworthy and competent to act as or in connection with a pharmacy

benefit manager, or that any of the foregoing has given cause for

revocation or suspension of such license, or has failed to comply with

any prerequisite for the issuance of such license.

(g) Licensees and applicants for a license under this section shall be

subject to examination by the superintendent as often as the

superintendent may deem it expedient. The superintendent may promulgate

regulations establishing methods and procedures for facilitating and

verifying compliance with the requirements of this section and such

other regulations as necessary.

(h) The superintendent may issue a replacement for a currently

in-force license that has been lost or destroyed. Before the replacement

license shall be issued, there shall be on file in the office of the

superintendent a written application for the replacement license,

affirming under penalty of perjury that the original license has been

lost or destroyed, together with a fee of eight hundred dollars.

(i) No pharmacy benefit manager shall engage in any practice or action

that a health plan is prohibited from engaging in pursuant to this

chapter.