N.Y. Public Health Law § 272: Preferred drug program

§ 272. Preferred drug program. 1. There is hereby established a

preferred drug program to promote access to the most effective

prescription drugs while reducing the cost of prescription drugs for

persons in state public health plans.

2. When a prescriber prescribes a non-preferred drug, state public

health plan reimbursement shall be denied unless prior authorization is

obtained, unless no prior authorization is required under this article.

3. The commissioner shall establish performance standards for the

program that, at a minimum, ensure that the preferred drug program and

the clinical drug review program provide sufficient technical support

and timely responses to consumers, prescribers and pharmacists.

4. Notwithstanding any other provision of law to the contrary, no

preferred drug program or prior authorization requirement for

prescription drugs, except as created by this article, paragraph (a-1)

or (a-2) of subdivision four of section three hundred sixty-five-a of

the social services law, paragraph (g) of subdivision two of section

three hundred sixty-five-a of the social services law, subdivision one

of section two hundred forty-one of the elder law and shall apply to the

state public health plans.

5. The drug utilization review board shall consider and make

recommendations to the commissioner for the adoption of a preferred drug

program. (a) In developing the preferred drug program, the board shall,

without limitation: (i) identify therapeutic classes or drugs to be

included in the preferred drug program; (ii) identify preferred drugs in

each of the chosen therapeutic classes; (iii) evaluate the clinical

effectiveness and safety of drugs considering the latest peer-reviewed

research and may consider studies submitted to the federal food and drug

administration in connection with its drug approval system; (iv)

consider the potential impact on patient care and the potential fiscal

impact that may result from making such a therapeutic class subject to

prior authorization; and (v) consider the potential impact of the

preferred drug program on the health of special populations such as

children, the elderly, the chronically ill, persons with HIV/AIDS and

persons with mental health conditions.

(b) In developing the preferred drug program, the board may consider

preferred drug programs or evidence based research operated or conducted

by or for other state governments, the federal government, or

multi-state coalitions. Notwithstanding any inconsistent provision of

section one hundred twelve or article eleven of the state finance law or

section one hundred forty-two of the economic development law or any

other law, the department may enter into contractual agreements with the

Oregon Health and Science University Drug Effectiveness Review Project

to provide technical and clinical support to the board and the

department in researching and recommending drugs to be placed on the

preferred drug list.

(c) The board shall from time to time review all therapeutic classes

included in the preferred drug program, and may recommend that the

commissioner add or delete drugs or classes of drugs to or from the

preferred drug program, subject to this subdivision.

(d) The board shall establish procedures to promptly review

prescription drugs newly approved by the federal food and drug

administration.

6. The board shall recommend a procedure and criteria for the approval

of non-preferred drugs as part of the prior authorization process. In

developing these criteria, the board shall include consideration of the

following:

(a) the preferred drug has been tried by the patient and has failed to

produce the desired health outcomes;

(b) the patient has tried the preferred drug and has experienced

unacceptable side effects;

(c) the patient has been stabilized on a non-preferred drug and

transition to the preferred drug would be medically contraindicated; and

(d) other clinical indications for the use of the non-preferred drug,

which shall include consideration of the medical needs of special

populations, including children, the elderly, the chronically ill,

persons with mental health conditions, and persons affected by HIV/AIDS.

7. The commissioner shall provide thirty days public notice on the

department's website prior to any meeting of the board to develop

recommendations concerning the preferred drug program and any proposed

eliminations to the list of drugs reimbursable under subdivision four of

section three hundred sixty-five-a of the social services law. Such

notice regarding meetings of the board shall include a description of

the proposed therapeutic class to be reviewed, a listing of drug

products in the therapeutic class, and the proposals to be considered by

the board. The board shall allow interested parties a reasonable

opportunity to make an oral presentation to the board related to the

prior authorization of the therapeutic class to be reviewed. The board

shall consider any information provided by any interested party,

including, but not limited to, prescribers, dispensers, patients,

consumers and manufacturers of the drug in developing their

recommendations.

8. The commissioner shall provide notice of any recommendations

developed by the board regarding the preferred drug program or

elimination to the list of drugs reimbursable under subdivision four of

section three hundred sixty-five-a of the social services law, at least

five days before any final determination by the commissioner, by making

such information available on the department's website. Such public

notice may include: a summary of the deliberations of the board; a

summary of the positions of those making public comments at meetings of

the board; the response of the board to those comments, if any; and the

findings and recommendations of the board.

9. Within ten days of a final determination regarding the preferred

drug program or elimination to the list of drugs reimbursable under

subdivision four of section three hundred sixty-five-a of the social

services law, the commissioner shall provide public notice on the

department's website of such determinations, including: the nature of

the determination; and analysis of the impact of the commissioner's

determination on state public health plan populations and providers; and

the projected fiscal impact to the state public health plan programs of

the commissioner's determination.

10. The commissioner shall adopt a preferred drug program and

amendments after considering the recommendations from the board and any

comments received from prescribers, dispensers, patients, consumers and

manufacturers of the drug.

(a) The preferred drug list in any therapeutic class included in the

preferred drug program shall be developed based initially on an

evaluation of the clinical effectiveness, safety and patient outcomes,

followed by consideration of the cost-effectiveness of the drugs.

(b) In each therapeutic class included in the preferred drug program,

the board shall determine whether there is one drug which is

significantly more clinically effective and safe, and that drug shall be

included on the preferred drug list without consideration of cost. If,

among two or more drugs in a therapeutic class, the difference in

clinical effectiveness and safety is not clinically significant, then

cost effectiveness (including price and supplemental rebates) may also

be considered in determining which drug or drugs shall be included on

the preferred drug list.

(c) In addition to drugs selected under paragraph (b) of this

subdivision, any prescription drug in the therapeutic class, whose cost

to the state public health plans (including net price and supplemental

rebates) is equal to or less than the cost of another drug in the

therapeutic class that is on the preferred drug list under paragraph (b)

of this subdivision, may be selected to be on the preferred drug list,

based on clinical effectiveness, safety and cost-effectiveness.

(d) Notwithstanding any provision of this section to the contrary, the

commissioner may designate therapeutic classes of drugs, including

classes with only one drug, as all preferred prior to any review that

may be conducted by the board pursuant to this section.

11. (a) The commissioner shall provide an opportunity for

pharmaceutical manufacturers to provide supplemental rebates to the

state public health plans for drugs within a therapeutic class; such

supplemental rebates shall be taken into consideration by the board and

the commissioner in determining the cost-effectiveness of drugs within a

therapeutic class under the state public health plans.

(b) The commissioner may designate a pharmaceutical manufacturer as

one with whom the commissioner is negotiating or has negotiated a

manufacturer agreement, and all of the drugs it manufactures or markets

shall be included in the preferred drug program. The commissioner may

negotiate directly with a pharmaceutical manufacturer for rebates

relating to any or all of the drugs it manufactures or markets. A

manufacturer agreement shall designate any or all of the drugs

manufactured or marketed by the pharmaceutical manufacturer as being

preferred or non preferred drugs. When a pharmaceutical manufacturer has

been designated by the commissioner under this paragraph but the

commissioner has not reached a manufacturer agreement with the

pharmaceutical manufacturer, then the commissioner may designate some or

all of the drugs manufactured or marketed by the pharmaceutical

manufacturer as non preferred drugs. However, notwithstanding this

paragraph, any drug that is selected to be on the preferred drug list

under paragraph (b) of subdivision ten of this section on grounds that

it is significantly more clinically effective and safer than other drugs

in its therapeutic class shall be a preferred drug.

(c) Supplemental rebates under this subdivision shall be in addition

to those required by applicable federal law and subdivision seven of

section three hundred sixty-seven-a of the social services law. In order

to be considered in connection with the preferred drug program, such

supplemental rebates shall apply to the drug products dispensed under

the Medicaid program and the EPIC program. The commissioner is

prohibited from approving alternative rebate demonstrations, value added

programs or guaranteed savings from other program benefits as a

substitution for supplemental rebates.

13. The commissioner may implement all or a portion of the preferred

drug program through contracts with administrators with expertise in

management of pharmacy services, subject to applicable laws.

14. For a period of eighteen months, commencing with the date of

enactment of this article, and without regard to the preferred drug

program or the clinical drug review program requirements of this

article, the commissioner is authorized to implement, or continue, a

prior authorization requirement for a drug which may not be dispensed

without a prescription as required by section sixty-eight hundred ten of

the education law, for which there is a non-prescription version within

the same drug class, or for which there is a comparable non-prescription

version of the same drug. Any such prior authorization requirement shall

be implemented in a manner that is consistent with the process employed

by the commissioner for such authorizations as of one day prior to the

date of enactment of this article. At the conclusion of the eighteen

month period, any such drug or drug class shall be subject to the

preferred drug program requirements of this article; provided, however,

that the commissioner is authorized to immediately subject any such drug

to prior authorization without regard to the provisions of subdivisions

five through eleven of this section.