Empire State Today

A proposed set of regulations of pharmacy benefit managers (PBMs) operating in New York has entered the 60 day public comment period.

The regulations, announced Feb. 6 by NY Department of Finance Service (NYDFS) Superintendent Adrienne Harris, would apply to “new market conduct” by PBMs.

“It is no coincidence that as New Yorkers continue to pay more for life-saving medication each year, the PBM industry records billions in revenue with little regulatory oversight,” said Harris in a statement. “This proposed regulation seeks to put an end to unfair practices by the PBM industry, making prescription drugs more affordable and accessible for New Yorkers.”

A PBM is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans. PBMs process prescriptions for the groups that pay for drugs, primarily using networks of pharmacies. 

PBMs also provide services such as mail order pharmacies, clinical management, and specialty pharmacy services. 

State legislation passed in 2021 required DFS to develop regulations that would address “conflicts of interest; and deceptive, anti-competitive, and unfair claims practices” by PBMs.

The regulations proposed by DFS would prohibit PBMs from disallowing in-network pharmacies from providing mail order pharmacy services. They would also require PBMs to provide an online directory of formularies and pharmacies.

PBMs would also be required to post a phone number and email address for consumers to contact with questions, to which PBMs would be required to respond “in a reasonable amount of time.”

The proposed regulations also include provisions regarding audits against small pharmacies not affiliated with PBMs, allowing electronic submission of information between small pharmacies and PBMs, among other measures.

The proposed regulations were published in the State Register on March 27 and the public comment period ends May 28. 

Harris was appointed NYDFS Superintendent in January 2022 by Gov. Kathy Hochul (D-NY). Prior to her appointment, she was on the faculty of the University of Michigan, focusing on financial technology, financial regulation, and commercial law. Harris was as a Senior Advisor at the U.S. Treasury Department during the Obama Administration. 

Additionally, she has held roles at various financial technology startups and was a Special Assistant to the President for Economic Policy at the National Economic Council. Harris holds a Bachelor of Arts from Georgetown University and a Juris Doctor from Columbia Law School.