ALBANY — New York’s budget that passed early Monday morning eliminates spread pricing in Medicaid managed care, a common practice which allows prescription drug middlemen known as pharmacy benefit managers (PBMs) to retain any amounts the state pays in excess of what pharmacies were reimbursed for dispensing covered medications. Investigations in other states including Ohio, Arkansas, Illinois, West Virginia, Kentucky and Pennsylvania have uncovered evidence of spread pricing amounting to hundreds of millions of dollars — all pocketed by PBMs at taxpayers’ expense.  The new law is projected to save New York taxpayers at least $43 million by eliminating spread pricing.  The potential for savings in New York may be significantly higher according to a study released in January by the Pharmacists Society of the State of New York (PSSNY).

“Prohibiting pharmacy benefit managers from using spread pricing in Medicaid managed care is a positive first step toward fixing New York’s broken prescription drug distribution system,” said Ray Macioci spokesperson for FixRx. “As long as PBMs have a role, they will continue to rig prices, eliminate patient choice, rip off taxpayers and destroy neighborhood pharmacies. We look forward to working with our leaders in Albany to continue improving the quality and lowering the cost of healthcare in New York by cutting the middlemen out of Medicaid managed care prescription drug benefits and moving to a fair and common-sense ‘fee for service’ system in the weeks ahead.”

 FixRx is a campaign launched jointly by the New York City Pharmacists Society (NYCPS) and the PSSNY in November 2018 to improve the quality of healthcare provided by pharmacists, protect patient choice, save taxpayers money and restore fairness to the distribution of prescription drugs.

“This new law is an exciting and important first step in bringing high prescription drug costs down by shedding new light on the business practices of PBMs,” said Elizabeth Lasky, PSSNY executive director. “For too long New Yorkers have seen prescription costs go up while access to medications has gone down. We appreciate the support of our governor and the response from our legislators to issues raised by community pharmacists. While there is still more work to be done, we are pleased to have this foundation on which to build a cost-effective Medicaid program, improve patient access and create a sound future for local pharmacies.”