New York to Finalize PBM Regulation

The New York Department of Financial Services (DFS) has released final regulations implementing a 2022 PBM licensure law. According to DFS, this regulation will be officially finalized and effective upon its publication in the state register on Nov. 27. The final regulation follows DFS’ 2023 release of proposed regulations, which were ultimately withdrawn following vocal opposition from many Express Scripts clients.

Fortunately, the worst provisions from the 2023 proposed regulation, such as the $10.18 dispense fee mandate, network restrictions, and frozen formulary requirements, are not included in the final regulation. However, some problematic provisions remain including state regulation of ERISA and Medicare, provisions jeopardizing certain types of pharmacy networks, member communication restrictions, and pharmacy audit restrictions.

Over the last year, State Government Affairs initiated multiple client activation campaigns resulting in numerous clients, including New York City organized labor entities, voicing opposition to the proposed regulations. This opposition was instrumental in taking a catastrophic proposed regulation and molding it into something much less impactful.