On Dec. 11, New York State Governor Andrew Cuomo signed Senate Bill 3346-B, requiring contracts between pharmacy benefit managers (PBMs) and pharmacies (or pharmacies’ contracting agents) to include a mechanism for appeals for contract disputes relating to multi-source generic drug pricing.

Pharmacy benefit management contracts must include the following provisions regarding appeals:

The right for a pharmacy to appeal for 30 days following an initial claim submitted for payment;

A telephone number through which a network pharmacy may contact the PBM for the purpose of filing an appeal and an electronic mail address of the individual who is responsible for processing appeals;

The PBM must send an email acknowledging receipt of the appeal and respond in an email to the pharmacy (and/or the pharmacy’s contracting agent) filing the appeal within seven business days indicating its determination. If the appeal is determined to be valid, the maximum allowable cost for the drug shall be adjusted for the appealing pharmacy effective as of the date of the original claim for payment. The PBM must require the appealing pharmacy to reverse and rebill the claim in question in order to obtain the corrected reimbursement;

If an update to the maximum allowable cost is warranted, the PBM or covered entity shall adjust the maximum allowable cost of the drug effective for all similarly situated pharmacies in its network in NY State on the date the appeal was determined to be valid; and

If an appeal is denied, the PBM must identify the national drug code of a therapeutically equivalent drug, as determined by the federal Food and Drug Administration, that is available for purchase by pharmacies in NY State from wholesalers registered under NY law at a price which is equal to or less than the maximum allowable cost for that drug as determined by the PBM.

Senate Bill 3346-B will be codified as NY Public Health Law § 280–A and takes effect March 10, 2016.