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Governor Andrew M. Cuomo announced the 6th proposal of his 2020 State of the State agenda Wednesday - a three part plan to lower prescription drug costs for all New Yorkers. The Governor's proposal would cap insulin co-payments at $100 per month for insured patients to help address the rising cost of insulin that has resulted in diabetes patients rationing, skipping doses and not filling prescriptions. The proposal would empower the State Department of Financial Services to investigate and hold drug manufacturers accountable for unjustifiable, exorbitant increases in drug prices. Finally, the proposal would establish a commission of experts to study the feasibility and benefits of a Canadian drug importation program and submit a plan to the U.S. Department of Health and Human Services for review.

"The exorbitant cost of prescription drugs is a massive burden on families across the country, and we're determined to use every tool in the tool box and pursue every available avenue to bring real relief to New Yorkers," Cuomo said. "This multi-pronged approach to tackling a complex problem will hold manufacturers accountable for drug prices that border on price-gouging and explore new ways to access less expensive medicines and bring more competition into the market."

Lowering Cost of Life-Saving Drugs: Capping Co-Payment of Insulin

The price of insulin has nearly tripled in the past ten years and there are few affordable alternatives to consumers. In 2016, a person with type 1 diabetes incurred annual insulin costs of $5,705 on average. Due to this reality, people with diabetes have reported rationing, skipping doses, and not filling needed prescriptions. According to a Yale University study, one in four people with Type I diabetes admitted to not taking insulin as prescribed by their doctor due to the high cost of the medicine. These risky tradeoffs endanger the health of the patient and lead to greater medical costs down the line. To help address this problem, the Governor is proposing capping insulin co-payments at $100 per month for insured patients. Only one other state — Colorado — caps insulin co-pays.

Granting DFS Additional Enforcement Authority over Spikes in Drug Costs

In just the first half of 2019, manufacturers increased the prices on 3,400 drugs at an average increase of 10.5%. Runaway increases in drug prices drive up healthcare costs and force consumers to stop filling prescriptions on life-saving drugs.

The Governor will introduce legislation to empower the State Department of Financial Services to investigate significant spikes in prescription drug prices and call on manufacturers to show a reasonable justification for these sudden increases or face fines and pay restitution to harmed consumers. When these price spikes occur, DFS will be authorized to hold a hearing to demand that manufacturers justify the increase. If the price is deemed unjustified, then DFS would disallow the increase and potentially impose a fine, including rebates to impacted consumers. This builds on DFS authority to set rates for insurance premiums, a significant portion of which are being driven by increases in prescription drug costs.

Lowering Prescription Drug Cost by Importing Canadian Drugs

Governor Cuomo will create the Prescription Importation Commission to work with insurers, consumers, health care providers, and other stakeholders to identify any potential consumer savings from importing drugs from Canada.

The Commission will review processes for ensuring a drug importation program meets safety standards, including for track and trace requirements to enable the tracing of drugs from manufacturers to pharmacies, labeling requirements that will inform medical professionals and consumers, making sure foreign sellers are registered, importation entry requirements, and post-importation requirements such as procedures for relabeling or recalls.

The Commission will also recommend processes for ensuring a drug importation program meets safety standards, track and trace requirements to enable the tracing of drugs from manufacturers to pharmacies, labeling requirements that will inform medical professionals and consumers, registration requirements for foreign sellers, importation entry requirements, and post-importation requirements such as procedures for relabeling or recalls.

The Commission will also compile a list of drugs that could be imported through the program, ensuring that drugs eligible for importation are drugs authorized for sale in Canada and that they are versions of FDA-approved prescription drugs.

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