Senate passes bills aimed at reducing cost of prescription drugs

ALBANY — The State Senate and Gov. Kathy Hochul are proposing to end the co-pay that New Yorkers are charged for insulin as part of a broad effort to cut medication prices.

The measures seek to reduce the cost to New Yorkers at the pharmacy as well as the cost to the state for medications purchased through the Medicaid and Medicare health care systems.

Last week, in addition to eliminating the insulin co-pay for 1.6 million New Yorkers being treated for diabetes, the Senate’s Democratic majority passed bills that would:

• Have the state partner with drug companies to increase development of lower-cost generic forms of drugs and get them to market faster. The bill would allow New York to do what California did in 2023 by entering into an agreement to manufacture insulin with a drug company. That reduced the cost of a common dosage to $30 from $300, saving individuals $2,000 to $4,000 annually.
• Attempt to seize on a January decision by the federal government to see if the state can buy common medications from the Canadian market, where prices can be a fraction of those charged by drug companies in the United States. However, federal and Canadian regulatory hurdles remain.
• Strengthen New York’s buying power by joining other states to negotiate lower prices.

The legislation still has to pass the state Assembly before it can become law.

Meanwhile, Hochul’s current budget proposal also calls for a ban on co-pays and other cost-sharing fees for insulin, a critical and common medication, as part of her package of bills to lessen the burden of medical costs. She said her proposal would save New Yorkers an estimated $14 million in 2025.

Under a state law passed in 2020, the cost of insulin paid by a New Yorker must not exceed $100 for a 30-day supply regardless of any insurance deductible, co-pay, coinsurance or other cost-sharing requirement. For uninsured New Yorkers, the cost is capped at $35 under a settlement with major drug companies last year.

The Senate proposals, if passed into law, would save individuals hundreds of dollars per medication and thousands of dollars annually, according to Michael Murphy, spokesman for the Senate’s Democratic majority

As for the state, the measures could save at least $330 million, or 10%, in its pharmacy coverage health plans, Murphy said.

Hochul’s health care proposal in the state budget deal being negotiated with legislative leaders also would attempt to reduce debilitating debt for patients after major medical treatment and increase medical and disability leave.

“The governor will continue working closely with the legislature to make the state more affordable and more livable,” Hochul spokesman Justin Henry said.

On the topic of Canadian drugs, a Senate bill would request approval from the U.S. Food and Drug Administration to pursue buying drugs from Canada and other countries that have lower prices and meet U.S. safety standards. Like many countries other than the United States, Canada limits prices pharmaceutical companies can charge as a condition to entering the market.

The FDA on Jan. 5 for the first time allowed a state — Florida — to try to import drugs from Canada. However, U.S. and Canadian approvals for New York to do the same aren’t a sure thing.

The bill’s sponsor, Sen. James Skoufis (D-Woodbury), argued that important medications should be priced by the free market like other goods, not set differently by powerful pharmaceutical companies for different customers.

Skoufis said Canadian prices for common medications are sometimes a quarter of the price of the same drugs sold stateside. “Big Pharma has created this racket,” he said.

The influential lobby AARP New York, which advocates for older New Yorkers, said U.S. prices can be two to three times more than the same medications when sold in Canada.

“Prescription drugs don’t work if people can’t afford to take them,” said Beth Finkel, director of the group formerly known as the American Association for Retired People. The Senate’s package of bills “is a major step toward making drug prices more affordable for all New Yorkers, especially older people living on a fixed income.”

The allure of buying much lower cost drugs through Canada has been discussed for years in Albany, but pharmaceutical companies have lobbied against the effort, warning that the safety standards in other countries don’t match those in the United States. The companies also note that higher prices paid stateside help pay for the high cost of producing the drugs and getting them to market faster, as well as research and development to create more and better medications.

The trade group Pharmaceutical Research and Manufacturers of America, known as PhRMA, based in Washington, D.C., opposes the FDA's decision to allow Florida to try to import drugs from Canada.

“Ensuring patients have access to needed medicines is critical, but the importation of unapproved medicines, whether from Canada or elsewhere in the world, poses a serious danger to public health,” said PhRMA President and CEO Stephen J. Ubl.

Further, the Canadian Pharmacists Association, a trade group, said after the Jan. 5 decision by the FDA that “any attempts to import drugs from Canada could further exacerbate our already fragile drug supply.” The association said the Canadian government already has in place “strong measures to help restrict mass exportation of drugs to the U.S.”

By Michael Gormley

michael.gormley@newsday.com@GormleyAlbany

Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.