On May 11, New York Gov. Kathy Hochul announced the establishment of the Pharmacy Benefits Bureau within the State’s Department of Financial Services (DFS). The Bureau will handle the licensing and supervision of pharmacy benefit managers (PBMs), and in particular their impact on consumers and the cost of healthcare. The Bureau will also have authority to investigate drug price spikes.

PBMs are intermediaries in the drug supply chain that manage prescription drug benefits on behalf of health insurers, Medicare Part D drug plans, large employers, and other payers. Under limited regulatory oversight, PBMs have controlled the prices of drugs for plans and reimbursement rates for pharmacies nationwide.

In addition to the newly created Bureau, earlier this year, Gov. Hochul signed into law a regulatory framework providing for the licensure and registration of PBMs operating in the State. The law also prescribes certain duties and obligations for PBMs when performing services, and allows the DFS to enforce the law as well as receive complaints from consumers, pharmacies, and healthcare providers regarding PBM practices

By June 1, 2022, every PBM operating in New York must submit a registration application for review and approval by the Bureau.