Requires investigating of critical prescription drug pricing; provides for civil penalties and private actions for certain critical prescription drug pricing.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10467
SPONSOR: Hyndman TITLE OF BILL:
An act to amend the insurance law, in relation to investigating critical
prescription drug pricing
PURPOSE:
To protect vulnerable populations from price increases for critical
prescription drugs.
SUMMARY OF PROVISIONS:
Section 1 amends the insurance law by adding a new section 346 which
permits the superintendent to investigate any increase in a "critical
prescription drug" as defined in the amendment that exceeds the consumer
list price index during any preceding twelve-month period. The super-
intendent may require the submission of a statement in writing justify-
ing the price increase and may also compel the attendance of witnesses
to be examined under oath as well as require the production of any books
or papers which the superintendent deems relevant to the investigation.
A person's refusal to cooperate with the investigation will subject that
person to civil and criminal penalties. This section also provides for
civil penalties if, after investigation, the superintendent determines
after notice and a hearing, that the increase in the price of the crit-
ical prescription drug was unjustified.
Section 2 provides the effective date.
JUSTIFICATION:
Anecdotal reports of significant price increases for prescription drugs
are supported by the following data: Overall spending on prescription
drugs has risen tremendously since 1960. The cost of the same drugs can
differ by thousands depending on where in the country they are being
purchased. The price of insulin nearly doubled between 2012 and 2016. In
the first half of 2019, drug prices rose an average of 10.5% or 5 times
the rate of inflation.
From 2012 to 2017, brand name drugs rose on an average of 9.5 percent
per year, leading researchers to conclude that drug prices are on pace
to double every 7-8 years. (The drugs in this study included treatments
for diabetes, smoking cessation, depression, cholesterol, pain, meno-
pause, and erectile dysfunction.) In a study of 49 common top-selling
brand-name drugs, 78% of the drugs that have been available since 2012
have seen an increase in insurer and out-of-pocket costs by more than
50%, and 44% have more than doubled in price.
Nearly one in four Americans struggle to pay for their prescription drug
prices and more than four in ten Americans in poor health struggle to
afford their drugs. The poor and particularly the elderly are especially
vulnerable to price increases. The inability to access reasonably priced
drugs can be life-threatening. It is not unfair to require companies
that manufacture and distribute critical prescription drugs to justify
price increases that exceed the cost of living index. It is also not
unfair to punish companies that engage in such practices that threaten
the very lives of many Americans.
LEGISLATIVE HISTORY:
S2387 of 2023-24: Referred to Insurance.
S320 of 2021-22: Referred to Insurance.
S7739 of 2019-20: Referred to Insurance.
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
10467
IN ASSEMBLY
March 6, 2026
___________
Introduced by M. of A. HYNDMAN -- read once and referred to the Commit-
tee on Insurance
AN ACT to amend the insurance law, in relation to investigating critical
prescription drug pricing
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The insurance law is amended by adding a new section 346 to
2 read as follows:
3 § 346. Investigation by the superintendent with respect to critical
4 prescription drugs. (a) Whenever it shall appear to the superintendent,
5 either upon complaint or otherwise, that in the advertisement, purchase
6 or sale within this state of any critical prescription drug, that the
7 price of that critical prescription drug has increased over the course
8 of any twelve months by more than the increase of the cost of living
9 index for the list price of that critical prescription drug, or if it is
10 suspected that any person, partnership, corporation, company, trust or
11 association, or any agent or employee thereof has sold or offered for
12 sale or is attempting to sell or is offering for sale any critical
13 prescription drug for which the price of that drug has increased over
14 the course of any twelve months by more than the increase of the cost of
15 living index for the list price of that drug, or if the superintendent
16 believes it is to the public interest to investigate, the superintendent
17 shall require such person, partnership, corporation, company, trust or
18 association, or any agent or employee thereof, to file with the depart-
19 ment a statement in writing under oath or otherwise as to all the facts
20 and circumstances concerning the price increase and for that purpose may
21 prescribe forms upon which such statements shall be made.
22 (b) In addition to any other power granted by law, the superintendent,
23 their deputy or other officer designated by the superintendent is
24 empowered to subpoena witnesses, compel their attendance, examine them
25 under oath and require the production of any books or papers which they
26 deem relevant or material to the inquiry. Such power of subpoena and
27 examination shall not abate or terminate by reason of any action or
28 proceeding brought by the attorney general.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01571-01-5
A. 10467 2
1 (c) No person shall be excused from attending such inquiry in
2 pursuance to the mandates of a subpoena, or from producing a paper or
3 book, or from being examined or required to answer a question on the
4 ground of failure of tender or payment of a witness fee and/or mileage,
5 unless at the time of such appearance or production, as the case may be,
6 such witness makes demand for such payment as a condition precedent to
7 the offering of testimony or production required by the subpoena and
8 unless such payment is not thereupon made. The provisions for payment of
9 witness fee and/or mileage shall not apply to any officer, director or
10 person in the employ of any person, partnership, corporation, company,
11 trust or association whose conduct or practices are being investigated.
12 (d) If a person subpoenaed to attend such inquiry fails to obey the
13 command of a subpoena without reasonable cause, or if a person in
14 attendance upon such inquiry shall without reasonable cause refuse to be
15 sworn or to be examined or to answer a question or to produce a book or
16 paper when ordered so to do by the officer conducting such inquiry, or
17 if a person, partnership, corporation, company, trust or association
18 fails to perform any act required by this section to be performed, such
19 person shall be guilty of a misdemeanor and shall be subject to a civil
20 penalty as set forth in subsection (e) of this section.
21 (e) (1) If after an investigation authorized under this section the
22 superintendent determines that the increase in the price of the critical
23 prescription drug is unjustified, the superintendent may, after notice
24 and a hearing, levy a civil penalty not to exceed the greater of:
25 (A) five thousand dollars for each offense;
26 (B) a multiple of two times the aggregate damages attributable to the
27 offense; or
28 (C) a multiple of two times the aggregate economic gain attributable
29 to the offense.
30 (2) If any person, partnership, corporation, company, trust or associ-
31 ation, that fails to submit a written statement required by the super-
32 intendent under subsection (a) of this section or violates subsection
33 (d) of this section, the superintendent may, after notice and a hearing,
34 levy a civil penalty not to exceed to one thousand dollars per day that
35 such failure continues.
36 (f) For the purposes of this section, a "critical prescription drug"
37 shall be defined as one necessary to prevent or treat a disease or state
38 in which death is possible or imminent.
39 § 2. This act shall take effect immediately.
