Section 453.1 sets forth how pharmacy benefit managers licensed or registered pursuant to Insurance Law Article 29 are assessed for the operating expenses of the Department attributable to regulating such pharmacy benefit managers.

Section 453.2 sets forth the billing and assessment process.

Section 453.3 sets forth how assessments of pharmacy benefit managers will be calculated.

Section 453.4 sets forth penalties for noncompliance of pharmacy benefit managers for failing to submit their reported number of claims by January 15 of each year.

Section 453.5 sets forth special assessments. In the event the Superintendent determines that expenses associated with a specific examination, investigation, or review are best allocated solely to an individual registrant or licensee subject to such examination, investigation, or review, such expenses shall be billed separately.

The title of Part 454 is “Filings and Other Requirements for Issuance and Maintenance of a License.”

Section 454.1 sets forth the requirements that pharmacy benefit managers must follow in order to obtain a pharmacy benefit manager license.

Section 454.2 establishes that pharmacy benefit managers are covered entities under 23 NYCRR Part 500 and as such shall be in compliance with the cybersecurity requirements contained therein.

The title of Part 455 is “Reporting and Recordkeeping Requirements.”

Section 455.1 sets forth the standards for maintaining records that pharmacy benefit managers must follow.

Section 455.2 sets forth the records that pharmacy benefit managers must maintain.

Section 455.3 establishes disclosure requirements for pharmacy benefit managers to the Department.

Section 455.4 sets forth the annual reporting requirements for pharmacy benefit managers.

The Department of Financial Services (“Department”) has determined that a revised RIS is not required for the adoption of the consolidated second amendment to Insurance Regulation 219 and new Insurance Regulations 223, 224, and 225 because the non-substantive revisions to sections 450.1(i), 453.3(b), 454.1(b)(8), and 454.1(c)(8) do not require a change to the previously published RIS.

The revision to section 450.1(i) strikes the language “is operating in this State” and “wholesalers, distributors” from the definition of “pharmacy services administrative organization or PSAO” so as to be consistent with the definitions for other entities; the revision to section 454.1(a)(1) strikes the word “electronically” to ensure access to different methods of payment; the Department updated the safe harbor language in section 454.1(a)(3) as the timeline mentioned in the proposal has passed already; the language “processed” was changed to “adjudicated” in sections 453.3(b) and 454.1(b)(8) to clarify the intent that each claim submitted by a pharmacy located in New York for adjudication should be counted in the claims reported under Part 453 to determine the assessment allocation; and the Department deleted three provisions, specifically sections 454.1(c)(8), 454.1(c)(10), and 454.1(e)(2). These revisions are consistent with the intent of the proposed rulemaking as stated in the RIS, and therefore, are non-substantive revisions.

A revised Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement is not required for the adoption of the consolidated rulemaking because the non-substantive revisions to Insurance Regulations 219, 223 and 224 do not require a change to the previously published Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement.

As a rule that requires a RFA, RAFA or JIS, this rule will be initially reviewed in the calendar year 2026, which is no later than the 3rd year after the year in which this rule is being adopted.

The Department of Financial Services (“Department”) received comments from one pharmacy benefit manager (“PBM”), two trade organizations representing health plans, one trade organization representing PBMs, one trade organization representing drug wholesale distributors, and one trade organization representing healthcare providers.

One commenter expressed their overall support and appreciation for the regulation and did not suggest any revisions to the regulation. Other comments included: concerns regarding certain definitions under Part 450, which include a “substantial number of beneficiaries,” “pharmacy services administrative organization or PSAO,” and “rebate aggregator”; a request for the Department to cite the statutory authority to collect information on rebate aggregators and/or switch companies; concerns regarding the assessment’s calculations and billing structure contained in Part 453; a request to provide a clear definition of the claims that are in the scope of the assessment’s calculation under Part 453; a request to add cure period language to section 453.4; concerns regarding the special assessments provisions under section 453.5; concerns regarding the $24,000 license application fee; a request to strike the language “or any matter” from paragraph 454.1(b)(7); a request to strike the language “such information as the Superintendent may require” in section 454.1(b)(9); a request to strike the language “other applicable documents” in section 454.1(c)(1); a request to strike the subparagraph 454.1(c)(4); a statement that greater clarity is needed on other required filings within the license application, such as corporate bylaws and documents regulating internal affairs; concerns regarding the requirement to provide pharmacy and PSAO contracts under section 454.1(c)(8); concerns regarding the disclosure of PBM provider manuals under section 454.1(c)(10); a request to strike the language “without omissions or redactions” in section 454.1(d); a request for greater specificity on the timeframe for maintaining records under section 455.2(a); concerns regarding the reporting requirements contained in the rulemaking; an assertion that the regulation is preempted under the federal Employee Retirement Income Security Act; and an assertion that the regulation is preempted under the Centers for Medicare and Medicaid Services’ Medicare Part D.

The Department addresses all the comments it received in full in the complete version of the assessment of public comments posted on the Department’s website at.