§ 280. Medicaid drug cap. 1. The legislature hereby finds and declares\nthat there is a significant public interest for the Medicaid program to\nmanage drug costs in a manner that ensures patient access while\nproviding financial stability for the state and participating providers.\nSince two thousand eleven, the state has taken significant steps to\ncontain costs in the Medicaid program by imposing a statutory limit on\nannual growth. Drug expenditures, however, continually outpace other\ncost components causing significant pressure on the state, providers,\nand patient access operating under the Medicaid global cap. It is\ntherefore intended that the department establish a supplemental rebate\nprogram as part of a focused and sustained effort to balance the growth\nof drug expenditures with the growth of total Medicaid expenditures.\n 2. The commissioner shall review at least annually the department of\nhealth state funds Medicaid drug expenditures to identify drugs in the\neightieth percentile or higher of total spend, net of rebate or in the\neightieth percentile or higher based on cost per claim, net of rebate.\n 3. (a) The commissioner may identify and refer drugs in the eightieth\npercentile or higher of total spend, net of rebate or in the eightieth\npercentile or higher based on cost per claim, net of rebate, to the drug\nutilization review board established by section three hundred\nsixty-nine-bb of the social services law for a recommendation as to\nwhether a target supplemental Medicaid rebate should be paid by the\nmanufacturer of the drug to the department and the target amount of the\nrebate.\n (b) If the department intends to refer a drug to the drug utilization\nreview board pursuant to paragraph (a) of this subdivision, the\ndepartment shall notify the manufacturer of such drug and shall attempt\nto reach agreement with the manufacturer on a rebate for the drug prior\nto referring the drug to the drug utilization review board for review.\nSuch rebate may be based on evidence-based research, including, but not\nlimited to, such research operated or conducted by or for other state\ngovernments, the federal government, the governments of other nations,\nand third party payers or multi-state coalitions, provided however that\nthe department shall account for the effectiveness of the drug in\ntreating the conditions for which it is prescribed or in improving a\npatient's health, quality of life, or overall health outcomes, and the\nlikelihood that use of the drug will reduce the need for other medical\ncare, including hospitalization.\n (c) In the event that the commissioner and the manufacturer have\npreviously agreed to a supplemental rebate for a drug pursuant to\nparagraph (b) of this subdivision or paragraph (e) of subdivision seven\nof section three hundred sixty-seven-a of the social services law, the\ndrug shall not be referred to the drug utilization review board for any\nfurther supplemental rebate for the duration of the previous rebate\nagreement, provided however, the commissioner may refer a drug to the\ndrug utilization review board if the commissioner determines there are\nsignificant and substantiated utilization or market changes, new\nevidence-based research, or statutory or federal regulatory changes that\nwarrant additional rebates. In such cases, the department shall notify\nthe manufacturer and provide evidence of the changes or research that\nwould warrant additional rebates, and shall attempt to reach agreement\nwith the manufacturer on a rebate for the drug prior to referring the\ndrug to the drug utilization review board for review.\n (d) The department shall consider a drug's actual cost to the state,\nincluding current rebate amounts, prior to seeking an additional rebate\npursuant to paragraph (b) or (c) of this subdivision.\n (e) If the commissioner is unsuccessful in entering into a rebate\narrangement with the manufacturer of the drug satisfactory to the\ndepartment, the drug
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