Relates to prescription drug formulary coverage for interchangeable biologics and biosimilars

• Democratic2
• Republican2

◆ The sponsor's argument

Why Michelle Hinchey says this is needed

Biological medications or 'biologics' are on the cutting edge of medical technology and are used to treat complicated conditions and diseases, including cancer, rheumatoid arthritis, diabetes, and multiple sclero- sis. These drugs are often life-changing and lifesaving, but they are also delicate and complicated to produce. Biologics are made using living organisms that produce the proteins required to make the medica- tion. This process makes these medications incredibly cost-prohibitive for companies to develop and test, resulting in high costs to patients and insurance companies. However, alternative versions of biologics called 'biosimilars' have been developed. Biosimilars are FDA-approved drugs that are similar to an existing biologic medication (or reference drug) and produce the same outcome. Biosimilars are produced by manufac- turers who did not develop the original biologic. Because these manufac- turers did not have to finance the extensive costs associated with biologic development, they can sell the medication at a lower cost. In addition, biosimilars under- go an abbreviated FDA approval process because the reference biologic has demonstrated the medication's effec- tiveness. This shorter proceeding further reduces development costs for biosimilar manufacturers and contributes to lower biosimilar prices. This bill would amend New York State's insurance law to allow insurance providers to require their insureds to try a biosimilar medication instead of the reference drug and place a biosimilar in a less expensive tier of prescription medication. This would generate cost savings for both the patient and the insurance company as biosimilars can vary in price from the reference product from as low as 5% to in most cases 85% less expensive, making access to medication more affordable for patients and relieving the costs that insurance plans are incurring as well as subscribers who continue to see higher costs in premiums due to alleged high prescription drug costs. By encouraging lower cost products to be offered at the lowest cost for patients, we are encouraging lower costs for the patients and those employers and plans paying for the products.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.