Pharmacy | December 28, 2017

New York Posts Draft Formulary Rule and Announces Vendor

New York posts draft drug formulary rule and announces vendor for development of new formulary

By Brian Allen, Vice President of Government Affairs

In the final week of 2017, the New York Workers’ Compensation Board (WCB) announced the Reed Group as the contracted vendor for the development of the state’s drug formulary. The selection of Reed Group was generally expected by industry experts based on the qualifications outlined in the RFP. 

In conjunction with the vendor announcement, the WCB posted a draft rule that will support the implementation and ongoing operation of the formulary. The draft rule will be published in the State Register on January 3, 2018. Public comments will be accepted for 60 days following that publication. It is critical for stakeholders to review the rule and provide comment. The draft rule posted on the WCB website is very similar to the drug formulary proposal in California. 

The major provisions are:

  • Preferred drugs may be dispensed without prior authorization
  • Unlisted, non-preferred and compounded medications must receive prior authorization before being dispensed.  
  • Like California, the proposed New York formulary also has some exceptions for “special” fills and “perioperative” fills. 
  • The proposed effective date is July 1, 2018, for new claims with a transition period until December 31, 2018, for claims with dates of injury prior to July 1, 2018.  
  • The proposed rule also requires insurance carriers and self-insured employers to: “identify all claims that have been prescribed for an unlisted or Non-Preferred drug and provide written notification to the injured employee and Treating Medical Provider, which contains the following information: (a) the notice of the impending date and applicability of the New York Pharmacy Formulary and (b) a process for determining an equivalent preferred drug as well as the process to request prior authorization for a Non-preferred or unlisted drug.” 
  • The identification and notice is required prior to October 1, 2018.
  • Rebates received by the pharmacy must be passed through to the insurance carrier or self-insured employer to help reduce system costs. Savings must be reported annually. 

There are a few areas of concern with this initial draft. The draft rule lacks language tying the dispensing of preferred medications to treatment guidelines.  California and other states included language stating that preferred drugs can be dispensed without prior authorization as long as they are prescribed in accordance with the treatment guidelines. This is an important distinction, since not all preferred drugs are right for all injuries. Additionally, the New York draft rule contains no language regarding retrospective review of medications. We have some concern that the July 1, 2018, effective date might be a bit aggressive given the 60-day comment period and likely revisions to the rule. There is also some uncertainty on the practicality of identifying and accounting for rebates that are tied specifically to New York claims. 

We do support the clear language on the identification and transition of older claims to the formulary. This is an area where the PBM utilized by the insurer or self-insured employer can be a great help in identifying the non-preferred or unlisted medications and recommending alternatives that can be found on the preferred list.  

Stakeholders should pay careful attention to the California rollout in the next 60 days to help identify and address any potential issues with the Reed Group formulary model. Any issues should be shared with New York so they can avoid any currently unforeseen pitfalls.  It is vitally important for system stakeholders to weigh in with comments in support of various rule provisions along with concerns about provisions that should be addressed or changed in the rule.  In our previous conversations with the WCB on the formulary issue, we have found them to be open to ideas, thoughtful in their approach, interested in market feedback and sincere in their desire to get the formulary right. Our government affairs team will be actively engaged with the WCB to offer market and clinically based perspectives on how to efficiently implement a drug formulary to achieve the best outcomes for injured workers.  We encourage our partners to follow the rule making process and to offer input based on their experiences in the New York workers’ compensation system.

The rule text, instructions on submitting comments and other information on the New York Drug Formulary rule and vendor can be found here.  

For further information about this alert or for other legislative or regulatory questions, please contact Brian Allen, vice president of government affairs, at or by telephone at 801.661.2922.  


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