New York Medicaid Shifts to New Pharmacy Benefit Program

April 5, 2023
Under the NYRx model, New York State says its Medicaid program will pay pharmacy costs directly, eliminating the need for managed care organizations to administer this benefit through pharmacy benefit managers

Beginning April 1, the 8 million New Yorkers enrolled in Medicaid transitioned to the state's new pharmacy benefit program, NYRx, which the state hopes will improve prescription drug access and coverage. The state said the long-awaited transition will enable Medicaid recipients to access more prescription medications with fewer restrictions, reduce confusion over the brand-name and generic drugs covered by the program, and create the largest pharmacy network in New York State.

Under the NYRx model, New York State's Medicaid program will pay pharmacy costs directly, eliminating the need for managed care organizations to administer this benefit through pharmacy benefit managers. The state says the new process creates transparency in reimbursements to pharmacies, leverages the state's purchasing power to negotiate with drug manufacturers, and streamlines administration for practitioners.

NYRx also improves coverage for Medicaid recipients by opening access to a statewide network of more than 5,000 pharmacies. In addition, the change establishes one comprehensive list of the brand-name and generic medications covered under the program, including all FDA-approved medications, which will broaden prescription drugs coverage for Medicaid recipients.

Additionally, NYRx will streamline the process for practitioners. Instead of working through varying rules and limitations for coverage under managed care organizations, pharmacists and physicians will be able to prescribe medication based on a uniform list that is less restrictive and governed by an independent public board of experts.

"The eight million New Yorkers enrolled in Medicaid will receive their same prescription medications, only from a larger network of pharmacies at no extra cost and with fewer restrictions and less confusion than before,” said New York State Medicaid Director Amir Bassiri, in a statement.With this transition, our Medicaid program will now pay all pharmacies directly rather than relying on corporate middlemen who do not always act in ways that that align with the interests of Medicaid members. This will create both transparency and efficiency that will work to the benefit our members and ensure access to patient-centered, high-quality health care."

In anticipation of NYRx being implemented, Gov. Kathy Hochul committed $705 million in Medicaid dollars in her FY 2024 budget to ensure 340b healthcare providers that received critical funding through their pharmacy programs aren't negatively impacted by the transition. Of the $705 million, the budget reinvests $30 million in state Medicaid funding to Ryan White HIV/AIDS programs, $250 million in state and federal Medicaid funding into Federally Qualified Health Centers, and $425 million in state and federal Medicaid funding into hospitals.

Initially adopted in 2020 in the FY 2021 Budget, the transition will also help address New York State's rapid growth in Medicaid pharmacy costs, which the state says has been driven primarily by pharmacy benefit managers and other intermediaries in the prescription medication supply chain. The transition was delayed by the FY 2022 Budget, which pushed implementation until April 1, 2023.

"PSSNY is proud to join with fellow pharmacists in recognizing and rejecting efforts to undermine NYRx,” said Pharmacists Society of the State of New York President Heather Ferrarese in a statement. “The shift to NYRx today will greatly enhance patient access to life-saving medications and other pharmacy services in both rural and urban areas across the state. It will increase transparency, and Medicaid patients will have one expansive drug formulary and access to one of the largest pharmacy networks in the country so they can use their pharmacy of choice. For New York's 8 million Medicaid patients, NYRx is the right prescription to meet their pharmacy care needs."

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