ICYMI: State Medicaid Director Amir Bassiri's Op-Ed in Buffalo News: Changes to New York's Medicaid Pharmacy Benefit are Essential

ALBANY, N.Y. (March 30, 2023) – Today, the Buffalo News Opinion Section published a guest essay by State Medicaid Director Amir Bassiri, who explains why the forthcoming change for the state's Medicaid pharmacy benefit back to a fee-for-service system is positive, helping both the public and health care providers by lowering drug prices and improving transparency.

In addition to the savings realized by consumers, New York State is also investing $700 million in Medicaid dollars to help implement the transition, which was initially set in motion in 2020. This funding will ensure safety net providers can continue to offer essential services to the vulnerable populations relying on their service.

The op-ed appearing in the Buffalo News is available below.

"On April 1, New York State's Medicaid pharmacy benefit will make the long-awaited transition back to a fee-for-service system, as enacted in the 2020 budget. While concern over any major change is understandable, this transition will help the public and health care providers by lowering drug prices and improving transparency in the Medicaid program.

Actually, Medicaid recipients won't notice much of a change. They will continue to be able to access the same medication as before, at no extra cost. If anything, this transition will help consumers by saving them money and reducing the confusion they sometimes face when picking up their medication.

The advantage of changing models is what will happen behind the scenes. Under the new model, the Medicaid program will pay pharmacy costs directly, removing middlemen such as pharmacy benefit managers. The new process will create transparency in reimbursements to pharmacies, leverage the state's purchasing power to negotiate with drug manufacturers, and streamline practitioner administration.

Some of the state's leading non-profit organizations and hospitals are worried that they will lose funding under Medicaid's new pharmacy benefit program, called NYRx. But most of them will see increased funding since the state is investing $700 million in Medicaid dollars to help implement this long-planned transition. It is our top priority to ensure these safety net providers continue to offer essential services to the vulnerable populations they serve.

The only losers from the transition are middlemen profiting from adverse incentives in the current pharmacy system. As the 340b program has grown, pharmacy benefit managers have profited handsomely - and their publicly available financial documents detail just how profitable the 340B program has been to their bottom line.

Last year, our own Attorney General sued CVS for diverting funding away from safety net providers, citing that a scheme that forced 340B providers to incur millions in additional costs while CVS continued to benefit through its subsidiary. On April 1, these practices end.

As Medicaid director, I am responsible for working with providers to ensure access to patient-centered, high-quality health care for our members. This transition will eliminate financial incentives for Managed Care plans and their pharmacy benefit managers to act in ways that undermine care for Medicaid members.

Under the existing system, there are also more than a dozen different formularies -- lists of brand-name and generic drugs covered -- depending on the plan used. This creates confusion and inconsistencies that have real impacts for Medicaid recipients and complicates the roles of practitioners and pharmacies. These formularies restrict available drugs and access to preferred treatment.

In contrast, NYRx will cover all FDA-approved drugs with a uniform formulary governed by an independent body of clinical and financial experts, including consumer representatives. The NYRx pharmacy program is less restrictive than today's plans, covering more prescription drugs in all drug classes, including those for HIV, Diabetes and Hepatitis C. Further, NYRx will also offer the largest pharmacy network in the state with over 5,000 enrolled pharmacies.

Meanwhile, 340B providers will still have access to reduced drug prices and will be reimbursed by Medicaid for those drugs. But the middlemen will no longer reap millions in profits.

This is a transition that has been in the works for more than three years, that will help lower drug prices and invest $700 million in Medicaid dollars to support the New Yorkers who need it most."