US FTC staff say proposed New York legislation would reduce competition and lead to higher Rx drug costs

US Federal Trade Commission staff, in response to a request for comment from New York State Senator James Seward (Republican), stated that consumers are likely to be harmed by proposed state legislation that would limit a health plan’s ability to steer beneficiaries to a lower cost mail order provider of prescription drugs.

The FTC staff comment letter expressed concern that New York Assembly Bill 5502-B, if enacted, would reduce competition between retail and mail order pharmacies, leading to higher costs and, potentially, reduced access to prescription drugs for New York consumers.

The legislation would limit a health plan’s ability to require or encourage the use of any particular mail order pharmacy by placing restrictions on all health insurance policies and insurers that provide prescription drug coverage. In particular, policies could not require that long-term maintenance prescriptions be filled at mail order pharmacies or offer incentives, such as lower co-payments or deductibles, for using a mail order pharmacy.