Change Invests $705 Million in Medicaid Funding Directly to 340b providers, including Ryan White HIV/AIDS programs, Federally Qualified Health Centers and Hospitals
Governor Kathy Hochul today launched NYRx, the state’s new pharmacy benefit program, which will improve prescription drug access and coverage for the eight million New Yorkers enrolled in Medicaid statewide. 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.
“The transition to NYRx today is in the best interest of those New Yorkers relying on Medicaid for affordable prescription medication,” Governor Hochul said. “In addition to expanding coverage and access through this program, we are also committing hundreds of millions of additional Medicaid dollars to reinvest in critical providers, including Ryan White programs and Federally Qualified Health Centers, to ensure this change is seamless and has positive impacts across our 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 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.
Acting Health Commissioner Dr. James McDonald said, “Today’s shift back to a fee-for-service pharmacy benefit model is the right move for New York and ensures all communities across the state will have continued access to low-cost prescription medications. I thank Governor Hochul for her continued commitment as a champion of New York’s diverse communities and fully support her proposal to add $705 million in the FY 2024 budget to provide the state’s non-profit organizations and hospitals —including Ryan White centers that serve patients enrolled in HIV/AIDS programs —with the funding they need to continue offering essential services to some of the state’s most vulnerable populations.”
New York State Medicaid Director Amir Bassiri said, “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. 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.”
Bassiri reiterated the patient-centered benefits of the transition in an opinion piece published this week in the Buffalo News. The transition is also supported by pharmacological organizations and various health care providers, including the state’s largest Federally Qualified Health Center.
In anticipation of NYRx being implemented, Governor Hochul committed $705 million in Medicaid dollars in her FY 2024 budget to ensure 340b health care 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 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 today, April 1, 2023.
Medicaid recipients or others with questions or in need of assistance with NYRx may visit the program’s website, email NYRx@health.ny.gov or contact the Medicaid Helpline at 1-855-648-1909 or TTY 1-800-662-1220. The Helpline is available 8 a.m. to 8 p.m. Monday through Friday, and 9 a.m. to 1 p.m. on Saturday.
The state Department of Health also prepared a fact sheet available in multiple languages for consumers answering basic questions about the transition. Additional information is available at the on the eMedNY website.
State Senator James Skoufis said, “Under NYRx, our taxpayers, providers, and independent pharmacies will finally receive the Medicaid network they’ve long deserved. The previous system was financially unsustainable and inherently unjust to our healthcare professionals on our community’s front lines – and the savings generated by this new carveout will be directly reinvested into our hospitals and health centers to ensure the strongest possible transition. This move is a win for everyone involved except the drug company middlemen who will no longer be able to rip off the state’s taxpayers, patients, and providers. My thanks to Governor Hochul for her leadership on this important issue.”
Pharmacists Society of the State of New York President Heather Ferrarese said, “PSSNY is proud to join with fellow pharmacists in recognizing and rejecting efforts to undermine NYRx. The shift to NYRx today will greatly enhance patient access to lifesaving 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 eight million Medicaid patients, NYRx is the right prescription to meet their pharmacy care needs.”
Community Pharmacy Association of New York State President Michael Duteau said, “We commend Governor Hochul and the state Legislature for this lifesaving reform to expand access and quality of pharmacy care for all with Medicaid. Patients will no longer be forced to follow restrictive pharmacy network requirements set by pharmacy benefits managers and will have one consistent statewide drug formulary which covers 100 percent of FDA-approved medications. This will improve care for New Yorkers in underserved communities with HIV, Hepatitis C, diabetes, asthma, mental health and substance use disorders and other serious and chronic conditions.”
Sun River Health Chief Financial Officer James Sinkoff said, “New York State’s NYRx program achieves many of the goals of the 340b program. Importantly, the patient-physician relationship will go unimpeded under this new program. Sun River Health thanks Governor Hochul for recognizing the need to sustain essential resources to assure patients can continue to receive high quality, affordable healthcare without interruption.”
Refuah Health CEO Chanie Sternberg said, “Over the past several years, New York State has faced unprecedented challenges in delivering high-quality health care and ensuring access to services for those who need it most. While there are still many barriers that need to be addressed as we work together to achieve health equity, today we would like to take the opportunity thank the Governor’s office for their support and taking crucial steps to ensure continuity of care and access to services for medically vulnerable and underserved New Yorkers.”
New York State Academy of Family Physicians Dr. Andrew Symons said, “On behalf of our 6,000 family physician members across the State, we applaud Governor Kathy Hochul and State Legislators for expanding patient access to pharmacy care under Medicaid on April 1st. This critical policy, known as NYRx, will provide one formulary covering all FDA-approved medications, provide one set of rules for prescribers to follow to get needed coverage for patients and provide better access to lifesaving therapies for Medicaid patients. We commend their leadership in making this transformative step toward improving health care overall in New York State.”
