New York State Seal
STATE OF NEW YORK
INSURANCE DEPARTMENT
25 BEAVER STREET
NEW YORK, NEW YORK 10004

George E. Pataki
Governor

Gregory V. Serio
Superintendent

The Office of General Counsel issued the following opinion on January 14, 2003, representing the position of the New York State Insurance Department.

RE: Prescription Drug Coverage, Pharmacy Management Companies.

Question Presented:

Must a pharmacy management company limit the amount of a controlled substance it dispenses to a 30 day supply?

Conclusion:

Pharmacy management companies located in New York State are presently so limited. Please note that, as of March 19, 2003, pursuant to a new statute, both companies located in New York State and companies that mail prescription drugs into New York State will be subject to the same limitation.

Facts:

The inquirer filled a prescription for zolpidem tartrate through ABC. ABC will only dispense a 30 day supply of the product, although the inquirer’s physician has written the prescription for a 90 day supply. Since the amount the inquirer has to pay ABC for each prescription is identical, no matter which amount is dispensed, the inquirer believes that ABC is improperly increasing its out-of-pocket cost.

ABC has informed the inquirer that it is constrained by New York law to only dispense a 30 day supply of the drug. However, in a previous telephone conversation with this Department the inquirer was informed that, since it is located outside of New York, ABC was not subject to New York law.

Analysis:

ABC is a subsidiary of DEF, a pharmaceutical manufacturer, and functions as a pharmacy manager for the prescription drug benefit under many insurance policies and self-funded welfare benefit plans. It is required to dispense drugs as prescribed by physicians and other authorized health care providers, whether or not the drug is manufactured or distributed by its corporate parent.

New York Education Law § 6801(1) (McKinney 2001 and 2003 Supplement) requires registration of wholesalers, such as pharmacy management companies, located in New York State. At present, if the pharmacy management company is physically located outside of New York and mails prescription drugs

into New York, it is not required to be registered. However, effective March 19, 2003, New York Education Law § 6808-b (McKinney 2003 Supplement) will require registration of mail order pharmacies, such as pharmacy management companies.

Zolpidem tartrate is a non-benzodiazepine hypnotic developed for the treatment of chronic insomnia. The inquirer describes it as a controlled substance and its assertion is accepted for the purpose of this opinion. New York Public Health Law § 3302 (McKinney 2002) classifies controlled substances into various schedules, which are congruent with the schedules set forth in the appropriate Federal statute, 21 U.S.C.A. § 812 (West 1999). New York Public Health Law § 3331(5) (McKinney 2002) provides:

No more than a thirty day supply or, pursuant to regulations of the commissioner enumerating conditions warranting specified greater supplies, no more than a three month supply of a schedule II, III or IV substance, as determined by the directed dosage and frequency of dosage, may be dispensed by an authorized practitioner at one time.

The Commissioner of Health has by regulation, N.Y. Comp. Codes R. & Regs. tit. 10, § 80.72(b) (2001), indicated the conditions for which a 90 day supply of drugs may be dispensed. Insomnia is not one of the designated conditions.

When ABC registers in accordance with New York Education Law § 6808-b, it appears that ABC will become an "authorized practitioner" within the meaning of New York Public Health Law § 3331(5) and thus subject to the limitation on the amount of controlled substance it may dispense at any one time.

For further information you may contact Principal Attorney Alan Rachlin at the New York City Office.