New York going into $2 billion action against opioid industry
Topics: NEW YORK OPIOD
This is to secure $2 billion for New York consumers who have shouldered the cost of the ongoing opioid epidemic in the form of higher insurance premiums.
The Department of Financial Services has determined that New York consumers have overpaid an estimated $2 billion in insurance premiums over the past 10 years.
This overpayment is due to the costs associated with opioid manufacturers misrepresenting the safety and efficacy of opioids which in turn has resulted in the over-prescription of opioids, additional addiction treatment and treatment of other adverse health effects associated with opioid addiction.
DFS will seek fines and restitution from the opioid industry, and is directing insurers to fully cooperate with these actions.
Additionally, DFS will be holding hearings across the state to expose the problem to consumers and generate transparency with respect to the impact on the health insurance system.
DFS has issued subpoenas and other document requests to opioid manufacturers and distributors, New York State-licensed insurers and pharmacy benefit managers or PBMs to seek restitution against the industry as thousands of small businesses and millions of New Yorkers shelled out over a billion dollars in rising premiums and their costs borne from the opioid crisis.
To date, PBMs generally have not been a focus among opioid investigations across the country.
PBMs are third-party administrators or the "middlemen" between opioid manufacturers and insurers.
They set the multi-tier list of prescription drug coverage provided under insurance policies, and negotiate rebates and credits paid by manufacturers and distributors.
DFS has received information that some PBMs may have been paid rebates by opioid drug manufacturers, opioid drug wholesalers or opioid drug distributors in exchange for placement of an opioid prescription drug in a favorable drug formulary tier with lower co-pays which can under certain circumstances violate federal and state health insurance regulations. ■