A last-minute change in the 2021/2022 New York State budget is being hailed as a victory by community health advocates, but viewed by some pharmacists as an obstruction to money they were expecting.

At K&K Pharmacy in Liberty, customer Frances Coar said the owners here, Sam and Hetal Shah, know her better than many of her doctors.

“They care enough to warn you about certain things that aren’t right in your life, that isn’t right with the medicine you’re taking,” Coar said. “What the doctor doesn’t tell you, Sam doesn’t hesitate to tell you.”

The Shahs were expecting a state budget change this year that would have resulted in much needed extra cash. Instead, they said their savings were delayed by two years because of a provision in the state budget.

What You Need To Know

  • New York State has delayed the 340B carve-out, which has elated public health advocates and disappointed some rural pharmacists

  • The two-year delay came after pressure from community health centers and state lawmakers

  • A separate bipartisan group of lawmakers wants the carve-out to take effect

The Shahs said they spent significant money to help customers during the pandemic and need the relief to expand their services.

“We’ve gone to several people’s homes to do vaccinations,” Sam Shah said. “We’ve done clinics, as well. Those are all extra costs, but we happily do it for the community.”

Instead, through an exemption, the state is putting off plans to remove pharmacy benefits managers (PBM) from the discount drug supply chain, and is no longer switching to fee-for-service model.

If not for the delay of the commonly known ‘340B carve-out,’ the state would have begun buying the discount drugs without negotiations through a PBM, and reinvesting the savings.

The setback of the carve-out was like “the rug being pulled out from under them,” said state Senator Mike Martucci, who represents the Shahs.

“Last year, legislation was passed that would finally level the playing field,” Martucci said Monday during a Zoom interview. “This legislature took action to correct that problem. For reasons that are unclear to me, our pharmacists got a raw deal in this budget, where that was kicked down the road.”

According to past updates from Governor Andrew Cuomo’s administration, state health officials said the carve-out was necessary for transparency, negotiating power and an expected cost-savings of up to $90 million.

Several other lawmakers wrote to Governor Cuomo in January, asking for the delay.