Lowering Drug Costs: Governor Hochul Issues New Regulations to Protect Consumers From 'Middlemen' Who Hike the Cost of Prescription Medication

New York Will Adopt New Regulations For Pharmacy Benefit Managers, Guarding Against Business Practices That Lead to Higher Prices for Consumers

Regulations Will Also Protect Small Businesses and Family-Owned Pharmacies by Leveling The Playing Field Across the Industry

In 2021, Governor Hochul Signed Landmark Legislation to Regulate Pharmacy Benefit Managers and Protect Consumers 

Governor Kathy Hochul announced new State regulations to protect New Yorkers from sky-high drug costs by taking on business practices that lead to higher costs for consumers. New York will adopt new market conduct regulations to govern the Pharmacy Benefit Managers operating in New York State, helping to protect New Yorkers’ access to prescription drugs, prohibiting business practices that increase the cost of certain drugs, and ensuring that small, independent pharmacies compete on a fair playing field with large pharmacies affiliated with Pharmacy Benefit Managers.

"New Yorkers deserve access to affordable and fair-priced prescription drugs, and today's regulations ensure that consumers and small pharmacies are protected from unfair business practices,” Governor Hochul said. “We are leveling the playing field for independent pharmacies, while promoting competition and empowering consumers. These new measures will improve access to essential medications, eliminate anti-competitive practices, and make certain that the health care system works for everyone, not just the big players."

In 2021, Governor Hochul signed landmark legislation to bring transparency and a comprehensive regulatory structure to otherwise unregulated Pharmacy Benefit Managers (PBMs). The legislation requires licensure for PBMs and specifies their duties and obligations as service providers. This piece of legislation also allows the Department of Financial Services to receive complaints when a PBM violates the law and will ensure PBMs abide by standards established by law and regulation.

Additionally, Governor Hochul directed the Department of Financial Services (DFS) to develop regulations that would address conflicts of interest and unfair claims practices by these companies.

The market conduct regulations require the following:

• Allow Home Delivery – Prohibit PBMs from barring any in-network pharmacies from providing mail order or delivery services, which will increase patients’ access to home delivery from their community pharmacy;
• List Pharmacy Directories – Increase transparency to consumers and employers by requiring PBMs to list formularies and pharmacy directories online, and prohibiting PBMs from punishing a consumer who relies on said information;
• Address Consumer Inquiries – Require PBMs to post a telephone number and email address for consumers to direct their questions to, and PBMs must respond in a reasonable amount of time;
• Prohibit Steering – Prohibit anti-competitive practices that steer consumers away from their community pharmacy to larger pharmacies affiliated with the PBM;
• Treat Pharmacies Fairly – Prohibit PBMs from unfairly passing losses onto pharmacies when the PBM mistakenly approved dispensing a drug and then seeks to retroactively deny reimbursement to the pharmacy;
• Allow Electronic Submissions – Reduce administrative burdens and costs on small pharmacies by allowing them to submit information to and receive information from PBMs electronically; and
• Apply Same Standards – Prevent the abuse of audits against small pharmacies who are not affiliated with a PBM by requiring PBMs to apply the same audit standards across all in-network pharmacies.

A copy of the adopted regulations can be found on the Department’s website. They will be published in the State Register on November 27, 2024.

Pharmacist Society of the State of New York President Danny Dang said, “The Pharmacists Society of the State of New York (PSSNY) has been in support of the registration and regulation of pharmacy benefit managers (PBM) for decades. Our members have seen the results of PBM abuses and the unfair treatment of patients and pharmacists. PSSNY wholeheartedly supports the adoption of the new DFS regulations and thanks Governor Hochul for taking what we hope is a first step in protecting the public and pharmacists.”

The public is reminded that the DFS Pharmacy Benefits Bureau is always available to accept and investigate complaints of PBM misconduct via email at PBM@dfs.ny.gov. Additionally, DFS is empowered to investigate significant spikes in the price of prescription drugs. Anyone experiencing a spike in the cost of drugs is encouraged to reach out at drugpricespikes@dfs.ny.gov.

MAYOR ADAMS AND GOVERNOR HOCHUL CELEBRATE AGREEMENT TO ADVANCE HISTORIC PLAN TO BUILD AFFORDABLE HOUSING, INVEST $5 BILLION IN INFRASTRUCTURE AND HOUSING

 

New York City Council Subcommittee on Zoning and Franchises and Committee on Land Use Vote to Approve City of Yes, Most Pro-Housing Set of Zoning Changes in City History 

  

Proposal Will Build up to 80,000 New Homes Over Next 15 Years, Invest Billions Towards Critical Infrastructure Updates 

New York City Mayor Eric Adams and New York Governor Kathy Hochul today celebrated an agreement on the “City of Yes for Housing Opportunity” proposal, a historic zoning proposal to enable the creation of a “little more housing in every neighborhood,” and invest $5 billion towards critical infrastructure updates and housing. The announcement comes after the New York City Council Subcommittee on Zoning and Franchises and Committee on Land Use’s vote to approve this proposal. As New York City faces a generational housing crisis with just a 1.4 percent rental vacancy rate, the proposal would allow for the creation of up to 80,000 new homes over the next 15 years and help lower the cost of rent for New Yorkers across the five boroughs. The City of Yes proposal alone exceeds all the housing created from rezonings during the 12 years of the Bloomberg administration and the eight years of the de Blasio administration.  

  

“Everyday New Yorkers have carried the burden of a generational housing crisis for far too long. Today, in partnership with Governor Hochul, Speaker Adams, and Chairs Salamanca and Riley, we are one step closer to delivering long overdue relief through the ‘City of Yes for Housing Opportunity,’” said Mayor Adams. “Thanks to our shared commitment in building critically-needed housing, we have reached an agreement on a historic plan that could open the doors to a little more housing in every neighborhood in our city — with no borough, block, or backyard left behind. If passed, New York City will, once again, serve as a model to the nation on government’s infinite ability to take challenges head-on, set forth a bold agenda, and get the job done. To my partners in the City Council, let’s say ‘yes’ to City of Yes.” 

  

“New York has a housing affordability crisis and there's only one way out: build more housing,” said Governor Hochul. “That's why earlier this year, I fought tooth-and-nail for a major package of reforms and investments that will build thousands of new homes for everyday New Yorkers. We got it done, in part, because of strong partnerships with our colleagues in New York City, and I'm proud to stand with them as they move forward with their plan to build a little more housing in every neighborhood. Now, we're adding a $1 billion state commitment to support affordable housing in New York City. We need all hands-on deck to build more housing and make New York more affordable for all of us.” 

  

City of Yes for Housing Opportunity invests $5 billion towards the city’s housing and critical infrastructure updates. Mayor Adams is committing $1 billion for housing capital. He is also investing $2 billion in infrastructure projects — to be reflected in upcoming financial plans — that will support investments in sewer and flood infrastructure, street improvements, and open space. Finally, Mayor Adams will spend $1 billion in expense funding over 10 years in tenant protection, voucher assistance and combatting source-of-income discrimination, flood monitoring, and neighborhood planning. Additionally, thanks to her strong leadership and shared commitment to building housing, Governor Hochul is committing another $1 billion to housing capital over the next five years, subject to state budget approval.  

  

Mayor Adams and New York City Council Speaker Adrienne Adams have made historic investments toward creating affordable housing over the last three years. In June, City Hall and the City Council agreed on an on-time, balanced, and fiscally-responsible $112.4 billion Fiscal Year (FY) 2025 Adopted Budget that invests $2 billion in capital funds across FY25 and FY26 to the New York City Department of Housing Preservation and Development and the New York City Housing Authority’s capital budgets. In total, the Adams administration has committed a record $26 billion in housing capital in the current 10-year plan as the city faces a generational housing crisis. This past spring, the city celebrated the largest 100 percent affordable housing project in 40 years with the Willets Point transformation.  

High-Ranking Mexican Cartel Leader Arrested on Charges of International Drug Trafficking and Money Laundering After Faking Own Death to Live in California Under Assumed Identity

 

A federal court in the Central District of California unsealed a criminal complaint yesterday charging Cristian Fernando Gutierrez-Ochoa — a high-ranking member of the Cártel de Jalisco Nueva Generación (CJNG) and the son-in-law of the CJNG’s leader, Nemesio Oseguera Cervantes, also known as El Mencho — with international drug trafficking and money laundering offenses. Gutierrez-Ochoa was arrested in Riverside, California, on Nov. 19.

“The Jalisco Cartel — one of the world’s most violent and prolific drug trafficking organizations — is weaker today because of the tenacious efforts of law enforcement to track down and arrest a cartel leader who allegedly faked his own death and assumed a false identity to evade justice and live a life of luxury in California,” said Deputy Attorney General Lisa Monaco. “As these charges allege, Gutierrez-Ochoa directed the trafficking of lethal narcotics, causing untold destruction in our communities. To those seeking to harm Americans and to profit from their pain, this arrest should serve as a reminder — we will find you and bring you to justice.”

“Over the last decade, Cristian Gutierrez-Ochoa, a close associate of CJNG’s top leader, allegedly directed the importation of tons of methamphetamine and cocaine into the United States and engaged in violence to aid the cartel’s criminal activities,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The Criminal Division is committed to disrupting and dismantling Mexican drug trafficking organizations. Tuesday's arrest sends a powerful message to cartel leadership: we will work tirelessly with our domestic and international law enforcement partners to hold them accountable.”

“Defeating the two cartels responsible for the deadly drug crisis in the United States is the Drug Enforcement Administration (DEA)’s top operational priority, and with the arrest of Cristian Fernando Gutierrez-Ochoa, we are much closer,” said DEA Administrator Anne Milgram. “We allege that Gutierrez-Ochoa, a high-ranking member of the CJNG and the son-in-law of El Mencho, conspired to import thousands of kilograms of cocaine and methamphetamine into the United States on behalf of the Jalisco Cartel. The Jalisco Cartel is responsible for unprecedented violence in Mexico and helping to fuel the deadly drug crisis in the United States. The DEA is relentlessly committed to defeating the Jalisco Cartel, and we will exhaust every tool in the justice system to fight back, to save American lives, and to bring this cartel to justice.”

According to court documents, Gutierrez-Ochoa, 37, is alleged to have started working for the CJNG, one of the most violent drug cartels in Mexico, in around 2014, and to have personally coordinated the transportation and distribution of approximately 40,000 kilograms of methamphetamine and approximately 2,000 kilograms of cocaine in Mexico, all destined for the United States.

Gutierrez-Ochoa allegedly furthered CJNG’s drug trafficking and money laundering activities through violence. In around November 2021, Gutierrez-Ochoa allegedly kidnapped two members of the Mexican Navy in an attempt to secure the release of El Mencho’s wife, who had been arrested by Mexican authorities. After being sought by Mexican authorities, Gutierrez-Ochoa allegedly fled into the United States, assumed a fictitious identity, and resided in a luxury residence in Riverside, California, purchased by CJNG’s money laundering operatives with drug trafficking proceeds.

According to court documents, El Mencho may have assisted Gutierrez-Ochoa in his scheme to fake his own death by telling associates that El Mencho murdered Gutierrez-Ochoa for lying. This helped Gutierrez-Ochoa sneak into the United States to be with El Mencho’s daughter. The Justice Department returned a superseding indictment  against El Mencho in April 2022, charging him with leading a continuing criminal enterprise to manufacture and distribute fentanyl for importation into the United States. The U.S. Department of State is offering a reward of up to $10 million for information leading to his arrest and/or conviction. El Mencho remains a fugitive.

Gutierrez-Ochoa is charged with conspiracy to distribute five kilograms or more of cocaine and 500 grams or more of methamphetamine, knowing, intending, and having reasonable cause to believe that those controlled substances would be unlawfully imported into the United States. Gutierrez-Ochoa is also charged with conspiracy to launder CJNG’s drug trafficking proceeds. If convicted, he faces a mandatory minimum penalty of ten years in prison and a maximum penalty of life in prison on the drug distribution conspiracy charge, and a maximum penalty of 20 years in prison on the money laundering conspiracy charge. A federal district court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The DEA Los Angeles Field Division is investigating the case.

Trial Attorneys Lernik Begian and Doug Meisel of the Criminal Division’s Narcotic and Dangerous Drug Section are prosecuting the case. The U.S. Attorney’s Office for the Central District of California provided valuable assistance.

This case is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level drug trafficking organizations and other criminal networks that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local enforcement agencies. Additional information about the OCDETF Program can be found at www.justice.gov/OCDETF.

A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

ICE Supervisory Deportation Officer Arrested For Identity Theft And Disseminating Confidential Government Records

 

Damian Williams, the United States Attorney for the Southern District of New York, and James E. Dennehy, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the arrest of HENRY YAU for charges in connection with a scheme to commit identity theft, convert government records, and disclose agency records containing individually identifiable information.  YAU was arrested this morning and will be presented today before U.S. Magistrate Judge Stewart D. Aaron. 

U.S. Attorney Damian Williams said: “Henry Yau, a supervisory law enforcement officer within U.S. Customs and Immigration Enforcement, allegedly engaged in a years-long scheme to disseminate non-public and sensitive information from law enforcement databases to friends and acquaintances.  Among other things, Yau allegedly tipped off an individual who was being investigated by the FBI; disclosed sensitive and non-public information from immigration and law enforcement databases; and, most egregiously, offered to use his authority as an ICE officer to arrest specific people at the request of, and as favors to, his friends.  As I have said before, public service is a privilege, not a right, and the career prosecutors of this Office and our law enforcement partners will never stop investigating those who seek to abuse that privilege.” 

FBI Assistant Director in Charge James E. Dennehy said: “Henry Yau, a supervisory ICE deportation officer, allegedly disclosed confidential law enforcement information of more than two dozen individuals to unauthorized recipients for personal and financial gain.  This alleged abuse of authority to satisfy unwarranted personal favors erodes the public's trust.  The FBI maintains its steadfast commitment to hold accountable all government officials who engage in unscrupulous behavior infringing on the privacy and rights of others.”

According to the allegations in the Complaint unsealed today in Manhattan federal court:[1]

YAU was a Supervisory Deportation Officer with U.S. Immigration and Customs Enforcement (“ICE”), which is a law enforcement agency within the U.S. Department of Homeland Security (“DHS”).  ICE’s stated mission includes protecting the U.S. through criminal investigations and enforcing immigration laws to preserve national security and public safety.  Between in or about 2015 and in or about November 2024, YAU was employed as a Deportation Officer with ICE.  In or around September 2021, YAU was promoted to Supervisory Deportation Officer.  YAU was assigned to the ICE New York Field Office, located in Manhattan.  As an ICE Deportation Officer, YAU was given access to several password-protected law enforcement databases operated by DHS and other law enforcement agencies, including U.S. Customs and Immigration Service (“USCIS”) databases containing the status of immigration-related applications filed by aliens, U.S. Customs and Border Protection (“CBP”) databases containing information about border crossings, criminal history databases containing people’s arrest and conviction records, and ICE databases containing records relating to arrests and removals of aliens from the U.S.

From at least in or about 2017 through at least in or about 2023, YAU participated in schemes to disseminate confidential government information from law enforcement databases, including multiple databases maintained by ICE, CBP, and USCIS. YAU disseminated this confidential government information to friends and acquaintances for his own personal and financial gain.  In total, YAU improperly disseminated confidential government information relating to approximately 28 individuals, at least.  This information came from DHS databases, and YAU disclosed it without any apparent law enforcement purpose to at least approximately 12 non-law enforcement personnel, including, among others: Tommy Lin, a former Director of Constituent Services within the New York City Mayor’s Office[2]; a former candidate for New York City Council and New York State Assembly (“CC-1”); a former target of a fraud investigation being conducted by the FBI in California (“CC-2”); and a former business partner (“CC-3”).

Between in or about 2019 and in or about 2020, YAU agreed to and did disclose confidential information from law enforcement databases about an individual (“Victim-1”) that Lin was seeking to have arrested and deported from the U.S. because Victim-1 had conflict with members of a bank fraud conspiracy in which Lin was involved.  YAU shared with Lin a copy of a Field Operations Worksheet containing personal identifying information about Victim-1.  YAU then arrested Victim-1 and sent Lin photographs of Victim-1, handcuffed, following the arrest.  In connection with this scheme, Lin earned approximately $20,000 in cash.

Between in or about 2019 and in or about 2021, YAU agreed to and did disclose confidential information from immigration databases to CC-1 on multiple occasions, including information about the status of USCIS’s investigation of the permanent resident application of a particular individual (“Victim-2”) and the immigration status of another individual (“Victim-3”).

Between in or about 2018 and in or about 2020, YAU agreed to and did disclose confidential information from law enforcement databases to CC-2 on multiple occasions, including information about whether CC-2 would be potentially arrested by law enforcement at the border when entering or leaving the U.S. In or about January 2020, YAU disclosed to CC-2 that CC-2 was being investigated by law enforcement agents in California.

Between in or about 2019 and in or about 2021, YAU agreed to and did disclose confidential information from law enforcement databases to CC-3 on multiple occasions, including information about the immigration status of an individual (“Victim-3”), who YAU offered to arrest for CC-3.  YAU also disclosed to CC-3 non-public information from law enforcement databases regarding the immigration status of another individual (“Victim-4”) and information about the border crossings of another individual (“Victim-5”) into and out of the U.S.

YAU, 41, of New York, New York, is charged with one count of identity theft conspiracy, which carries a maximum sentence of 15 years in prison; four counts of conspiracy to convert government records and property and disclose agency records containing individually identifiable information, each of which carries a maximum sentence of one year in prison; one count of conversion of government records and property, which carries a maximum sentence of one year in prison; and one count of disclosure of agency records containing individually identifiable information, which carries a maximum sentence of one year in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the investigative work of the FBI. Mr. Williams also thanked the DHS Office of Inspector General and the New York City Department of Investigation for their assistance in the investigation of this case.  

This case is being handled by the Office’s Violent & Organized Crime Unit. Assistant U.S. Attorneys Andrew K. Chan, James Ligtenberg, and Ni Qian are in charge of the prosecution. 

The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

 

[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.

[2] As of the date of this Complaint, Lin is charged in United States v. Tommy Lin et al., S7 23 Cr. 572 (CM), with participating in a bank fraud conspiracy, in violation of 18 U.S.C. § 1349, and aggravated identity theft, in violation of 18 U.S.C. §§ 1028A and 2. 

Your Weekly Update from Councilwoman Kristy Marmorato

 

Latest News from Councilwoman Marmorato!

Welcome to our Weekly Newsletter!

Dear Friends/Neighbors,

This week, I was downtown at City Hall to cast my votes on proposed legislations and resolutions, including the passage of my first resolution!

Additionally, it was another busy week in our district, where I proudly presented a $4M check to fund the City Island Library. In this newsletter, you can read up on the other events I've been up to in District 13, and what upcoming events we have planned for you!

As always, if you need help with a City Agency contact my office at:

718-931-1721. We are open from Monday - Thursday 9 AM - 5 PM and Fridays from 9 AM - 2 PM. We offer FREE casework services to help our residents of District 13.

Si necesita ayuda con una Agencia de la Ciudad, llame a mi oficina al:  718-931-1721. Estamos abiertos de lunes a jueves de 9 a.m. a 5 p.m. y los viernes de 9 a.m. a 2 p.m. Ofrecemos servicios de asistencia GRATUITOS para ayudar a nuestros residentes del Distrito 13. 

It is an honor to represent you in the New York City Council.

Sincerely,

Councilwoman Kristy Marmorato

District 13, Bronx

Fighting for Recognition for our Vietnam Veterans, Reso 441 - PASSED!

On November 13th, Councilwoman Marmorato's officially passed her first sponsored resolution during the New York City Council's stated meeting!

Her resolution, Reso 441, will designate March 29 of each year as Vietnam Veterans Day in the City of New York. This resolution was inspired by one of our own District 13 constituents, Oscar Ruiz, with the purpose to honor the bravery and sacrifice of the Americans who served in Vietnam, while also recognizing the ongoing dedication of their families and caregivers. This is just one of the many ways that the Congresswoman plans to fight for recognition for our veterans.

To watch her remarks during the Veterans Committee, click here.

Check Presentation: $4 Million to the City Island Library!

Councilwoman Marmorato proudly presented a $4 million investment for the City Island Library, in collaboration with the New York Public Library (NYPL) at the City Island branch. This funding will allow for the City Island Library to make necessary updates to their HVAC system and provide a comfortable place for patrons of the library.

To read her press release on this event, you can click here.

Cha-Ching: $10K allocated for FIAME!

Councilwoman Marmorato is fulfilling her commitment to investing in District 13!

Last Thursday, she presented a check for $10,000 allocated to the for the Forum of Italian American Educators.



A huge shout out to these fantastic educators who are making a remarkable impact in our district in educating our youth!

Meeting @ Pelham Parkway Houses

On November 14th, Councilwoman Marmorato stopped by NYCHA's Pelham Parkway Houses to speak with residents. Thank you to all of the residents who attended this meeting. We are continuously working for our NYCHA residents to ensure that they get the resources they need! This including working towards having a monthly food pantry Touring Montefiore Councilwoman Marmorato toured Montefiore Medical Group at their East Bronx location! It was a pleasure to talk to staff members and witness the incredible work that this local medical group is doing to serve our community. Composting Q&A with DSNY Last Friday, we held our Composting Q&A at the District Office. We extend our gratitude to all who attended our Q&A event, and a special thank you to the Representative from DSNY for addressing questions from our constituents and helping them to be more informed on DSNY changes and their composting initiatives! Food Pantry at the Vataj Building

On Friday, Nov 15th, Councilwoman Marmorato and her staff distributed over 250 bags of food for our District 13 constituents at the Vataj building.

During this season of giving, we are on a mission to make sure that our community has extra food and resources - lets share the joy of the holidays!

More in the Community!

New Business in D13! Last Friday, Councilwoman Marmorato joined a grand opening celebration to welcome a new business in Little Yemen! Congratulations once again to Kyan on your grand opening! We wish you many many years of success and prosperity!

Last Thursday, Councilwoman Marmorato attended a town hall hosted by friends of Pelham Parkway in collaboration with the Allerton Avenue Homeowners and Tenants Association. Shout out to the work by the NYC E-Vehicle Safety Alliance for their commendable efforts in advocating for regulations, enforcement, & e-vehicle education!

Legislative Updates This Week

Here is how Councilwoman Marmorato voted at the November 13th Stated Meeting:

Intro 360A: A Local Law to amend the administrative code of the city of New York regarding rental property fees – NO

Intro 1088A: A Local Law to establish a charter revision commission – YES

Intro 130A: A Local Law to establish composting facilities in parks – YES

Intro 663A: A Local Law to amend newsrack requirements – YES

Reso 441: Designating March 29 as Vietnam Veterans Day in NYC – YES

Reso 13: Designating the second Friday in March as Social and Emotional Learning Day in NYC – YES

Reso 95: Calling for a curriculum focused on religious diversity – YES

Upcoming Events

Councilwoman Kristy Marmorato | 718-931-1721|District13@council.nyc.gov