Advocacy Alert

Urge Your Lawmakers to Support Essential Health System Designation

California Law Tackles 340B Discriminatory Payer Practices

Faridat Animashaun
October 17, 2023

On Oct. 10, California Gov. Gavin Newsom (D) signed legislation to prevent pharmacy benefit managers (PBMs) from discriminating against 340B Drug Pricing Program providers, joining 28 states that have enacted similar legislation.

SB 786 prohibits PBMs from engaging in certain behaviors, including:

  • Reimbursing 340B covered entities or their contract pharmacies at a lower rate than non-340B entities.
  • Imposing provisions that interfere with a person’s choice to receive 340B drugs from a covered entity or contract pharmacy.
  • Imposing administrative requirements specific to 340B covered entities or contract pharmacies.
  • Refusing to contract with 340B covered entities or their contract pharmacies.

America’s Essential Hospitals continues to track state 340B nondiscrimination legislation and has published a State Snapshot summarizing these developments.

Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.

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