Advocacy Alert

Urge Your Lawmakers to Support Essential Health System Designation

New Mexico Tackles 340B Discriminatory Payer Practices

Faridat Animashaun
April 11, 2023

On April 7, New Mexico Gov. Michelle Lujan Grisham (D) signed legislation to prevent pharmacy benefit managers (PBMs) from discriminating against 340B Drug Pricing Program providers.

Since a 2020 U.S. Supreme Court decision, states have been able to regulate PBM reimbursement practices directly, including by protecting 340B providers from discriminatory practices. New Mexico is the first state to enact such a law this year and joins 23 states that have acted to combat discriminatory payer practices. The act, comparable to other state laws, prohibits PBMs from engaging in certain behaviors, including:

  • Reimbursing 340B covered entities at a lower rate than non-340B entities.
  • Charging fees to 340B covered entities that aren’t charged to non-340B entities.
  • Imposing provisions that interfere with a person’s choice to receive 340B drugs from a covered entity.
  • Imposing administrative requirements specific to 340B covered entities.

Connecticut, Iowa, Mississippi, Missouri, Montana, Oregon, Rhode Island, and Texas legislatures have introduced measures to target discriminatory PBM practices within the 340B program this year.  Legislation in Connecticut, Kansas, Mississippi, and Missouri includes language that would outlaw drug manufacturers’ conditions on 340B sales when entities use 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.

Keep up with the pulse of America's Essential Hospitals

Members: Sign up for email updates.