Advocacy Alert

Urge Your Lawmakers to Support Essential Health System Designation

State Legislation Combats 340B Discriminatory Payer Practices

Faridat Animashaun
June 26, 2023

Connecticut, Iowa, Louisiana, and Nevada enacted legislation to protect 340B Drug Pricing Program providers from discriminatory pharmacy benefit manager (PBM) practices, joining 24 states that have enacted similar legislation.

Connecticut Gov. Ned Lamont (D), Iowa Gov. Kim Reynolds (R), and Nevada Gov. Joe Lombardo (R) signed bills that prohibit PBMs (and in some states, insurers, third party administrators (TPAs), and other third-party payers) from engaging in certain behaviors, including:

  • Reimbursing 340B covered entities or their contract pharmacies at a lower rate than non-340B entities.
  • Charging fees to 340B covered entities or their contract pharmacies that are not charged to 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.

In Louisiana, Gov. John Bel Edwards (D) on June 12 signed HB548, which, in addition to protecting 340B providers from discrimination by PBMs, prohibits drug manufacturers from interfering with the acquisition of a 340B discounted drug by a pharmacy that is under contract with a 340B covered entity.

Louisiana is the second state, after Arkansas, to enact a law regarding manufacturer conditions on delivery of 340B-acquired drugs to contract pharmacies. These laws are in response to the actions of 23 manufacturers that have imposed restrictions on the use of 340B drugs at contract pharmacies. The pharmaceutical industry is challenging Arkansas’ contract pharmacy law in federal court.

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

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