Editor’s Note: In a new survey, Manatt examines 340B anti-discrimination legislation in all 50 states. Highlights are below. For more information on accessing the full survey—available on its own or through a subscription to Manatt on Health, Manatt’s premium information service—please contact Barret Jefferds at bjefferds@manatt.com. And remember to sign up now for Manatt’s new webinar—Understanding the 340B Program: A Guide to the Newest Developments. The webinar will share the survey’s findings, explain the impact of the Inflation Reduction Act’s drug pricing provisions on the 340B program, review manufacturer restrictions on 340B drug shipments to contract pharmacies and more. Click here to learn more and register free.
The 340B Drug Pricing Program, which was enacted in 1992 by Section 340B of the federal Public Health Services Act, requires pharmaceutical manufacturers that participate in the Medicaid program to provide covered outpatient drugs at significantly reduced prices to certain health care providers and programs, referred to as “covered entities.” 340B covered entities include several types of hospitals, federally qualified health centers, and other categories of health care providers specified in the 340B statute. Covered entities may dispense 340B outpatient drugs through their in-house pharmacies or through contract pharmacies. Supporters of the 340B program believe that it is vital to helping hospitals and other covered entities care for their uninsured and underinsured patients, while critics believe that it is being abused.
Over the past several years, often in response to concerns expressed by covered entities, a growing number of states have proposed and/or enacted legislation prohibiting health plans and pharmacy benefit managers (PBMs) from engaging in certain practices with respect to 340B covered entities and their contract pharmacies, including prohibitions on:
- Reimbursing covered entities and/or contract pharmacies less for 340B drugs than for non-340B drugs;
- Limiting participation by 340B contract pharmacies in plan networks;
- Charging fees to 340B covered entities and/or contract pharmacies that aren’t charged to non-340B entities; and
- Imposing administrative requirements specific to 340B covered entities or contract pharmacies, such as requiring them to use claim modifiers to identify 340B drugs.
In a new survey, Manatt tracks 340B anti-discrimination legislation by state. The in-depth analysis examines state statutes across all 50 states that prohibit health plans and PBMs from engaging in certain practices with respect to 340B covered entities and their contract pharmacies. The survey provides insights on:
- Proposed and enacted legislation
- The types of prohibitions imposed by such legislation
- The target of such prohibitions (e.g., insurers, PBMs)
- Potential penalties for violations of these prohibitions
Survey Highlights
Manatt’s analysis found that:
- More than half of all states had either proposed or enacted legislation to address at least one facet of these practices
- The most common policies found across the states were prohibitions on:
- Reimbursing covered entities and/or contract pharmacies less for 340B drugs than for non-340B drugs
- Limiting participation by 340B contract pharmacies in plan networks
- Charging fees to 340B covered entities and/or contract pharmacies that aren’t charged to non-340B entities
- Imposing administrative requirements specific to 340B covered entities or contract pharmacies, such as requiring them to use claim modifiers to identify 340B drugs
