Connecticut will not, after all, be the first state to require 340B covered entities to file reports on their 340B program savings and how they use them, under a bill the state Senate gave final passage to late last night.
Earlier this week, the state House also stripped the bill—introduced by Gov. Ned Lamont (D) in February— of language that would have barred drug manufacturers from limiting use of contract pharmacies and imposing other conditions on 340B drug sales.
The Louisiana Senate on Sunday passed a bill prohibiting drug manufacturer limits on 340B contract pharmacy relationships. It was officially sent yesterday to Gov. John Bel Edwards (D). Covered entity representatives say he is expected to sign it. Arkansas for now is the only state with a comparable 340B contract pharmacy law.
The Louisiana bill also prohibits pharmacy benefit manager and health insurer practices that lower health care providers’ reimbursement for 340B-acquired drugs. Roughly two dozen states have passed similar laws since 2019.
The Connecticut bill that the state Senate passed last night also includes similar 340B-related prohibitions directed at PBMs and payers.
The final bill’s 340B nondiscrimination language says after Jan. 1, 2024, a contract between a Connecticut 340B covered entity and a PBM may not contain:
- A reimbursement rate for a prescription drug that is less than the reimbursement rate paid to pharmacies that are not 340B covered entities
- A fee or adjustment that is not imposed on providers or pharmacies that are not 340B covered entities
- A fee or adjustment amount that exceeds the fee or adjustment amount imposed on providers or pharmacies that are not 340B covered entities
- Any provision that prevents or interferes with a patient’s choice to receive a prescription drug from a 340B covered entity, including the administration of the drug
- Any provision that excludes a 340B covered entity from pharmacy benefit manager networks based on the 340B covered entity’s participation in the 340B program.
The final bill says a pharmacy benefits manager may not consider whether an entity is a 340B covered entity when determining reimbursement rates, and may not retaliate against a 340B covered entity based on its exercise or any right or remedy under the law. It authorized the state Insurance Commissioner to adopt implementing regulations.
Deleted transparency language
As introduced by Lamont, the bill would have required just 340B hospitals to annually file with the state:
- a list of manufacturers from whom the hospital bought drugs through 340B
- a list of such drugs categorized by quantity, actual purchase price, and 340B ceiling price
- the reimbursement amount by each payer categorized by manufacturer, quantity, actual purchase price, and ceiling price
- “the difference in cost for each covered outpatient drug, identified by such drug’s National Drug Code number, due to the difference in the ceiling price or actual price paid, and the actual price paid by any patient or payer”
- “a summary providing how the difference in cost” as described in the preceding bulleted item “was applied for the benefit of the community.”
Lamont’s office announced Monday that he and the Connecticut Hospital Association reached an agreement on less onerous bill language about “providing information publicly on how savings derived from [340B] helps support healthcare services for low-income residents.”
An amendment was filed in the House Tuesday morning, and later adopted, to require all of the state’s 340B covered entities, not just 340B hospitals, to annually report:
- the difference between what it estimates it would have paid during the preceding year for covered outpatient drugs outside of 340B and what it paid for those drugs through 340B
- a summary of how it used the “acquisition cost differential … to leverage scarce federal resources to reach more eligible patients and provide more comprehensive services to such patients.”
Community health centers reportedly were trying midweek to be excluded from the requirement on the grounds that, unlike 340B hospitals, they argue that they are already subject to stringent federal reporting and accountability requirements governing use of 340B program earnings.
Ultimately, all reporting requirements for all 340B covered entity types were dropped from the bill.
Deleted contract pharmacy language
The amendment filed in the House Tuesday also dropped Lamont’s original bill language that would have required drug manufacturers to comply with 340B statutory requirements when selling 340B drugs in the state and “not impose any preconditions, limitations, delays or other barriers” to drug purchases that are not required by the 340B statute. Forbidden practices would have included:
- restricting the number or type of locations through which covered drugs may be dispensed by or on behalf of a 340B covered entity
- conditioning 340B drug sales on enrollment with third-party vendors or on the sharing of claims information or other data
- charging above 340B ceiling price and making entities request rebates in lieu of discounts
- interfering with an individual’s choice to receive a covered drug from an entity or a contract pharmacy
- delaying shipment of 340B drugs
- retaliating against covered entities or pharmacies for exercising their rights under the legislation.
This section’s removal was a major political victory for drug manufacturers.
State 340B evaluation and report
Lastly, the final bill directs the state Commissioner of Social Services to convene a working group to evaluate:
- the 340B program’s current status
- national efforts to strengthen 340B
- “opportunities for state action to protect 340B revenues of federally qualified health centers from unfair administrative barriers or unnecessary conditions based on such centers’ status as a 340B covered entity.”
The evaluation must consider:
- the ability of and any legal precedent for states to regulate the conduct of drug manufacturers and pharmacy benefits managers
- opportunities to facilitate patient access to on-site pharmacies of a federally qualified health center
- opportunities to establish on-site pharmacies across federally qualified health centers
- national trends to sustain the 340B program.
The social services commissioner must report the finding by Jan. 31, 2024, to the legislature’s joint committees that deal with insurance, public health, and human services.