Arkansas Insurance Commissioner Alan McClain temporarily suspended his state's new 340B contract pharmacy law pending a review of its constitutionality.

Hearing Friday on PhRMA’s Push to Quash First State Law to Protect 340B Contract Pharmacy Program

The Arkansas Insurance Department is holding a public hearing this Friday morning on whether it should strike down as unconstitutional the nation’s first state law to address pharmaceutical manufacturer denials of 340B pricing on drugs when they are dispensed by contract pharmacies.

The law, Act 1103 of 2021, says pharmaceutical manufacturers shall not:

  • Prohibit a pharmacy from contracting or participating with an entity authorized to participate in 340B drug pricing by denying access to drugs that are manufactured by the pharmaceutical manufacturer; or
  • Deny or prohibit 340B drug pricing for an Arkansas-based community pharmacy that receives drugs purchased under a 340B drug pricing contract pharmacy arrangement with an entity authorized to participate in 340B drug pricing.

The law’s main thrust is to prohibit discriminatory contracting by commercial payers and pharmacy benefit managers (PBMs) as it relates to the 340B program. Arkansas is one of 16 states have passed laws since 2019 addressing PBM discrimination against 340B covered entities.

Act 1103 was scheduled to take effect on July 28. Pharmaceutical Research and Manufacturers of America (PhRMA) asked State Insurance Commissioner Alan McClain on July 29 to rule on whether the law’s 340B provisions violate the U.S. Constitution. McClain that same day suspended the law’s enforcement for 90 days while the matter was under review. The insurance department notified interested parties by email on Aug. 31 about the Sept. 10 hearing in Little Rock.

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