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Requiring drug manufacturers “to sell to contract pharmacies at the 340B discount is price-fixing,” the American Legislative Exchange Council says.

Influential Group that Offers Conservative Model Bills to State Lawmakers Wades into 340B Debate

Requiring drug manufacturers “to sell to contract pharmacies at the 340B discount is price-fixing,” an influential source of model bills for conservative state lawmakers says in a new post on its website.

“Legislators understandably worry about the cost of prescription drugs and making sure their constituents have access to the medicines they need,” writes Brooklyn Roberts, senior director of the American Legislative Exchange Council health and human services task force, in a Feb. 28 article on ALEC’s site. “However, fixing the price of drugs is not the way to accomplish that goal.”

ALEC claims nearly one-quarter of all state legislators as members. It is best known for its archive of model bills, resolutions, and statements that conservative state legislators can easily adapt and introduce—a resource that has made it a political powerhouse at the state level.

Common Cause and other progressive groups say big business controls ALEC’s agenda. ALEC says it gives state elected officials a platform to collaborate with like-minded business leaders. Ken McKay, Pharmaceutical Research and Manufacturers of America (PhRMA) national vice president for state government affairs, is listed as a member of ALEC’s private enterprise advisory council, whose members meet jointly with ALEC’s board of directors but do not have votes on the board.

ALEC currently does not have a model bill or policy on 340B, Roberts said. She said she wrote about 340B out of concern about bills passed and introduced in states this year and last year on 340B contract pharmacy and “making sure patients are benefitting from the program.”

Roberts wrote that 340B’s purpose “is to pass along” to uninsured individuals the drug discounts that manufacturers give to entities that serve low-income individuals not covered by Medicare and Medicaid.

“Last year Arkansas passed legislation mandating drug manufacturers sell to all contract pharmacies at the 340B rate and preventing claims modifier requirements,” Roberts said. “Essentially the state was expanding the 340B program beyond what is in the federal statute, which does not address contract pharmacies. Despite several lawsuits to clarify the requirements of the federal statute and the issue of contract pharmacies, other states have tried to pass similar legislation this year.”

“Requiring manufacturers to sell to contract pharmacies at the 340B discount is price-fixing,” she said. “Unfortunately, many legislators on both sides of the aisle don’t see it that way. Government fixed prices of prescription drugs will not benefit the patients. Instead, it will cost us cures, innovation, and research from the pharmaceutical industry.”

“Opportunities for meaningful reform exist for policymakers to consider methods to provide rebates directly to patients, rather than pharmacies,” Roberts said. “As to 340B,” she said, policymakers should look for ways to stop “hoarding the savings derived from discount programs.”

“Affordable medicine is essential for the well-being of society, but a careful balance must be struck to guarantee that manufacturers will continue to invest and produce,” Roberts concluded.

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