Louisiana state capitol
A Louisiana House committee is considering a bill to stop drug manufacturers from impeding 340B covered entities’ use of contract pharmacies.

Louisiana Lawmakers to Address Drug Makers’ and PBMs’ 340B Policies in Thursday Hearing

A hearing is set for Thursday in the Louisiana House on a bill to stop drug manufacturers from impeding 340B covered entities’ use of contract pharmacies.

State Rep. Chris Turner (R) introduced House Bill 548, the Defending Affordable Prescription Drug Costs Act, last week. It was referred to the Health and Welfare Committee and it appears to be moving quickly since the hearing is scheduled for later this week.

Bills to address manufacturers’ 340B contract pharmacy actions have also been introduced in Connecticut, Kansas, Mississippi, and Missouri. The Connecticut bill and the Missouri bill still have a chance to pass in this session, according to sources. The various bills are modeled on Arkansas’s first-of-its kind law that is currently being challenged by the Pharmaceutical Research and Manufacturers of America in the U.S. Eighth Circuit Court of Appeals in St. Louis.

The Louisiana bill says a drug manufacturer or distributor shall not:

  • Deny, restrict, prohibit, or otherwise interfere with, directly or indirectly, the acquisition of a 340B drug by, or delivery of a 340B drug to a pharmacy that is under contract with a 340B entity and is authorized under such contract to receive and dispense 340B drugs on behalf of the covered entity, unless receipt is prohibited by the U.S. Department of Health and Human Services (HHS).
  • Interfere with a pharmacy contracted with a 340B entity.

The Louisiana bill, like the others, also would outlaw pharmacy benefit manager practices that provider advocates say discriminate against 340B covered entities and their pharmacies. It says PBMs, health plans, and other payors or their agents cannot:

  • Reimburse a 340B entity for 340B drugs at a rate lower than that paid for the same drug to non-340B entities, or lower reimbursement for a claim on the basis that the claim is for a 340B drug.
  • Impose any terms or conditions on 340B entities that differ from those applied to non-340B entities, including:
    • Fees, charges, clawbacks, or other adjustments that add fees or costs.
    • Dispensing fees that are less than those for non-340B entities.
    • Restrictions or requirements on participation in standard or preferred pharmacy networks.
    • Requirements relating to frequency or scope of audits of inventory management systems.
    • Requirements that a drug claim include identification, billing modifier, attestation, or other indication that a drug is 340B in order to be processed or resubmitted unless required by law.
    • Any other restrictions, conditions, practices, or policies not imposed on non-340B entities.
  • Require a 340B entity to reverse, resubmit, or clarify a claim after initial adjudication unless actions are in normal course of pharmacy business and not related to 340B drug pricing.
  • Prevent or interfere with patient’s choice to receive such drugs from the 340B entity, including administration of such drugs.
  • Require submission of ingredient costs or pricing data related to 340B drugs.
  • Exclude any 340B entity from network or refuse to contract with a 340B entity for reasons other than those applied equally to non-340B entities.

The bill provides that violations of the proscribed acts will be considered unlawful under the state’s Unfair Trade Practices and Consumer Protection Law, with violators subject to all remedies and penalties set forth in the law.

“The bill addresses a wide variety of challenges our members face,” said Mike Thompson, healthcare policy analyst and media liaison at the Louisiana Hospital Association. “Each of the problems addressed in the bill is a growing problem in Louisiana.”

LHA last week tweeted video comments by Ashley Costello, executive director of the Louisiana Hemophilia Foundation and the mother of a child with hemophilia, urging lawmakers to back the bill in order to protect safety-net providers and their patients. “Without the 340B program, patients would essentially be having to search for a specialty pharmacy on their own to get these life-saving medications,” she said. “The 340B program is essential to [hemophilia treatment centers’] existence and to their continued services.”

New Mexico Gov. Michelle Lujan Grisham (D) signed a law April 7 to prevent pharmacy benefit managers and insurers from discriminating against 340B providers. More than 20 other states have passed comparable laws. Other states this year with legislation addressing discriminatory PBM practices involving the 340B program include Connecticut, Iowa, Kansas, Mississippi, Missouri, Montana, Oregon, Rhode Island, Texas, Nevada, and California.