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North Carolina lawmakers excluded 340B disproportionate share hospitals, children’s hospitals, free-standing cancer hospitals, and hemophilia treatment centers from protection against discriminatory PBM treatment under a bill passed and sent to the governor this week.

N.C. Lawmakers Leave 340B DSH, Children’s, and Cancer Hospitals and HTCs Unprotected from PBM Pickpocketing

North Carolina lawmakers approved a final deal Wednesday to protect some, but not all, of the state’s 340B covered entities against discrimination by pharmacy benefit managers (PBMs).

Under an agreement a House-Senate conference committee reached on Sept. 8, 340B disproportionate share hospitals, children’s hospitals, free-standing cancer hospitals, and hemophilia treatment centers were excluded from protection against discriminatory PBM treatment under the Medication Cost Transparency Act, SB 257. Certain insurance companies pressed hard for their exclusion, lobbyists said.

Federal qualified health centers, family planning clinics, Ryan White clinics, the state’s HIV medication assistance program, urban Indian organizations, STD clinics, critical access hospitals, rural referral centers, and sole community hospitals are protected under SB 257, as are their contract pharmacies.

Both chambers passed SB 257 with no opposing votes on Sept. 8, according to the state General Assembly website. It is due to be presented to Gov. Roy Cooper (D) for his signature today. Cooper is expected to sign it, lobbyists say.

SB 257 requires licensure of PBMs and requires the state Insurance Department to increase its oversight of the industry, including with respect to 340B. It would prohibit contracts between PBMs and specified 340B covered entities or between PBMs and specified 340B entities’ contract pharmacies from:

  • restricting access to a pharmacy network or adjusting 340B drug reimbursement based on whether a pharmacy dispenses 340B-purchased drugs
  • varying the amount of or assessing additional fees based on a drug or pharmacy’s 340B status
  • interfering with an individual’s choice to get prescriptions filled by a 340B pharmacy.

The state hospital association expressed deep disappointment with lawmakers for excluding DSH, children’s, and free-standing cancer hospitals from the law’s protections.

Cody Hand, Senior Vice President and Deputy General Counsel of North Carolina Healthcare Association, said NCHA “is disappointed that the North Carolina General Assembly chose to side with the big profit hoarding insurance companies over those who rely on these lifesaving treatments.”

“PBMs are known to use 340B pricing to undercut the ability of hospitals to continue providing care to all who need it,” Hand said. “By stripping the bill of these vital protections, legislators left our patients and pharmacies to fend for themselves.”

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