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New Mexico Gov. Michelle Lujan Grisham (D) has signed a law to prevent PBMs and insurers from discriminating against 340B providers.

New Mexico Governor Signs Bill Protecting 340B Providers from PBM and Payer Discrimination

New Mexico Gov. Michelle Lujan Grisham (D) signed a law April 7 to prevent pharmacy benefit managers and insurers from discriminating against 340B providers.  The bill includes language that prohibits payers from reimbursing 340B covered entities at a lower rate than other providers.

The state legislature passed the legislation on March 18 with only about two minutes left in the session.  The final bill excluded language from the original House version that would have outlawed drug manufacturers’ conditions on 340B sales when entities use contract pharmacies.

The House health committee passed the bill, including its 340B contract pharmacy language, on March 8. The House judiciary committee removed the language on March 14. On March 17, the next-to-last day of the 2023 session, the full House passed a different PBM-related bill that the Senate had already passed. The full House attached the House Judiciary Committee version of the 340B bill to the Senate PBM bill, sending it back to the Senate floor for a vote on the amendments. The Senate concurred with the changes on March 18 sending the final bill to Lujan Grisham.

The final version bill bans certain PBM policies including:

  • Reimbursing a 340B covered entity at a rate lower than that paid for the same drug to pharmacies, similar in prescription volume, that are non-340B entities.
  • Assessing a fee, chargeback or other adjustment to a covered entity not assessed to non-340B entities.
  • Imposing a provision that prevents or interferes with a person’s choice to receive 340B drugs from a covered entity.
  • Imposing terms or conditions that differ from those imposed on a non-covered entity, including:                      
  • Restricting or requiring participation in a pharmacy network.
  • Requiring more frequent or broader scope of audits for inventory management systems using generally accepted accounting principles.
  • Requiring a covered entity to reverse, resubmit or clarify a claim after the initial adjudication, unless these actions are in the normal course of pharmacy business and not related to the 340B program.
  • Charging an additional fee or provision that prevents or interferes with an individual’s choice to receive a 340B drug from a covered entity.

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, Mississippi, Missouri, Montana, Oregon, Rhode Island, and Texas.

Bills to address manufacturers’ 340B contract pharmacy actions were also introduced in Connecticut, Kansas, Mississippi, and Missouri but only the Connecticut bill appears to have gained enough traction that it might pass.

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