North Carolina Gov. Roy Cooper (D) recently signed into law a new bill that gives some 340B covered entities protection from so-called discriminatory reimbursement cuts and restrictive contracting terms. Photo credit: Gov. Roy Cooper's office via Twitter.

North Carolina Enacts PBM Oversight Law Protecting Most 340B Covered Entities

North Carolina Gov. Roy Cooper (D) signed into law yesterday a bill that imposes greater oversight of pharmacy benefit managers and protects most categories of 340B entities from so called discriminatory reimbursement and contracting practices.  Disproportionate share hospitals (DSH), children’s hospitals and hemophilia treatment centers were not successful in getting added to the law.

Known as SB 257, the Medication Cost Transparency Act, the bill creates new protections from PBM actions for sole community hospitals, 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 and rural referral centers. The bill also provides protections to the contract pharmacies serving those entities.

Left out of the bill were protections for 340B DSH hospitals, children’s hospitals, free-standing cancer hospitals, and hemophilia treatment centers. These groups were included in the House bill but not the Senate version.  As 340B Report has reported previously, the state’s powerful insurance industry pushed hard to exclude certain types of hospitals and hemophilia treatment centers.

SB 257 was a rare example of bipartisanship in a Southern state, as it was passed unanimously by a GOP-dominated legislature and signed into law by Cooper, a Democrat.

The bill’s provisions include:

  • Prohibitions against PBMs from restricting access to pharmacy networks or adjusting reimbursements based on whether a pharmacy dispenses drugs under the 340B program
  • Prohibitions against PBMs imposing fees, chargebacks or any other adjustments based on whether a drug is dispensed through 340B
  • Bars any discrimination against a covered entity or contract pharmacy “in a manner that prevents or interferes with an enrollee’s choice to receive a prescription drug from an in-network 340B covered entity or an in-network 340B contract pharmacy”
  • Bars any fees imposed by PBMs for processing claims unless justified in remittance paperwork or laid out in a contract
  • Requires PBMs to obtain a license to operate in the state and pay an initial application fee of $2,000 and an annual renewal of $1,500

The new law goes into effect on Oct. 1.

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