Across the country, states have been fighting back against drug manufacturers who are restricting 340B pricing for contract pharmacies. At least 30 states have pending bills aimed at protecting covered entities against manufacturer 340B pricing restrictions. Several states have successfully enacted laws protecting covered entities against manufacturer pricing restrictions. Below is a summary of the laws that have been enacted across the country:
West Virginia
West Virginia has amended the Code of West Virginia, 1931, to add a new section, designated as §60A-8-6a, to protect access to 340B pricing for contract pharmacies. The new law prevents manufacturers from: (1) directly or indirectly denying or restricting the acquisition or delivery of a 340B drug to any location authorized by a 340B entity, unless the receipt of the drug is prohibited by HRSA; and (2) directly or indirectly requiring a 340B entity to submit any claims or utilization data as a condition for purchase of 340B drugs by a covered entity.
A violation of this law carries a penalty of $50,000 per violation. Each package of 340B drug that is restricted is considered a separate violation pursuant to the law.
Arkansas
Arkansas amended the Arkansas Code, Title 23, Chapter 92 to add Subchapter 6—designed to prevent manufacturers imposing pricing restrictions on contract pharmacies. The new Subchapter explicitly prohibits drug manufacturers from restricting or denying 340B drug pricing for Arkansas-based community pharmacies that receive drugs purchased under a 340B drug pricing contract pharmacy arrangement with 340B covered entities.
Missouri
In May 2024, the Missouri Senate overwhelmingly passed a contract pharmacy access bill, SB 751. With the Missouri Governor opting out of taking action on the bill, the bill took effect on August 28, 2024, by default. The law prohibits drug manufacturers from restricting 340B pricing to contract pharmacies in the State of Missouri. Specifically, the bill prohibits drug manufacturers and their agents from denying contract pharmacies access to 340B drugs, so long as there is a contract pharmacy services agreement with a covered entity.
The penalties for violating the law are significant. Each 340B drug package subjected to restrictions by manufacturers is deemed its own separate offense. Moreover, the bill authorizes the State Board of Pharmacy to investigate any complaint of a violation of this bill, and to “impose discipline, suspension, or revocation of licenses.”
Kansas
With the passing of the Senate Bill No. 28—the Senate Budget Bill—the Kansas legislature sort to protect covered entities against drug manufacturer pricing restrictions. The law seeks to enforce the provisions of the Kansas consumer protection act against manufacturers that deny or restrict the acquisition or delivery of a 340B drug to a pharmacy that is under contract with a 340B-covered entity.
Maryland
Effective July 1, 2024, drug manufacturers are prohibited from denying or restricting the delivery of a 340B drug to a pharmacy on behalf of a covered entity. There are only two exceptions to this rule: (1) where the receipt of 340B drugs is prohibited by the HHS; or (2) if the limitation is required under a federal risk evaluation and mitigation strategy, as specified under federal law.
A violation of this law is an unfair, abusive, or deceptive trade practice under the Maryland Consumer Protection Act (MCPA) and is subject to enforcement actions and penalties. In addition to these penalties, a civil fine of up to $5,000 per violation may be assessed. Each package of 340B drugs subject to a violation constitutes a separate violation.
Mississippi
Pursuant to the passing of House Bill 728 and subsequent approval by the Governor, drug manufacturers are prohibited from restricting 340B pricing to contract pharmacies effective July 1, 2024. Specifically, manufacturers may not deny or restrict acquisition of a 340B drug by, or delivery of a 340B drug to a pharmacy that is under contract with a 340B covered entity. Manufacturers are also prohibited from “interfering” with a pharmacy contracted with a 340B entity.
Committing any of the above prohibited acts is considered a violation of the Mississippi Consumer Protection Act, and subjected to “any and all actions” including investigative demands, remedies, and penalties.
Minnesota
In June 2024, Governor Tim Walz signed the “Sustain 340B” bill into law. The law dictates that drug manufacturer cannot directly or indirectly restrict or prohibit, with the delivery of a covered outpatient drug to a pharmacy that is under contract with a 340B covered entity to receive and dispense covered outpatient drugs on behalf of the covered entity.
Louisiana
Louisiana’s Act 358 prohibits drug manufacturers and distributors from restricting and prohibiting delivery of a 340B drug to a pharmacy that is under contract with a 340 entity and is authorized under such contract to receive and dispense 340B drugs on behalf of the covered entity
Violating this law is considered a violation of the Unfair Trade Practices and Consumer Protection Law, provided for 28 in R.S. 51:1401 et seq. and subjects the violator to any and all actions, including investigative demands, remedies, and penalties provided for in the Unfair Trade Practices and Consumer Protection Law. A violation occurs each time a prohibited act is committed.
Drug manufacturers filed suit challenging the constitutionality and validity of Act 358, in federal court in Louisiana, pursuant to Pharmaceutical Research and Mfrs Of America v. Murrill. However, on September 30, 2024, the federal district court ruled against the manufacturers. Specifically, the federal district court held that Act 358 did not violate state rules and was not preempted by the federal 340B program. While the manufacturers are likely to appeal the federal district court decision, Act 358 currently remains in place.
Several manufacturers, including Merck, Abbvie, Amgen, and Teva have issued notices acknowledging some or all of the above state laws, and pausing pricing restrictions for pharmacies and covered entities located in those states. Advis is actively monitoring manufacturer notices to assist covered entities located in West Virginia, Missouri, Mississippi, Arkansas, Maryland, and Kansas regain 340B pricing for their contract pharmacies and discuss strategic solutions to increasing their 340B savings. Please contact Advis at 708-478-7094 for further information.
