Relating to contract pharmacies and covered entities that participate in the 340B drug program

This bill relates to contract pharmacies and covered entities that participate in the 340B program. The bill defines “340B program”, “contract pharmacy”, and “covered entity”. Group health plans (plans), health carriers that offer group or individual health insurance coverage (carriers), third-party administrators (administrators), and pharmacy benefits managers (PBM) are prohibited from discriminating against a covered entity or a contract pharmacy by reimbursing the covered entity or the contract pharmacy for a prescription drug or a dispensing fee in an amount less than the plan, carrier, administrator, or PBM reimburses a similarly situated entity or pharmacy that is not a covered entity or a contract pharmacy. “Similarly situated entity or pharmacy” is defined in the bill. Plans, carriers, administrators, and PBMs shall not, on the basis that an entity is a covered entity or that a pharmacy is a contract pharmacy, or that a covered entity or contract pharmacy participates in the 340B program, impose certain contractual terms and conditions, as described in the bill, on the covered entity or contract pharmacy that differ from those imposed on a similarly situated entity or pharmacy that is not a covered entity or a contract pharmacy. Plans, carriers, administrators, and PBMs are also prohibited from, on the basis that an entity is a covered entity or that a pharmacy is a contract pharmacy, or that a covered entity or a contract pharmacy participates in the 340B program, placing restrictions or imposing requirements on individuals that choose to obtain a covered outpatient drug from a covered entity or a contract pharmacy, whether in person, via courier or the United States post office, or any other form of delivery; refusing to contract with a covered entity or a contract pharmacy based on any criteria that is not applied equally to a contract with a similarly situated entity or pharmacy that does not participate in the 340B program; or imposing any restriction or condition on a covered entity that interferes with the covered entity’s ability to maximize the value of the discounts obtained by the covered entity through the covered entity’s participation in the 340B program. “Group health plan” and “third-party administrator” are defined in the bill. The commissioner of insurance (commissioner) may take any enforcement action under the commissioner’s authority to enforce compliance with the bill.7 upon a finding that a plan, a carrier, an administrator, or a PBM violated any provision of the bill.4(3). The commissioner may adopt rules as necessary to implement the bill. If any provision of the bill is inconsistent or in conflict with applicable state or federal law or rule, or the state Medicaid plan, the state or federal law or rule, or the state Medicaid plan, shall prevail to the extent necessary to eliminate the inconsistency or conflict. The bill applies to covered entities, contract pharmacies, plans, carriers, administrators, and PBM, but shall not apply to their operations under a contract with the state Medicaid agency or a Medicaid managed care organization, regardless of whether the covered entity or contract pharmacy is eligible to retain the 340B discounts generated by the covered entities and contract pharmacies. “Medicaid managed care organization” is defined in the bill.