On Thursday, lawmakers introduced legislation aimed at protecting a federal drug discount program, known as 340B, which is crucial for reducing the costs of prescription medications for underinsured and medically vulnerable Delawareans.
Sponsored by Rep. Kerri Evelyn Harris and Sen. Sarah McBride, House Bill 383 seeks to block discriminatory practices used against healthcare entities participating in the 340B Drug Pricing Program.
“Unfortunately, there are manufacturers and pharmacy benefit managers that use practices that hurt our 340B providers and therefore threaten our public health infrastructure as a whole,” said Rep. Harris
“The lack of movement to address the program’s issues at the federal level has resulted in local hospitals losing millions of dollars that could otherwise be used providing care to our communities. The delayed federal action also leaves pharmaceutical manufacturers in limbo regarding best practices that help them achieve their shared goal of providing affordable medications to community members and helping Federally Qualified Healthcare Centers (FQHCs) use the difference in prices to fund programming for the medically underserved.
“We can no longer delay taking action, it’s time to move forward to find an equitable solution that ensures the uninterrupted delivery of essential services to those who depend on them most.”
Through the 340B program, which was established by Congress in 1992, drug manufacturers provide outpatient drugs at a discount to healthcare organizations that serve vulnerable populations, including low-income Medicare and Medicaid patients and underinsured patients. These providers, or covered entities, include Medicare disproportionate share hospitals, children’s hospitals, free-standing cancer hospitals, and rural hospitals.
Providers use the savings from the 340B program to stretch federal resources further, providing outpatient drugs and medical services at substantially discounted prices to underserved communities.
In recent years, some drug manufacturers and distributors have restricted access to 340B discounted drugs to covered entities and pharmacies contracting with entities, also known as contract pharmacies. HB 383 would prohibit this practice in Delaware.
The bill would also prohibit pharmacy benefit managers from discriminating against providers participating in the 340B program. Under HB 383, pharmacy benefit managers would be barred from providing lower reimbursement rates for 340B drugs or applying terms or conditions to covered entities that differ from those imposed on non-covered entities.
While the 340B program is administered through the federal government, pharmacy arrangements are a matter of state law.
More than 30 states have introduced or passed legislation aimed at protecting 340B covered entities and contracted pharmacies.
HB 383 has been assigned to the House Economic Development/Banking/Insurance & Commerce Committee.
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