At least 15 states have taken up proposals to set new guardrails for the 340B discount drug program this year, with Congress still gridlocked on overhaul measures.
Why it matters: Legislators say there's a need to ensure that low-income patients benefit from a safety net program that's been mired in litigation, with drugmakers, hospitals and other providers accusing one another of gaming the system.
State of play: A review of a National Academy for State Health Policy tracker and local coverage shows the bills fall into three broad categories:
- Nine states are aiming at the practice by manufacturers, PBMs or insurers of limiting the availability of discounted drugs at certain pharmacies, which supporters say discriminates against 340B-covered entities.
- Six states want 340B providers to report more information about drug costs, payment information and how program savings are being used, including for charity care.
- Three states are mandating how hospitals and clinics in the program are reimbursed for drugs.
Zoom in: Several state bills call for significant changes to how 340B providers can operate in their state.
- A Colorado bill that's passed the state Senate would prevent hospitals from using 340B savings for more than 35% of the annual compensation to their boards of directors, or for lobbying or public relations.
- It would also mandate that hospitals apply 340B savings to help with charity care for low-income patients.
- North Carolina is weighing legislation that would prohibit providers from charging more than the acquisition cost of the 340B drug to administer it to a patient. The bill has been referred to a Senate committee.
Two states have already enacted measures as legislative sessions begin to wind down.
- Idaho this month required providers to submit annual reports on certain 340B information to the state, making it the fourth state to add transparency measures in recent years.
- Utah's new law prohibits drug manufacturers from discriminating against 340B-covered entities.
What they're saying: "States typically are quicker to pass new laws than Congress is," Darbin Wofford, deputy director of health care at Third Way, told Axios.
- "They aren't as politically gridlocked, and legislatures must act on tighter deadlines. On 340B, they are more willing to enact new laws on both sides of the issue."
The other side: Federal efforts to change the program have essentially stalled in Congress. And it's unclear if all the state activity will spur Congress to resolve its differences.
- The Senate's 340B working group was supposed to release draft legislation last year after putting out requests for information, but the bill's release kept getting pushed back over partisan disagreements.
- That Senate bill has yet to materialize, though the working group recently announced three new members: Sens. Tim Kaine, Markwayne Mullin and John Hickenlooper.
Senate HELP Chair Bill Cassidy has said he wants to take action this session.
- On the House side, one of the main proponents of provider transparency in the program, Rep. Larry Bucshon, retired from Congress last session. No one has yet publicly taken up the cause.
What we're watching: Some of the biggest battles over the 340B program are playing out in courts.
- And the Trump administration recently weighed in, defending the Biden administration's decision to reject three drugmakers' changes to how safety net providers can get discounts under the program.
