States May Consider 340B Legislative Proposals in 2024

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Summary

In preparation for the 2024 state legislative sessions, stakeholders should consider how states will continue to shape the 340B policy landscape.

An increasing number of states considered legislation affecting the 340B program in 2023 following a trend of states considering pharmacy benefit manager (PBM) reform bills. In 2023, 16 states considered 340B legislation; eight of those enacted laws. As of November 28, 2023, at least one additional state is considering 340B legislation. We expect this trend to continue in 2024 as states begin to pre-file bills.

State-level 340B legislative proposals in 2024 may include the following provisions:

  • Manufacturer restriction provisions that impose limits on manufacturers related to 340B. Arkansas and Louisiana passed bills prohibiting manufacturers from restricting or interfering with contract pharmacies’ acquisition of 340B-discounted drugs. Both bills are facing legal challenges which will influence whether other states enact similar legislation.
  • “Clawback” provisions prohibit PBMs from retroactively recouping a portion of a pharmacy’s reimbursement for a drug. Many of these provisions also prohibit PBMs or health insurance issuers from imposing certain conditions on 340B-covered entities or contract pharmacies, such as reimbursing these entities less than non-340B providers, preventing a covered entity from retaining the benefit of discounted pricing for a covered drug’s purchase, and imposing fees on covered entities. Some bills include provisions to address fees and network participation in contracting.
  • 340B drug identifier provisions prohibit PBMs or issuers from requiring claims modifiers or other identifiers to flag drugs purchased through the 340B program.
  • Covered entity reporting provisions require hospitals participating in 340B to submit certain drug pricing or financial performance information to states.

In 2023, 8 states enacted legislation addressing manufacturer restrictions, differential reimbursement, the use of 340B drug identifiers, and covered entity reporting (see Figure 1).

Figure 1. Status of 2023 340B Legislation

Dive Deeper

The increased focus on the 340B program in state legislatures in 2023 may spur additional 340B legislation in 2024. Avalere can assist stakeholders evaluate the 340B state and federal legislative landscape through legislative analysis, quantitative modeling, stakeholder mapping, and strategy and policy development. To hear how Avalere’s policy experts and subscription products such as State Policy 360 TM can support your state tracking, advocacy, and strategic planning efforts, connect with us.

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