Relates to establishing the "340B prescription drug anti-discrimination act"; prohibits pharmaceutical manufacturers and pharmacy benefit managers from discriminating against covered entities and New York state pharmacies based on participation in the drug discount program authorized by section 340B of the federal public health service act.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6222
SPONSOR: Paulin TITLE OF BILL:
An act to amend the public health law, in relation to establishing the
340B prescription drug anti-discrimination act
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 provides the short title for this act to be known as the "340B
prescription drug anti-discrimination act."
Section 2 amends Public Health Law by adding a new section 280-d, to
prohibit a pharmaceutical manufacturer, pharmacy benefit manager,
outsourcing facility, or third-party logistics provider from directly or
indirectly inserting additional requirements or burdens, or from
restricting the utilization of contract pharmacies by covered entities
under the federal 340B program. It provides the Commissioner of Health
(COH) with the enforcement authority to impose civil monetary penalties
on any entity found in violation and directs the COH to refer any
matters in which a civil, monetary penalty is imposed to the State
Education Department and the Office of the Attorney General for review.
Section 3 provides a severability clause.
Section 4 provides an immediate effective date.
JUSTIFICATION:
The 340B prescription drug anti-discrimination act seeks to prevent
discriminatory practices targeting healthcare providers in New York who
participate in the federal 340B program. Established by Congress to
support providers serving vulnerable populations, the 340B program
mandates.drug manufacturers to provide discounts on outpatient drugs to
clinics, hospitals, and health systems catering to low-income, rural,
and medically underserved patients. By leveraging these discounts,
providers can extend their resources to reach more eligible patients and
offer comprehensive services.
In recent years, some pharmaceutical companies and pharmacy benefit
managers have imposed restrictions and requirements on New York's 340B
covered entities, thus depriving them of essential cost savings. Such
actions not only discriminate against these entities but also hinder
their ability to provide comprehensive care to their communities.
With the implementation of the Medicaid pharmacy carve-out, New York's
340B providers face substantial losses in savings. Despite this, many
continue to rely on the 340B program to save on pharmaceutical purchases
for other payers, such as commercial health insurers and Medicare.
However, both the pharmaceutical industry and pharmacy benefit managers
have engaged in practices aimed at weakening the 340B program, including
denying required discounts, imposing labor-intensive requirements, and
refusing to distribute 340B drugs to hospital and contract pharmacies.
These practices redirect savings intended for serving vulnerable commu-
nities towards corporate profit margins.
This bill aims to prohibit such discriminatory practices and ensure that
the savings from the 340B program remain available to safety-net health-
care providers in New York State. By safeguarding the integrity of the
program, this legislation preserves vital resources for healthcare
providers serving vulnerable populations, ultimately promoting equitable
access to essential healthcare services across the state. The bill
establishes enforcement mechanisms, including civil monetary penalties
for violations, to uphold these protections.
PRIOR LEGISLATIVE HISTORY:
2024: S8992-A Rivera/A7789 Paulin
FISCAL IMPLICATIONS:
None to the state
EFFECTIVE DATE:
This act shall take effect immediately.
