September 05, 2019

New PBM State Laws Indicate a Shifting Battlefront over 340B Program Drug Pricing

State legislatures have been enacting laws to help resolve the ongoing disputes between covered entities in the 340B Program and pharmacy benefit managers (PBMs) relating to lower reimbursement rates for drugs in the 340B Program. PBMs have been attempting to negotiate lower reimbursement rates for 340B Program drugs, essentially claiming that because the covered entity pays less for the drug, the PBM is entitled to reimburse the covered entity at a lesser amount. Covered entities argue that this practice is inappropriate as they are entitled to the benefits of the difference between the preferential 340B Program drug pricing and the standard reimbursement rate. Thus far, state legislatures in South Dakota, Minnesota, Oregon, and West Virginia appear to be siding with covered entities, generally prohibiting PBMs from discriminating against a covered entity or one of their contract pharmacies regarding 340B drug reimbursement.