HOUSE DOCKET, NO. 3037        FILED ON: 1/19/2023

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 959

The Commonwealth of Massachusetts

_________________

PRESENTED BY:

Daniel Cahill

_________________

To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act prohibiting discrimination against 340b drug discount program participants.

_______________

PETITION OF:

HOUSE DOCKET, NO. 3037        FILED ON: 1/19/2023

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 959

The Commonwealth of Massachusetts

_______________

In the One Hundred and Ninety-Third General Court
(2023-2024)

_______________

An Act prohibiting discrimination against 340b drug discount program participants.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1. Chapter 32A of the General laws, as appearing in the 2020 Official Edition, is hereby amended by inserting after Section 33, the following new section:-

Section 34

(a)DEFINITIONS.  For purposes of this section:

(1) “340B-covered entity” has the same meaning as that set forth in section 256b(a)(4) of Title 42 of the United States Code.

(2) “Contract pharmacy” means a pharmacy operating under contract with a 340B-covered entity to provide dispensing services to the 340B-covered entity as described in 75 Fed. Reg. 10,272 (Mar. 5, 2010).

(3) “Drug coverage” means:

(i) An insurance company organized under this Chapter providing reimbursement for covered outpatient drugs, excepting any Medicaid insurance plan of the Commonwealth as defined in G. L. c. 118E or other applicable laws governing Medicaid in the Commonwealth;

(ii) Notwithstanding the foregoing, the term “drug coverage” does not include any amounts paid by an individual on his or her own behalf or on behalf of another individual.

(b)TERMS OF AGREEMENTS.  No drug coverage that reimburses a-340B-covered entity or its contract pharmacy for drugs that are subject to an agreement under section 256b(a)(1) of Title 42 of the United States Code:

(i) Shall reimburse a covered entity or contract pharmacy for a quantity of a 340B drug in an amount less than such plan, issuer, or manager would pay to any other similarly situated entity or pharmacy that is not a covered entity or a contract pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs.             

(ii) Shall discriminate against a 340B-covered entity (as defined in subsection (a)(1)) or a contract pharmacy (as defined in subsection (a)(2)) by imposing requirements, exclusions, reimbursement terms, or other conditions on such entity or pharmacy that differ from those applied to entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs, including by taking any action prohibited under subsection (b).

(ii)Shall impose any terms or conditions on 340B-covered entities or contract pharmacies with respect to any of the following that differ from such terms or conditions applied to other similarly situated entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a 340B-covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs:

(A) Fees, chargebacks, clawbacks, adjustments, or other assessments.

(B) Professional dispensing fees.

(C) Restrictions or requirements regarding participation in standard or preferred pharmacy networks.

(D) Requirements relating to the frequency or scope of audits or to inventory management systems using generally accepted accounting principles.

(iii) Shall require a claim for a drug to include a modifier to indicate that the drug is a 340B drug, or any other method of identifying the claim as 340B, unless the claim is for payment, directly or indirectly, by Medicaid as defined in Section 8 of Chapter 118E.

(c)Patient’s Choice.  With respect to a patient eligible to receive drugs that are subject to an agreement under section 256b of Title 42 of the United States Code from a 340B-covered entity or its contract pharmacy, no entity that makes payment for such drugs shall discriminate against the 340B-covered entity or its contract pharmacy in a manner that prevents, steers, or otherwise interferes with the patient’s choice to receive such drugs from the 340B-covered entity or its contract pharmacy.

SECTION 2.  Chapter 175 of the General laws, as appearing in the 2020 Official Edition, is hereby amended by inserting after Section 47tt, the following new section:-

Section 47uu

(a)DEFINITIONS.  For purposes of this section:

(1) “340B-covered entity” has the same meaning as that set forth in section 256b(a)(4) of Title 42 of the United States Code.

(2) “Contract pharmacy” means a pharmacy operating under contract with a 340B-covered entity to provide dispensing services to the 340B-covered entity as described in 75 Fed. Reg. 10,272 (Mar. 5, 2010).

(3) “Drug coverage” means:

(i) An insurance company organized under this Chapter providing reimbursement for covered outpatient drugs, excepting any Medicaid insurance plan of the Commonwealth as defined in G. L. c. 118E or other applicable laws governing Medicaid in the Commonwealth;

(ii) Notwithstanding the foregoing, the term “drug coverage” does not include any amounts paid by an individual on his or her own behalf or on behalf of another individual.

(b)TERMS OF AGREEMENTS.  No drug coverage that reimburses a-340B-covered entity or its contract pharmacy for drugs that are subject to an agreement under section 256b(a)(1) of Title 42 of the United States Code:

(i) Shall reimburse a covered entity or contract pharmacy for a quantity of a 340B drug in an amount less than such plan, issuer, or manager would pay to any other similarly situated entity or pharmacy that is not a covered entity or a contract pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs.             

(ii) Shall discriminate against a 340B-covered entity (as defined in subsection (a)(1)) or a contract pharmacy (as defined in subsection (a)(2)) by imposing requirements, exclusions, reimbursement terms, or other conditions on such entity or pharmacy that differ from those applied to entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs, including by taking any action prohibited under subsection (b).

(ii)Shall impose any terms or conditions on 340B-covered entities or contract pharmacies with respect to any of the following that differ from such terms or conditions applied to other similarly situated entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a 340B-covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs:

(A) Fees, chargebacks, clawbacks, adjustments, or other assessments.

(B) Professional dispensing fees.

(C) Restrictions or requirements regarding participation in standard or preferred pharmacy networks.

(D) Requirements relating to the frequency or scope of audits or to inventory management systems using generally accepted accounting principles.

(iii) Shall require a claim for a drug to include a modifier to indicate that the drug is a 340B drug, or any other method of identifying the claim as 340B, unless the claim is for payment, directly or indirectly, by Medicaid as defined in Section 8 of Chapter 118E.

(c)Patient’s Choice.  With respect to a patient eligible to receive drugs that are subject to an agreement under section 256b of Title 42 of the United States Code from a 340B-covered entity or its contract pharmacy, no entity that makes payment for such drugs shall discriminate against the 340B-covered entity or its contract pharmacy in a manner that prevents, steers, or otherwise interferes with the patient’s choice to receive such drugs from the 340B-covered entity or its contract pharmacy.

SECTION 3. Chapter 176A of the General laws, as appearing in the 2020 Official Edition, is hereby amended by inserting after Section 39, the following Section:

Section 40

(a)DEFINITIONS.  For purposes of this section:

(1) “340B-covered entity” has the same meaning as that set forth in section 256b(a)(4) of Title 42 of the United States Code.

(2) “Contract pharmacy” means a pharmacy operating under contract with a 340B-covered entity to provide dispensing services to the 340B-covered entity as described in 75 Fed. Reg. 10,272 (Mar. 5, 2010).

(3) “Drug coverage” means:

(i) An insurance company organized under this Chapter providing reimbursement for covered outpatient drugs, excepting any Medicaid insurance plan of the Commonwealth as defined in G. L. c. 118E or other applicable laws governing Medicaid in the Commonwealth;

(ii) Notwithstanding the foregoing, the term “drug coverage” does not include any amounts paid by an individual on his or her own behalf or on behalf of another individual.

(b)TERMS OF AGREEMENTS.  No drug coverage that reimburses a-340B-covered entity or its contract pharmacy for drugs that are subject to an agreement under section 256b(a)(1) of Title 42 of the United States Code:

(i) Shall reimburse a covered entity or contract pharmacy for a quantity of a 340B drug in an amount less than such plan, issuer, or manager would pay to any other similarly situated entity or pharmacy that is not a covered entity or a contract pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs.             

(ii) Shall discriminate against a 340B-covered entity (as defined in subsection (a)(1)) or a contract pharmacy (as defined in subsection (a)(2)) by imposing requirements, exclusions, reimbursement terms, or other conditions on such entity or pharmacy that differ from those applied to entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs, including by taking any action prohibited under subsection (b).

(ii)Shall impose any terms or conditions on 340B-covered entities or contract pharmacies with respect to any of the following that differ from such terms or conditions applied to other similarly situated entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a 340B-covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs:

(A) Fees, chargebacks, clawbacks, adjustments, or other assessments.

(B) Professional dispensing fees.

(C) Restrictions or requirements regarding participation in standard or preferred pharmacy networks.

(D) Requirements relating to the frequency or scope of audits or to inventory management systems using generally accepted accounting principles.

(iii) Shall require a claim for a drug to include a modifier to indicate that the drug is a 340B drug, or any other method of identifying the claim as 340B, unless the claim is for payment, directly or indirectly, by Medicaid as defined in Section 8 of Chapter 118E.

(c)Patient’s Choice.  With respect to a patient eligible to receive drugs that are subject to an agreement under section 256b of Title 42 of the United States Code from a 340B-covered entity or its contract pharmacy, no entity that makes payment for such drugs shall discriminate against the 340B-covered entity or its contract pharmacy in a manner that prevents, steers, or otherwise interferes with the patient’s choice to receive such drugs from the 340B-covered entity or its contract pharmacy.

SECTION 4. Section 1 of Chapter 176B of the General laws, as appearing in the 2020 Official Edition, is hereby amended by inserting after the definition of “Commissioner”, the following new definitions:

“340B-covered entity” has the same meaning as that set forth in section 256b(a)(4) of Title 42 of the United States Code.

“Contract pharmacy” means a pharmacy operating under contract with a 340B-covered entity to provide dispensing services to the 340B-covered entity as described in 75 Fed. Reg. 10,272 (Mar. 5, 2010).

“Drug coverage” means:

(i) An insurance company organized under this Chapter providing reimbursement for covered outpatient drugs, excepting any Medicaid insurance plan of the Commonwealth as defined in G. L. c. 118E or other applicable laws governing Medicaid in the Commonwealth;

(ii) Notwithstanding the foregoing, the term “drug coverage” does not include any amounts paid by an individual on his or her own behalf or on behalf of another individual.

SECTION 5. Chapter 176B of the General laws, as appearing in the 2020 Official Edition, is hereby further amended by inserting after Section 26 the following new section:-

Section 27.

(a)TERMS OF AGREEMENTS.  No drug coverage that reimburses a-340B-covered entity or its contract pharmacy for drugs that are subject to an agreement under section 256b(a)(1) of Title 42 of the United States Code:

(i) Shall reimburse a covered entity or contract pharmacy for a quantity of a 340B drug in an amount less than such plan, issuer, or manager would pay to any other similarly situated entity or pharmacy that is not a covered entity or a contract pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs.             

(ii) Shall discriminate against a 340B-covered entity (as defined in subsection (a)(1)) or a contract pharmacy (as defined in subsection (a)(2)) by imposing requirements, exclusions, reimbursement terms, or other conditions on such entity or pharmacy that differ from those applied to entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs, including by taking any action prohibited under subsection (b).

(ii)Shall impose any terms or conditions on 340B-covered entities or contract pharmacies with respect to any of the following that differ from such terms or conditions applied to other similarly situated entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a 340B-covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs:

(A) Fees, chargebacks, clawbacks, adjustments, or other assessments.

(B) Professional dispensing fees.

(C) Restrictions or requirements regarding participation in standard or preferred pharmacy networks.

(D) Requirements relating to the frequency or scope of audits or to inventory management systems using generally accepted accounting principles.

(iii) Shall require a claim for a drug to include a modifier to indicate that the drug is a 340B drug, or any other method of identifying the claim as 340B, unless the claim is for payment, directly or indirectly, by Medicaid as defined in Section 8 of Chapter 118E.

(b)Patient’s Choice.  With respect to a patient eligible to receive drugs that are subject to an agreement under section 256b of Title 42 of the United States Code from a 340B-covered entity or its contract pharmacy, no entity that makes payment for such drugs shall discriminate against the 340B-covered entity or its contract pharmacy in a manner that prevents, steers, or otherwise interferes with the patient’s choice to receive such drugs from the 340B-covered entity or its contract pharmacy.

SECTION 6. Section 1 of Chapter 176G of the General laws, as appearing in the 2020 Official Edition, is hereby amended by inserting after the definition of “Company”, the following new definitions:

“340B-covered entity” has the same meaning as that set forth in section 256b(a)(4) of Title 42 of the United States Code.

“Contract pharmacy” means a pharmacy operating under contract with a 340B-covered entity to provide dispensing services to the 340B-covered entity as described in 75 Fed. Reg. 10,272 (Mar. 5, 2010).

“Drug coverage” means:

(i) An insurance company organized under this Chapter providing reimbursement for covered outpatient drugs, excepting any Medicaid insurance plan of the Commonwealth as defined in G. L. c. 118E or other applicable laws governing Medicaid in the Commonwealth;

(ii) Notwithstanding the foregoing, the term “drug coverage” does not include any amounts paid by an individual on his or her own behalf or on behalf of another individual.

SECTION 7. Chapter 176G of the General laws, as appearing in the 2020 Official Edition, is hereby further amended by inserting after Section 34 the following new section:-

Section 35.

(a)TERMS OF AGREEMENTS.  No drug coverage that reimburses a-340B-covered entity or its contract pharmacy for drugs that are subject to an agreement under section 256b(a)(1) of Title 42 of the United States Code:

(i) Shall reimburse a covered entity or contract pharmacy for a quantity of a 340B drug in an amount less than such plan, issuer, or manager would pay to any other similarly situated entity or pharmacy that is not a covered entity or a contract pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs.             

(ii) Shall discriminate against a 340B-covered entity (as defined in subsection (a)(1)) or a contract pharmacy (as defined in subsection (a)(2)) by imposing requirements, exclusions, reimbursement terms, or other conditions on such entity or pharmacy that differ from those applied to entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs, including by taking any action prohibited under subsection (b).

(ii)Shall impose any terms or conditions on 340B-covered entities or contract pharmacies with respect to any of the following that differ from such terms or conditions applied to other similarly situated entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a 340B-covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs:

(A) Fees, chargebacks, clawbacks, adjustments, or other assessments.

(B) Professional dispensing fees.

(C) Restrictions or requirements regarding participation in standard or preferred pharmacy networks.

(D) Requirements relating to the frequency or scope of audits or to inventory management systems using generally accepted accounting principles.

(iii) Shall require a claim for a drug to include a modifier to indicate that the drug is a 340B drug, or any other method of identifying the claim as 340B, unless the claim is for payment, directly or indirectly, by Medicaid as defined in Section 8 of Chapter 118E.

(b)Patient’s Choice.  With respect to a patient eligible to receive drugs that are subject to an agreement under section 256b of Title 42 of the United States Code from a 340B-covered entity or its contract pharmacy, no entity that makes payment for such drugs shall discriminate against the 340B-covered entity or its contract pharmacy in a manner that prevents, steers, or otherwise interferes with the patient’s choice to receive such drugs from the 340B-covered entity or its contract pharmacy.

SECTION 8. Section 1 of Chapter 176I of the General laws, as appearing in the 2020 Official Edition, is hereby amended by inserting after the definition of “Commissioner”, the following new definitions:

“340B-covered entity” has the same meaning as that set forth in section 256b(a)(4) of Title 42 of the United States Code.

“Contract pharmacy” means a pharmacy operating under contract with a 340B-covered entity to provide dispensing services to the 340B-covered entity as described in 75 Fed. Reg. 10,272 (Mar. 5, 2010).

“Drug coverage” means:

(i) An insurance company organized under this Chapter providing reimbursement for covered outpatient drugs, excepting any Medicaid insurance plan of the Commonwealth as defined in G. L. c. 118E or other applicable laws governing Medicaid in the Commonwealth;

(ii) Notwithstanding the foregoing, the term “drug coverage” does not include any amounts paid by an individual on his or her own behalf or on behalf of another individual.

SECTION 9. Chapter 176I of the General laws, as appearing in the 2020 Official Edition, is hereby further amended by inserting after Section 14 the following new section:-

Section 15.

(a)TERMS OF AGREEMENTS.  No drug coverage that reimburses a-340B-covered entity or its contract pharmacy for drugs that are subject to an agreement under section 256b(a)(1) of Title 42 of the United States Code:

(i) Shall reimburse a covered entity or contract pharmacy for a quantity of a 340B drug in an amount less than such plan, issuer, or manager would pay to any other similarly situated entity or pharmacy that is not a covered entity or a contract pharmacy for such quantity of such drug on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs.             

(ii) Shall discriminate against a 340B-covered entity (as defined in subsection (a)(1)) or a contract pharmacy (as defined in subsection (a)(2)) by imposing requirements, exclusions, reimbursement terms, or other conditions on such entity or pharmacy that differ from those applied to entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs, including by taking any action prohibited under subsection (b).

(ii)Shall impose any terms or conditions on 340B-covered entities or contract pharmacies with respect to any of the following that differ from such terms or conditions applied to other similarly situated entities or pharmacies that are not 340B-covered entities or contract pharmacies on the basis that the entity or pharmacy is a 340B-covered entity or contract pharmacy or that the entity or pharmacy dispenses 340B drugs:

(A) Fees, chargebacks, clawbacks, adjustments, or other assessments.

(B) Professional dispensing fees.

(C) Restrictions or requirements regarding participation in standard or preferred pharmacy networks.

(D) Requirements relating to the frequency or scope of audits or to inventory management systems using generally accepted accounting principles.

(iii) Shall require a claim for a drug to include a modifier to indicate that the drug is a 340B drug, or any other method of identifying the claim as 340B, unless the claim is for payment, directly or indirectly, by Medicaid as defined in Section 8 of Chapter 118E.

(b)Patient’s Choice.  With respect to a patient eligible to receive drugs that are subject to an agreement under section 256b of Title 42 of the United States Code from a 340B-covered entity or its contract pharmacy, no entity that makes payment for such drugs shall discriminate against the 340B-covered entity or its contract pharmacy in a manner that prevents, steers, or otherwise interferes with the patient’s choice to receive such drugs from the 340B-covered entity or its contract pharmacy.