Panel hears H.266 to block discrimination against 340B covered entities and contract pharmacies

A Vermont legislative committee heard testimony on H.266, a proposed law that would add a new subchapter to state prescription drug cost-containment statutes to protect 340B covered entities and 340B contract pharmacies from certain actions by drug manufacturers, insurers and pharmacy benefit managers.

The bill, explained Jen Kirby of the Office of Legislative Counsel, would define 340B covered entities and contract pharmacies and prohibit manufacturers and payers from denying, restricting or otherwise interfering with acquisition or delivery of 340B drugs to contract pharmacies "unless receipt by the 340B contract entity is prohibited by the U.S. Department of Health and Human Services." Kirby said the bill would also bar manufacturers or their agents from offering 340B pricing as a rebate rather than a discount at the time of purchase, and would make conforming changes to state pharmacy benefit manager statutes. "We are looking at H.266, which is an act relating to protections for 340B covered entities and 340B contract pharmacies," Kirby said.

Why it matters: witnesses told the committee that 340B drug discounts are an essential revenue source for safety-net providers and that recent manufacturer and payer practices have eroded those savings. Colleen, a policy expert for federally qualified health centers who testified about on-the-ground effects, told the panel that 340B savings "are essential to the financial stability of a lot of safety net providers," and said that in Vermont 340B savings account for about 25% of net patient revenue at health centers. Witnesses and written materials also described national trends — manufacturers limiting shipments to contract pharmacies, pharmacy benefit manager practices that reduce 340B gains, and proposals by manufacturers to shift discounts into post‑sale rebate models — that they say threaten clinic and hospital finances and patient access.

Key provisions and limits described in testimony - Definitions and scope: The bill would add a 340B…