wa-law.org > bill > 2025-26 > HB 2145 > Second Substitute
The legislature finds that the federal 340B drug pricing program is essential for providing health care access to low-income and uninsured populations. The 340B program requires drug manufacturers to offer discounts on outpatient medications to eligible providers that serve these populations. They include federally qualified health centers, Ryan White (HIV) clinics, tribal and urban Indian health centers, critical access hospitals, and other safety net hospitals that meet stringent federal criteria.
Congress created the 340B program in 1992, stating that the program's benefits enable covered "entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." (H.R. Rep. No. 102-384 (II), at 12 (1992)). The 340B program allows certain safety net providers to sustain underfunded services and reinvest savings into essential community benefits, such as financial assistance for low-income patients, no-cost wellness visits, screenings, vaccinations, transportation to appointments, health education classes, case management, medication adherence services, and workforce development programs.
The federal health resources and services administration permits covered entities to contract with pharmacies to enable access to life-saving drugs and drugs that preserve quality of life to eligible patients, including for those who otherwise have limited access.
The 340B program and contract pharmacies are crucial to Washington's safety net providers by ensuring patients can access their prescribed medications, while providing additional resources to covered entities to serve vulnerable and underserved populations.
More than 20 other states have recognized the importance of contract pharmacies to the 340B program and have taken action to prohibit drug manufacturers from imposing restrictions on covered entities' ability to serve patients through contract pharmacies.
Federal courts, including the fifth and eighth circuit courts of appeals, have upheld states' authority to legislate on the distribution of 340B drugs through contract pharmacies.
The current restrictions imposed by drug manufacturers not only limit a patient's access to affordable medication but also jeopardize the financial savings that safety net providers depend on to reinvest in their operations, expand services, and support underserved communities.
The legislature, therefore, finds that prohibiting drug manufacturers from imposing restrictions on covered entities is necessary to protect Washington's vulnerable patients, their access to medications, and safety net providers' ability to serve their patients.
Furthermore, the legislature also finds that in order to understand the risks associated with such manufacturer restrictions, and prevent future restrictions that may reduce access to medications and harm Washington's vulnerable patients, it is necessary to collect information regarding the scope and impact of the 340B program in Washington.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"340B drug" means a drug that has been subject to an offer for reduced prices by a manufacturer under 42 U.S.C. Sec. 256b and is purchased by a covered entity.
"340B program" means the federal 340B drug pricing program, as described in 42 U.S.C. Sec. 256b.
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"Covered entity" means an entity authorized to participate in the federal 340B drug pricing program, as defined in 42 U.S.C. Sec. 256b(a)(4) as of the effective date of this section.
"Covered entity" also includes an offsite outpatient facility affiliated with an entity described in (a) of this subsection.
"Department" means the department of health.
"Hospital covered entity" means a covered entity described in 42 U.S.C. Sec. 256b(a)(4)(L) through (O).
"Manufacturer" means a person, corporation, or other entity engaged in the manufacture of drugs or devices. It includes an agent, contractor, or affiliate of a manufacturer.
"Package" has the same meaning as in 21 U.S.C. Sec. 360eee(11)(A) as of the effective date of this section.
"Pharmacy" has the same meaning as in RCW 18.64.011.
A manufacturer or third party acting on behalf of a manufacturer may not, directly or indirectly, deny, restrict, or prohibit the acquisition of a 340B drug by, or delivery of a 340B drug to, a covered entity, a pharmacy that is under contract with a covered entity to receive and dispense a 340B drug on behalf of the covered entity, or any location authorized by a covered entity to receive such 340B drug, unless federal law prohibits receipt of the 340B drug.
A manufacturer or third party acting on behalf of a manufacturer may not, directly or indirectly, require a covered entity to submit any claims, utilization, purchasing, or other data as a condition for allowing the acquisition of a 340B drug by, or delivery of a 340B drug to, a covered entity, a pharmacy that is under contract with a covered entity to receive and dispense a 340B drug on behalf of the covered entity, or any location authorized by a covered entity to receive such 340B drug, unless federal law requires such data sharing.
In addition to any other remedy provided by law, a covered entity may file a civil action against a manufacturer or a third party acting on behalf of a manufacturer for a violation of section 3 of this act. If a court finds that the manufacturer or third party acting on behalf of a manufacturer violated section 3 of this act, the court may enjoin the violation and award a civil penalty of up to $5,000 per day for each violation, as well as reasonable attorneys' fees and costs. Each package of 340B drugs subject to a prohibited act under section 3 of this act constitutes a separate violation.
The attorney general may bring an action in the name of the state, or as parens patriae on behalf of persons residing in the state, to enforce section 3 of this act. For actions brought by the attorney general to enforce the provisions of section 3 of this act, the legislature finds that the practices covered by section 3 of this act are matters vitally affecting the public interest for the purpose of applying the consumer protection act, chapter 19.86 RCW. For actions brought by the attorney general to enforce section 3 of this act, a violation of section 3 of this act is not reasonable in relation to the development and preservation of business and is an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the consumer protection act, chapter 19.86 RCW.
Nothing in this chapter is to be construed or applied to conflict with federal law and related regulations, including 21 U.S.C. Sec. 355-1, or other laws of this state, if the state law is compatible with applicable federal law.
Annually on or before April 1st of each year, following the conclusion of a hospital covered entity's fiscal year, a hospital covered entity shall report the following information to the department concerning the hospital covered entity's participation in the 340B program for the previous fiscal year:
The following information for the hospital covered entity:
Name;
Service address;
340B program identification number;
Designation of entity type, as specified in 42 U.S.C. Sec. 256b(a)(4)(L) through (O); and
The facility's national provider identification number;
A description of how the hospital covered entity uses savings from participation in the 340B program to benefit its community through programs and services funded in whole or in part by savings from the 340B program, including services that support community access to care and improve access to lifesaving medications, which the hospital covered entity could not continue without savings from the 340B program;
The annual estimated savings from the 340B program to the hospital covered entity, comparing the acquisition price of drugs under the 340B program to the wholesale acquisition cost;
A comparison of the hospital covered entity's savings under the 340B program to the hospital covered entity's total drug expenditures, including examples of the hospital covered entity's top drugs purchased through the 340B program; and
A description of the hospital covered entity's internal review and oversight of the 340B program, which must meet the federal health resources and services administration's program rules and guidance for compliance.
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The department shall prepare a template reporting form for hospital covered entities to use to fulfill the reporting requirements of this section.
The department shall make the reported information available on the department's website.
The department may issue a fine, in accordance with RCW 43.70.095, of $1,000 per day for a hospital covered entity that fails to provide the information required by this section by the date required.
If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.
If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2026, in the omnibus appropriations act, this act is null and void.