Official Summary Text
HB2965 - 572R - Fiscal Note
BILL
#
��� HB 2965
TITLE:
���
covered entities;
340B drugs; distribution
SPONSOR:
��� Lopez
PREPARED
BY:
��� Chandler
Coiner
STATUS:���
As
Introduced
Description
Under
current federal law, the 340B Drug Pricing Program requires drug manufacturers
to provide outpatient drugs at significantly discounted prices to qualifying
covered entities, such as hospitals and community health centers, that serve a
high percentage of low-income patients. This bill would prohibit prescription
drug manufacturers from, either directly or indirectly, limiting the
acquisition/delivery of a 340B drug to a 340B-covered entity or its contracted
pharmacies. The bill would authorize the Arizona State Board of Pharmacy to
investigate any complaint of a violation of this prohibition.
Estimated
Impact
We
estimate the bill could potentially have impacts on: the Arizona Health Care
Cost Containment System (AHCCCS); state/local employee health plans; commercial
health plans and Insurance Premium Tax (IPT) collections; and the Arizona State
Board of Pharmacy. In general, we estimate these impacts would materialize to
the extent that drug manufacturers restrict 340B drug acquisition or the use of
contract pharmacies under current law, which we lack definitive data on.
1.
AHCCCS
: We estimate the
bill would result in the loss of Medicaid prescription drug rebates to the
extent that the bill increases the number of drugs acquired through the 340B
program, which are ineligible for these rebates (known as the "duplicate
discount" prohibition). Medicaid drug rebates are deposited into the
Prescription Drug Rebate Fund, which is used to offset the General Fund costs
of the AHCCCS program. While it is possible the savings from the 340B discounts
could be passed on to AHCCCS and its contracted health plans�thereby offsetting
the loss of the rebates�this would largely be determined by reimbursement rate
negotiations between the AHCCCS health plans and the covered entities, which
cannot be determined in advance. We have asked AHCCCS for its estimate of the
bill's fiscal impact, but we have not yet received a response.
2.
State/Local Employee
Health Plans
:
We estimate that, similar to AHCCCS, the bill could result in the loss of
prescription drug rebates that are collected by state/local government employee
health plans. Although there is no federal prohibition on "duplicate
discounts" like there is in the Medicaid context, manufacturer contracts
will typically exclude 340B drugs from its rebate program. Any loss in rebates under
the state plan would reduce Health Insurance Trust Fund (HITF) revenues. The
General Fund pays approximately 50% of the employer share of HITF costs. We
have asked the Arizona Department of Administration (ADOA) for its estimate of
the bill's fiscal impact on HITF, but we have not yet received a response. A
health care information technology and research company estimates that placing limits
on manufacturers' contract pharmacy policies (similar to HB 2965) would reduce
overall state/local employee health plan rebates in Arizona by between $(1.9)
million and $(7.5) million. However, because we lack the data necessary to
independently verify this estimate, we have asked ADOA to provide its
perspective on this analysis.
3.
Commercial Insurance
and IPT
:
We estimate that the bill could result in the loss of prescription drug rebates
that are collected by commercial health plans for the reasons discussed above. To
the extent that the loss of these rebates translates to an increase in
premiums, this would generate General Fund revenue from the 2% IPT on health
insurance premiums. The health care information technology and research company
analysis referenced above estimates an overall reduction in rebates for
employer-based health plans in Arizona by between $(15.3) million and $(58.9)
million, which we cannot independently verify.
4.
Arizona State Board
of Pharmacy
:
The board estimates the bill would increase the number of complaints that it
receives, but it did not attempt to quantify the number of additional
complaints, nor the associated administrative costs. Instead, the board stated
the bill would make it less likely that the board is able to comply with an
Auditor General recommendation that all complaints be adjudicated within 180
days of receipt.
3/26/26
Current Bill Text
Read the full stored bill text
HB2965 - 572R - I Ver
REFERENCE TITLE:
covered entities; 340B drugs; distribution
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HB 2965
Introduced by
Representative
Lopez
AN
ACT
Amending title 32, chapter 18, article 3,
Arizona Revised Statutes, by adding section 32-1980.01; relating to the
Arizona state board of pharmacy.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 32, chapter 18, article 3,
Arizona Revised Statutes, is amended by adding section 32-1980.01, to read:
START_STATUTE
32-1980.01.
340B drug distribution; interference prohibited; enforcement;
rules; definitions
A. A manufacturer or repackager, or
an agent or affiliate of a manufacturer or repackager, may not, either directly
or indirectly, do either of the following:
1. Deny, restrict, prohibit,
discriminate against or otherwise limit the acquisition of a 340B drug by or
the delivery of a 340B drug to a 340B covered entity, a pharmacy contracted
with a 340B covered entity or a location authorized by the 340B covered entity
to receive 340B drugs unless the receipt of the 340B drug is prohibited by the
United States department of health and human services.
2. Require a 340B covered entity or a
pharmacy contractED with a 340B covered entity to submit any claims or
utilization data as a condition for allowing the acquisition of a 340B drug by
or THE delivery of a 340B drug to a 340B covered entity or a pharmacy
contractED with a 340B covered entity unless the claims or utilization data
sharing is required by the United States department of health and human
services.
B. The board may investigate any
complaint of a violation of subsection A of this section by a person or entity
that is permitted or licensed by the board and may impose discipline,
suspension or revocation on the permitted or licensed person or entity as
provided in this chapter.
C. A violation of subsection A of
this section is subject to enforcement by the attorney general as an unlawful
practice pursuant to section 44-1522. Each package of 340B
drugs that is determined to be subject to a prohibited act under subsection A
of this section constitutes a separate violation.
D. The board may adopt rules to
implement this section.
E. This section does not create a
private cause of action against a person or entity acting in violation of
subsection A of this section.
F. This section may not be construed
or applied to be less restrictive than any federal law as to any person or
entity regulated by this section. Limited distribution of a drug
required under 21 United States Code section 355-1 is not a violation of this
section. Limited distribution of a controlled substance pursuant to
applicable state or federal law or a court order is not a violation of this
section. This section may not be construed or applied to be in conflict
with or less restrictive than either:
1. Any applicable federal law and
regulations adopted pursuant to that law.
2. Any other law of this state if the
state law is compatible with the applicable federal law.
G. For
the purposes of this section:
1. "Repackager"
has the same meaning prescribed in 21 United States Code section 360
eee
(16).
2. "340B covered entity"
has the same meaning prescribed in section 20-3341.
3. "340B drug" means a drug
that MEETS all of the following:
(
a
) iS A
covered outpatient drug within the meaning of 42 United States Code section 256
b
.
(
b
) Has been
subject to any offer for reduced prices by a manufacturer under 42 United
States Code section 256
b
(
a
)(1).
(
c
) Is
purchased by a 340B covered entity, including that it would have been purchased
but for the restriction or limitation described in subsection A of this
section.
END_STATUTE
Sec. 2.
Severability
If a provision of this act or its
application to any person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of the act that can be given effect
without the invalid provision or application, and to this end the provisions of
this act are severable.