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HB562
HOUSE OF REPRESENTATIVES
H.B. NO.
562
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
relating
to consumer protection
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION
1.
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The legislature finds that the
federal 340B drug pricing program is essential for providing Hawaii's low‑income
and uninsured populations with access to healthcare and medications.
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The federal program requires drug
manufacturers to offer significant discounts on outpatient medications to
eligible nonprofit hospitals and safety net providers, rural hospitals,
community health centers, and Native Hawaiian health centers.
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The
legislature further finds that the 340B drug pricing program helps healthcare
providers stretch limited resources, allowing hospitals to reinvest savings
into essential community benefits.
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These
benefits include financial assistance for low‑income patients, free
wellness visits, screenings, vaccinations, transportation to appointments,
health education classes, and workforce development programs.
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In Hawaii, the drug pricing program also
helps support unique services, like the integration of Native Hawaiian health
practices into patient care.
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The
legislature recognizes that, despite the importance of the drug pricing program,
drug manufacturers have consistently tried to undermine its benefits.
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Since 2020, some drug manufacturers have
limited the ability of 340B entities to prescribe drugs through contract
pharmacies.
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This is an unfair practice
that creates a barrier to health care, especially for patients in rural areas, where
many hospitals do not have in‑house pharmacies.
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More than eighty per cent of rural 340B
hospitals nationwide rely on contract pharmacies to dispense medications to
patients who might otherwise go without critically needed treatments.
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The
legislature notes that contract pharmacies are particularly crucial in Hawaii,
where geographic isolation makes it difficult for many residents to access
medications.
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Partnering with contract
pharmacies in the State's rural communities allows hospitals, federally
qualified health centers and federal Ryan White program participants to ensure
that their patients receive their prescribed medications without needing to
travel long distances.
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Additionally, the
partnerships provide Hawaii's patients access to some specialty drugs that are
only available through specific pharmacy channels.
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The legislature believes that the
restrictions imposed by drug manufacturers on contract pharmacy partnerships
not only limit patients' access to affordable medications but also jeopardize
the financial status of critical healthcare providers.
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Hospitals, federally qualified health
centers, and federal Ryan White program participants rely on the opportunity to
reinvest in their operations the difference between the 340B discounted drug
price and the amount reimbursed by insurance.
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Without access to contract pharmacies, hospitals face reduced savings,
which could result in cutbacks to essential healthcare programs.
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Accordingly, the purpose of this Act
is to preserve the integrity of the 340B program and prevent unfair practices
that are harmful to consumers by:
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(1)
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Prohibiting covered entities in the State from entering
into contracts with drug manufacturers that limit the covered entities' use of
contract pharmacies;
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(2)
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Voiding contract provisions that are
based on the maximum allowable cost payment model; and
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(3)
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Authorizing the attorney general to
bring a civil action for violations of this Act.
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SECTION 2.
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Chapter 481B, Hawaii Revised Statutes, is
amended by adding a new section to part I to be appropriately designated and to
read as follows:
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�481B-
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340B contract pharmacies; maximum
allowable cost basis; prohibited.
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(a)
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Beginning
June 30, 2025:
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(1)
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No
340B covered entity in the State shall enter
into a contract with a drug manufacturer, wholesale distributor, or an agent or
affiliate of a drug manufacturer or wholesale distributor, if provisions of the
contract directly or indirectly restrict or prohibit the acquisition of a 340B
drug through a contract pharmacy, unless the acquisition of that drug through a
contract pharmacy is prohibited by the United States Department of Human
Services; and
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(2)
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Any provision of a contract entered into for
a drug sold based on the maximum allowable cost payment model, where the payment
model was in effect on or before June 30, 2025, shall be void.
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(b)
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In
addition to any other remedy authorized by section 481B-25, the attorney
general may bring a civil action on behalf of any person or persons whose
rights under this section have been violated, against any person responsible
for violating this section.
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(c)
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For purposes of this section:
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"340B covered entity" means an
entity that participates in the 340B drug discount program authorized by 42
United States Code section 256b.
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"340B drug" means a drug dispensed
by a pharmacy and purchased by a 340B covered entity through the 340B drug
discount program authorized by 42 United States Code section 256b.
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"Contract pharmacy" means a
pharmacy that is not owned or operated by a covered entity but is contracted
with to dispense prescription drugs to eligible patients.
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"Manufacturer" has the same meaning
as defined in section 328-112.
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"Maximum allowable cost" is a
payment model for generic drugs that specifies the maximum amount that a
pharmacy can be reimbursed for a specific generic drug, regardless of a
manufacturer's price.
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"Pharmacy" has the same meaning as
defined in section 461‑1.
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"Wholesale distributor" has the
same meaning as defined in section 328-112.
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SECTION 3.
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This Act does not affect rights and duties
that matured, penalties that were incurred, and proceedings that were begun
before its effective date.
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SECTION 4.
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New statutory material is underscored.
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SECTION 5.
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This Act shall take effect upon its approval.
INTRODUCED BY:
_____________________________
Report Title:
Consumer
Protection; 340B Drug Discount Program; Maximum Allowable Cost
Description:
Prohibits covered entities in the State from entering into
contracts with drug manufacturers that limit the covered entities' use of
contract pharmacies.
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Voids contract
provisions for certain drugs if the provisions are based on the maximum
allowable cost payment model.
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Authorizes
the attorney general to bring a civil action for violations.
The summary description
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not legislation or evidence of legislative intent.