On April 22, 2021, the Indiana General Assembly passed a bill (HB 1405) that protects Indiana 340B safety-net providers from discriminatory and predatory practices by pharmacy benefit managers (PBMs). HB 1405 is expected to be signed into law by the governor of Indiana, Eric J. Holcomb, next week and without objection. HB 1405 prohibits a contract between a PBM and a 340B safety-net provider, including the pharmacies with which such providers contract, from including certain provisions that discriminate against 340B safety-net providers, including:
- A reimbursement rate for prescription drugs that would diminish the 340B benefit;
- A fee or adjustment that is not imposed on or exceeds what is imposed on a non-340B pharmacy;
- Any provision that prevents or interferes with an individual’s choice to receive a prescription drug from a 340B safety-net provider, including the administration of such drug by the provider;
- Any provision that excludes a covered entity or its contracted pharmacy from the PBM’s networks based on the covered entity’s participation in the 340B Program; or
- Any other provision that discriminates against a 340B safety-net provider.
These 340B-related provisions of HB 1405 apply to PBMs that contract within Indiana, including PBMs working on behalf of Medicaid managed care entities, but it does not apply to Medicaid fee-for-service plans. The impending law states that a violation of the 340B-related provisions constitutes an unfair or deceptive act or practice in the business of insurance, which could result in penalties up to $50,000 per violation.
Indiana’s taxpayers, 340B safety-net providers, and underserved communities all congratulate and thank the Indiana General Assembly for passing such vital and meaningful legislation. The impending law not only protects the important programs and healthcare services that Indiana safety-net providers furnish, but it also reflects a general sense that underserved communities in Indiana remain important to state lawmakers, which is of notable significance during the COVID pandemic. Community Voices for 340B and its members laude the state of Indiana and look forward with hope to continued protection of our Nation’s most vulnerable communities.