1     
MEDICATION AMENDMENTS

2     
2024 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Evan J. Vickers

5     
House Sponsor: ____________

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to pharmaceutical drugs.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     merges provisions related to federally qualified health centers and 340B entities;
14          ▸     enacts provisions related to how insurers and pharmacy benefit managers interact
15     with 340B entities; and
16          ▸     limits how a pharmaceutical company can interact with a 340B entity, directly or
17     indirectly.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          31A-46-310, as enacted by Laws of Utah 2021, Chapter 317
25          31A-48-102, as last amended by Laws of Utah 2022, Chapter 198
26     ENACTS:
27          31A-48-104, Utah Code Annotated 1953
28     REPEALS:
29          31A-46-309, as enacted by Laws of Utah 2020, Chapter 275
30          31A-48-101, as enacted by Laws of Utah 2020, Chapter 198
31     

32     Be it enacted by the Legislature of the state of Utah:
33          Section 1. Section 31A-46-310 is amended to read:
34          31A-46-310. Prohibited actions .
35          [(1) As used in this section, "federally qualified health center":]
36          [(a) means the same as that term is defined in 42 U.S.C. Sec. 1395x(aa)(4); and]
37          [(b) includes the pharmacy or pharmacies that are operated by or contract with a
38     federally qualified health center described in Subsection (1)(a) to dispense drugs purchased
39     through the federally qualified health center.]
40          (1) As used in this section, "insurance entity" means:
41          (a) an insurer or an agent of an insurer; or
42          (b) a pharmacy service entity or an agent of a pharmacy service entity.
43          (2) This section applies to a contract entered into or renewed on or after January 1,
44     [2022, between an insurer and a pharmacy described in Subsection (1)(b)] 2025, between a
45     340B entity and an insurance entity.
46          (3) An [insurer] insurance entity may not vary the amount that the [insurer] insurance
47     entity reimburses to a [federally qualified health center] 340B entity for a drug on the basis of
48     whether:
49          (a) the drug is a 340B drug; or
50          (b) the pharmacy dispensing the drug is a 340B entity.
51          (4) Subsection (3) does not apply to a drug reimbursed, directly or indirectly, by the
52     Medicaid program.
53          (5) An [insurer or an insurer's pharmacy service] insurance entity may not:
54          (a) on the basis that a [federally qualified health center] 340B entity participates,
55     directly or through a contractual arrangement, in the 340B drug discount program:
56          (i) refuse to contract with the 340B entity;
57          [(i)] (ii) assess a fee, charge-back, or other adjustment on a [federally qualified health
58     center] 340B entity;
59          [(ii)] (iii) restrict access to the [insurer's] insurance entity's pharmacy network;
60          [(iii)] (iv) require the [federally qualified health center] 340B entity to enter into a
61     contract with a specific pharmacy to participate in the [insurer's] insurance entity's pharmacy
62     network;
63          [(iv)] (v) create a restriction or an additional charge on a patient who chooses to
64     receive drugs from a [federally qualified health center] 340B entity; [or]
65          (vi) modify a copayment or other cost-sharing requirement of a patient of the 340B
66     entity; or
67          [(v)] (vii) create any additional requirements or restrictions on the [federally qualified
68     health center] 340B entity; [or]
69          (b) base drug formulary or drug coverage decisions on whether a drug is a 340B drug
70     or whether a dispensing pharmacy is a 340B entity;
71          (c) transfer the benefit of 340B drug discount program savings from a 340B entity to an
72     insurance entity;
73          (d) unilaterally modify the definition of pharmacy in a way that is inconsistent with
74     Utah law through a contract, provider manual, or other means;
75          (e) require the 340B entity to reverse, resubmit, or clarify a claim for a 340B drug after
76     an initial adjudication;
77          (f) charge or hold a 340B entity responsible for a fee related to a claim:
78          (i) that is not apparent at the time of claim processing;
79          (ii) that is not reported on the remittance advice of an adjudicated claim; or
80          (iii) after the initial claim is adjudicated at the point of sale; or
81          [(b)] (g) require a claim for a drug to include a modifier to indicate that the drug is a
82     340B drug unless the claim is for payment, directly or indirectly, by the Medicaid program.
83          Section 2. Section 31A-48-102 is amended to read:
84          31A-48-102. Definitions.
85          As used in this chapter:
86          (1) "340B drug" means the same as that term is defined in Section 31A-46-102.
87          (2) "340B entity" means the same as that term is defined in Section 31A-46-102.
88          [(1)] (3) (a) "Drug" means a substance that is:
89          (i) (A) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of
90     disease in humans; and
91          (B) recognized in or in a supplement to the official United States Pharmacopoeia, the
92     Homeopathic Pharmacopoeia of the United States, or the official National Formulary;
93          (ii) required by an applicable federal or state law or rule to be dispensed by prescription
94     only;
95          (iii) restricted to administration by practitioners only;
96          (iv) a substance other than food intended to affect the structure or a function of the
97     human body; or
98          (v) intended for use as a component of a substance described in Subsection [(1)(a)(i),
99     (ii), (iii), or (iv)] (3)(a)(i), (ii), (iii), or (iv).
100          (b) "Drug" does not include a dietary supplement.
101          [(2)] (4) "Insurer" means the same as that term is defined in Section 31A-22-634.
102          [(3)] (5) "Manufacturer" means a person that is engaged in the manufacturing of a drug
103     that is available for purchase by residents of the state.
104          (6) "Pharmaceutical manufacturer" means the same as that term is defined in Section
105     31A-46-102.
106          (7) "Pharmacy" means the same as that term is defined in Section 58-17b-102.
107          [(4)] (8) "Rebate" means the same as that term is defined in Section 31A-46-102.
108          [(5)] (9) "Wholesale acquisition cost" means the same as that term is defined in 42
109     U.S.C. Sec. 1395w-3a.
110          Section 3. Section 31A-48-104 is enacted to read:
111          31A-48-104. Prohibited conduct.
112          A pharmaceutical manufacturer, or any person involved in the distribution of a
113     pharmaceutical manufacturer's products, may not directly or indirectly:
114          (1) prohibit a pharmacy from contracting with a 340B entity, including by denying the
115     pharmacy access to a drug that is manufactured by the pharmaceutical manufacturer;
116          (2) prohibit a 340B entity from contracting with a pharmacy, including by denying the
117     340B entity access to a drug that is manufactured by the pharmaceutical manufacturer;
118          (3) deny or restrict a 340B entity from:
119          (a) acquiring or dispensing a 340B drug; or
120          (b) receiving 340B drug discount program pricing for a 340B drug, including by
121     imposing a time limitation on a 340B entity to replenish or submit a claim for a 340B drug;
122          (4) require a 340B entity to purchase a 340B drug from a certain supplier if the
123     pharmaceutical manufacturer, or person involved in the distribution of the pharmaceutical
124     manufacturer's products, would otherwise permit the 340B entity to purchase a drug that is not
125     a 340B drug from the supplier; or
126          (5) otherwise interfere with:
127          (a) a contract between a pharmacy and a 340B entity; or
128          (b) the ability of a pharmacy and a 340B entity to enter into a contract.
129          Section 4. Repealer.
130          This bill repeals:
131          Section 31A-46-309, Reimbursement -- Prohibitions.
132          Section 31A-48-101, Title.
133          Section 5. Effective date.
134          This bill takes effect on May 1, 2024.