Existing federal law requires the United States Secretary of Health and Human Services to enter into an agreement with each manufacturer of covered outpatient drugs to ensure the amount a covered entity is required to pay for those drugs does not exceed the average manufacturer price of the drug under the federal Medicaid program. Existing state law requires a covered entity to dispense only drugs subject to these federal pricing requirements to Medi-Cal beneficiaries. Existing law prohibits a pharmacy benefit manager from discriminating against a covered entity or its pharmacy in connection with dispensing a drug subject to federal pricing requirements or preventing a covered entity from retaining the benefit of discounted pricing for those drugs.

This bill would prohibit a prescription drug manufacturer from engaging in discriminatory practices that would impose additional conditions, prohibit, restrict, deny, or interfere with a qualifying nonhospital 340B community clinic’s purchase or delivery of a drug subject to federal pricing requirements if the qualifying nonhospital 340B community clinic utilizes a specified pharmacy, including a contract pharmacy, that dispenses the drug to an eligible patient of the qualifying nonhospital 340B community clinic. The bill would define “discriminatory practices” and “qualifying nonhospital 340B community clinic” for these purposes. The bill would require qualifying nonhospital 340B community clinics to annually perform specified activities to ensure compliance with program rules and guidance from the federal Health Resources and Services Administration. The bill would make related intent statements.