Covered entities and their contract pharmacies participating in the 340B Drug Pricing Program are navigating a rapidly changing access and reimbursement landscape. Recognizing the potential savings associated with 340B drugs, an increasing number of health plans and pharmacy benefit managers (PBMs) have implemented reimbursement structures designed to capture those savings by reimbursing pharmacies at lower rates for claims filled with 340B-acquired inventory. At the same time, pharmaceutical manufacturers have continued to impose new restrictions on 340B discounts and contract pharmacy access. In response to these developments, states are stepping in and implementing new rules for how 340B benefits can be delivered.
Prohibitions on 340B-Specific Reimbursement
One of the primary ways states have acted to protect the savings enjoyed by 340B covered entities is to prohibit discriminatory pricing by PBMs and payors. In recent years, several states have enacted legislation aimed at prohibiting 340B-specific reimbursement discrimination by PBMs and health plans, responding to concerns that payors were reimbursing 340B covered entities and contract pharmacies at rates lower than those paid for identical drugs dispensed outside the 340B Program.
These laws generally prohibit PBMs or insurers from identifying a claim as a “340B claim” for purposes of setting reimbursement, imposing reduced payment rates, or otherwise penalizing covered entities or their pharmacy partners solely because a drug was acquired under the 340B Program. At a high level, the statutes seek to require reimbursement parity by mandating that payment for a covered outpatient drug be based on the same reimbursement methodology regardless of whether the drug was purchased at 340B pricing.
Collectively, these laws reflect state efforts to prevent PBMs from recapturing 340B savings through the reimbursement system and to protect the financial integrity of safety-net providers participating in the program.
Recent examples of these laws include Maine’s Title 24-A §7754 which bars PBMs from reimbursing a 340B entity for 340B drugs at a rate lower than that paid for the same drug to entities that are not 340B entities, lowering reimbursement based on a claim’s 340B status, or otherwise treating 340B claims differently solely because the drug was acquired under the 340B program. The law also bars discriminatory terms and conditions, additional charges or restrictions, and PBM practices that interfere with patient choice.
Likewise, Rhode Island’s Senate Bill 114 expressly prohibits insurers, PBMs, manufacturers and other third-party payors from reimbursing 340B drugs at rates lower than those for non-340B drugs or from placing different terms, conditions, fees, or restrictions based solely on participation in the 340B Program. To date, approximately 30 states have passed similar legislation aimed at prohibiting discriminatory reimbursement tactics.
Pharmacies that continue to receive discriminatory 340B-specific reimbursement in these states may have specific legal rights against the applicable payor.
Prohibitions on Manufacturer Contract Pharmacy Restrictions
Over the past several years, pharmaceutical manufacturers have taken a variety of steps aimed at limiting the ability of 340B covered entities to use contract pharmacies or restricting access to discounted 340B pricing for drugs dispensed through those pharmacies. These have included refusing to ship 340B drugs to contract pharmacies, limiting covered entities to a single contract pharmacy; mandating the use of manufacturer-designated specialty pharmacies; conditioning 340B pricing on submission of detailed claim-level data; implementing alternative rebate distribution models that limit upfront 340B discounts; and imposing distribution restrictions that effectively exclude contract pharmacy arrangements. In response, multiple states have enacted legislation that prohibits manufacturers from limiting 340B pricing based on the dispensing location or distribution model. Under these laws, manufacturers are not permitted to condition access to 340B discounts on whether a covered entity dispenses drugs through an in-house pharmacy or a contract pharmacy.
By way of example, Colorado Senate Bill 25-07, enacted in 2025, prohibits manufacturers from restricting or discriminating against covered entities or their contract pharmacies in obtaining 340B drugs. The law also prohibits unnecessary data submission requirements, mandates public reporting of 340B savings and their use, and imposes limitations on how those savings may be spent.
Similarly, South Dakota’s Senate Bill 154, enacted in 2025, prevents manufacturers from interfering with contracts between 340B covered entities and pharmacies and from limiting the sale or delivery of 340B drugs to contract pharmacies. Other states such as Idaho, North Dakota, Nebraska, Oregon, and Tennessee have enacted or proposed laws with similar protections for contract pharmacy access, which often include reporting requirements or penalties for noncompliance. These laws help protect against manufacturer restrictions that could limit contract pharmacy access and force in-house dispensing or create burdensome administrative obligations.
These state-level efforts, though, have not been without legal challenge. Drug manufacturers have filed lawsuits in several states alleging that these laws interfere with federal 340B program requirements and unlawfully restrict commercial contracting practices. Courts have issued mixed decisions. In some instances, courts have allowed state laws to remain in effect, preserving protections for contract pharmacies; in others, enforcement has been temporarily blocked pending further review. These cases highlight the ongoing tension between state-level 340B protections and manufacturers’ federal preemption and Commerce Clause arguments.
How Frier Levitt Can Help
Covered entities should assess whether their state has enacted or is considering 340B-related legislation, review their contract pharmacy arrangements, and enhance compliance and reporting processes. At Frier Levitt, we help covered entities and contract pharmacies navigate state laws, structure compliant 340B arrangements, and protect access for patients. We provide tailored solutions to protect your organization’s interests. If you have questions or need to ensure your 340B arrangements are compliant, contact us to speak to an attorney.
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