HJAR May/Jun 2024

HEALTHCARE JOURNAL OF ARKANSAS I  MAY / JUN 2024 19 Pharmaceutical Research and Manufactur- ers of America (PhRMA), representing many biopharmaceutical research companies and drug companies, sued the insurance com- missioner in federal court, asserting that the state is preempted from enforcement. Both the United States District Court for the East- ern District of Arkansas and the 8th U.S. Cir- cuit Court of Appeals ruled against PhRMA. Enforcement and Consequences In order for the Arkansas Insurance Department to bring an enforcement action against an individual pharmaceutical manu- facturer, a complaint that asserts noncom- pliance with the act must be filed against that particular manufacturer with the department. Many complaints have been filed against drug companies for their con- tinued restrictions on distribution of 340B drugs; however, investigation of those com- plaints was stalled at various stages of the judicial process. Meanwhile, throughout the court proceedings, the drug companies have continued to restrict the distribution of 340B drugs, which is causing major finan- cial hardship on covered entities and on patients. March 12, 2024, is the date that the court of appeals ruled against PhRMA. Since that date, the Arkansas Insurance Department has been following its state-mandated pro- cedure for providing notice to the manu- facturers that have complaints filed against them. The drug companies have responded in a variety of ways: Some have lifted their restrictions and are complying with Act 1103, and some are taking the exact oppo- site approach and adding restrictions. For those adding restrictions, some are carving out Arkansas as a state that must comply with those restrictions, and some are not. For those not followingArkansas’law, the Arkansas Insurance Department has the authority to issue a notice of public hear- ing to determine the extent of the penalties for noncompliance and then to issue fines on the drug companies. After a company is fined, it is required to notify the state in which it is incorporated that a government entity has levied fines against it. That dec- laration, alone, can jeopardize a company’s ability to participate in the Medicare pro- gram and can lead to other penalties. Following Suit While Arkansas’Act 1103 of 2021 was the first of its kind in the nation, other states are passing similar legislation to curtail the injurious behavior of pharmaceutical manufacturers. Louisiana passed a state law after Arkansas, which was also met with a federal lawsuit filed by PhRMA and AstraZeneca. Interestingly, AstraZeneca left PhRMA in May 2023. West Virginia became the third state to enact a 340B contract pharmacy protection law, and many other states are in various stages of passage. Sustain Act While states are fighting one-by-one against the drug company practices that are reducing the program benefits to cov- ered entities and patients, a bipartisan group of six U.S. Senators — John Thune, R-S.D.; Shelley Moore Capito, R-W.Va.; Senator Jerry Moran, R-Kan.; Debbie Stabenow, D-Mich.; Tammy Baldwin, D-Wis.; and Ben- jamin L. Cardin, D-Md. — have been seeking input from stakeholders on opportunities to improve the 340B program at the fed- eral level. First, on June 16, 2023, the group asked for written responses to six specific ques- tions to be emailed no later than July 28, 2023. More than 250 responses were sub- mitted. Those responses precipitated draft legislation that was made public on Feb. 2, 2024. Known as the SUSTAIN 340B Act (Supporting Underserved and Strengthen- ing Transparency, Accountability, and Integ- rity Now and for the Future of 340BAct), the bill covers the following topics: • Contract pharmacies. • Definition of patient. • Child sites. • Transparency. • Program integrity. • Preventing duplicate discounts. • Equitable treatment of covered entities and pharmacies. • User fees. • Medicaid and CHIP Payment and Access Commission (MACPAC) report and Health and Human Services (HHS) study. Once again, theArkansas Hospital Asso- ciation, Community Health Centers of Arkansas, and the Arkansas Pharmacists Association joined forces to respond, from Arkansas, with a unified voice to the invi- tation to comment by the April 1, 2024, deadline. The associations’ response let- ter emphasized the importance of protect- ing contract pharmacies and incentivizing them to continue to dispense 340B drugs to patients on behalf of covered entities; asked that a patient be defined as HRSAhas defined it for more than 30 years; made rec- ommendations for appropriate transpar- ency requirements; recognized the impor- tance of prohibiting duplicate discounts in the Medicaid program; and insisted that any user fees required to administer the pro- gram be carefully assessed to ensure that participants — often already woefully under resourced — are not further harmed. Next Steps As program benefits are restored, Arkan- sas’ covered entities are working with their contract pharmacies to ensure that the drug companies are following Arkansas’ law. When the drug companies continue to restrict access to 340B drugs, complaints are filed with the Arkansas Insurance Department. Across the country, Arkansas’ covered entities and pharmacies, along with contractors and third-party administrators of the 340B program, are sharing their expe- riences with other states as those states pass their own unique laws to respond to the cri- sis that the drug companies have created. Also, proponents of the 340B program are continuously advocating at the federal level for even greater success of the program. Because Arkansas patients depend on access to care that the 340B program affords, our advocacy never stops. n