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W.Va. Senate committee advances bill regarding prescription drug distribution to safety net providers and contract pharmacies

By Autumn Shelton, West Virginia Press Association

CHARLESTON, W.Va. – A bill that would prevent prescription drug manufacturers from denying, restricting or prohibiting the acquisition of a 340B prescription drug to safety net providers and contract pharmacies has advanced in the West Virginia Legislature. 

The committee substitute for SB 325 is now headed to the Senate Judiciary Committee after members of the Senate Committee on Health and Human Resources, on Tuesday, heard from various healthcare representatives regarding the bill. 

As explained during the meeting, in order to avoid any potential litigation, the committee substitute for SB 325 changes some language from the introduced bill and includes preemptive language stating the bill shall not be in conflict with any federal law or state regulation. 

Additionally, the bill sets forth a civil penalty of $50,000 for each violation and states that the violator shall be subject to “any and all actions, including cease and desist orders, civil penalties, and restitution . . . except that there shall be no right to bring a private cause of action.” 

SB 325 is similar to HB 4892.

The first speaker on the committee substitute was Matt Walker, representing the West Virginia Primary Care Association. 

According to Walker, the preemptive language in the committee substitute for SB 325 helps avoid a court challenge because it doesn’t include language that may regulate the federal 340B program. 

“I would be remiss not to say the two states that have passed a similar bill, Louisiana and Arkansas, there has been litigation that arose from those, and they are at various stages in that process,” Walker said. 

Phil Reale, representing Pharmaceutical Research and Manufacturers of America (PhRMA), stated he disagreed with Walker. 

He cited a Fourth Circuit Court of Appeals judgment from Jan. 2023 saying, “The 340B does not require delivery to an unlimited number of contract pharmacies and Congress never said that drug makers must deliver discounted section 340B drugs to an unlimited number of contract pharmacies.” 

Reale stated that the number of 340B contract pharmacies has grown by “several thousand percent” over the last 12 years. 

“Which, to me, represents a huge cost shift, and it supplants the intent of what the 340B program was – and that’s designed to help patients who need prescription drugs that can’t otherwise afford them or don’t have insurance that covers them. It was intended for qualified clinics and hospitals that have an abundance of charity care . . . and they come at a 50-70% discount to attack whatever needs the population has.” 

When asked by Sen. Patricia Rucker, R-Jefferson, how many 340B clinics are located in West Virginia, Reale estimated there to be 37. 

He added that many charitable clinics use Walgreens, CVS and Walmart to provide prescription drugs they don’t have in stock at the clinic. 

“[Those pharmacies] have over 50% of this market, and the question becomes the accountability factor here between whether those billions of dollars of discounts are really reaching the patient in need,” Reale said, adding, “The question is, ‘Do we exacerbate a situation and create a scenario in which we overprescribe in order to realize a profit, and how does that really help our system? We’re shifting costs, we’re causing people to have more consumption of drugs than perhaps they need. […] The fact of the matter remains that there’s serious U.S. Constitutional issues here – whether it’s preemption, whether it’s commerce clause – where directing a manufacturer to do something by our state that’s not otherwise required of them in the federal law.” 

Reale said the 340B program should be more transparent. 

Committee Vice-Chair and bill lead sponsor, Sen. Tom Takubo, R-Kanawha, stated his concern is that patients, who now have access to prescription medication at a local 340B contracted pharmacy, may have to drive an hour or longer to get their medications, should this bill not be passed. 

Following a statement made by Reale that pharmacies may not be giving patients the 340B price, Sen. Vince Deeds, R-Greenbrier, asked for clarification on whether or not critical access hospitals or pharmacies are charging their 340B customers more than they should. 

Reale responded that based on national statistics and other information he has read, he believes they are. 

Deeds stated he would follow up with Reale to discuss this at a later time. 

Lastly, Karen Bowling, representing hospitals, noted that West Virginia has “access to care problems.”

“One of the things that 340B was able to do for our hospitals in our state is allow us to serve people who wouldn’t ordinarily be served. This is a very important program to our state,” Bowling said, adding that while there may be bad actors, there are no facts that West Virginia’s hospitals “have done anything wrong with 340B savings.” 

“In our small hospitals, especially our critical access hospitals, they are incredibly important in our state,” Bowling said. “If we close a critical access hospital, there’s a whole population of people that can’t be served.”

She said many of these smaller hospitals serve the majority of those who need 340B services, especially those living in small communities where “mom and pop” pharmacies deliver prescription drugs to their home. 

“I think this is an important bill,” Bowling concluded. “I think it’s a step that West Virginia can take to demonstrate our commitment to hospitals, community health centers and small and large pharmacies in our state to ensure we have programs that support our patient population.”

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