AB 434 — Revises provisions governing prescription drugs. (BDR 57-652)

(ReprintedAssembly withBill amendmentsNo. adopted on April 24, 2023) FIRST REPRINT A.B.

434434–Committee ASSEMBLYon BHealth ILLNand O.Human Services CHAPTER..........

434–C OMMITTEE ON H EALTH AND H UMAN SERVICES M ARCH 27, 2023 ____________ Referred to Committee on Commerce and Labor SUMMARY—Revises provisions governing prescription drugs.

(BDR 57-652) FISCAL NOTE:

Effect on Local Government:

May have Fiscal Impact.

Effect on the State:

Yes.

~ EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

Existing federal law creates a program, known as the 340B Program, by which certain hospitals and other facilities that provide health care to low-income patients are able to purchase certain drugs at discounted rates.

§ 256b) ExistingExistingnts law prohibits a pharmacy benefit manger from prohibiting a pharmacist or pharmacy from taking certain actions to assist a person in obtaining a less expensive alternative or generic drug.

(NRS 683A.179) Existing law imposessimposes certain requirements relating to the operation of health carriers.

(NRS 687B.470- 687B.850) Sections 1, 3, 6 and 7 of this bill prohibit pharmacy benefit managers and health carriers, including governmental entities that provide coverage for employees,340B from:Program to purchase drugs at a discounted rate or a pharmacy that contractsn the with such an entity with regard to reimbursement;

(1) discriminating against a covered entity that participates in the with such an entity with regard to reimbursement;

(3) excluding such an entity or pharmacy from an insurance - *AB434_R1* – 2 – network because the entity or pharmacy participates in that program;

Section 1 exempts from those prohibitions a pharmacy benefit manager that manages prescription drug basis.sections do not prohibit the Department of Health and Human Services, thes of those Division of Health Care Financing and Policy of the Department of Health and Human Services or a Medicaid managed care organization from taking certain actions necessary to comply with federal law or ensure the financial stability of the Medicaid program.

Existing law authorizes the Department of Health and Human Services to administer a program pursuant to federal law to provide therapeutics to treat certain persons439.529) whoSection have9 beenof diagnosedthis withbill prescribes certain limitations on the humanuse immunodeficiencyof virus.money allocated to the program.

(NRS 439.529) Section 98 of this bill prescribesrequires certain limitations on the useprogram ofto moneytake certain actions and refrain from certain activity to ensure that a covered provider thatrtainthat participates in the 340B Program to purchase drugs at a discounted rate or a pharmacy that contracts with such a provider receives the full benefit of participating in the Program.

Section 8 additionally prohibits the program administered- by82nd Session (2023) – 2 – provider or contract pharmacy to participate in the Departmentnetwork from:of the program ind certain circumstances;

(1) denying a request from such a covered provider or contract(2) pharmacyengaging to participate in the network of the program in provider or contract pharmacy.engaging in certain discrimination against a covered THEprovider PEOPLEor OFcontract THEpharmacy. STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

EXPLANATION – Matter in bolded italics is new;

matter between brackets [omitted material] is material to be omitted.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

(e) Restrict the methods by which a covered entity or contract pharmacy may dispense or deliver a 340B drug or the entity through which a covered entity may dispense or deliver such a - *AB434_R1* – 3 – drug in a manner that does not apply to drugs that are not 340B drugs;

or (f) Prohibit a covered entity or contract pharmacy from purchasing a 340B drug or interfere with the ability of a covered entityent2.y orThis contractsection pharmacydoes tonot:o purchase a 340B drug.

2.(a) Apply to a pharmacy benefit manager that has entered into a contract with the Department of Health and Human Services pursuant to NRS 422.4053 when the pharmacy benefit manager is managing prescription drug benefits under Medicaid, including, - 82nd Session (2023) – 3 – without limitation, where such benefits are delivered through a Medicaid managed care organization.

This(b) sectionProhibit does not apply to a pharmacy benefit manager that has entered into a contract with the Department of Health and Human ServicesServices, pursuant to NRS 422.4053 when the pharmacyDivision benefitof managerHealth isCare managingFinancing prescriptionand drugPolicy benefitsof underthe Medicaidmanaged wherecare reimbursementorganization isfrom providedtaking onsuch aactions fee-for-as serviceare basis.necessary to:

(1) Prevent duplicate discounts or rebates where prohibited by 42 U.S.C.

§ 256b(a)(5)(A);

or (2) Ensure the financial stability of the Medicaid program, including, without limitation, by including or enforcing provisions in any contract with a pharmacy benefit manager entered into pursuant to NRS 422.4053.

(e) “Network”“Medicaid meansmanaged a defined set of providers of health care whoorganization” arehas underthe contractmeaning withascribed a pharmacy benefit manager or third party to provideit healthin care42 servicesU.S.C. to covered persons.

§ 1396b(m).

who are under contract with a pharmacy benefit manager or thirde party to provide health care services to covered persons.

(b) Assess any fee, chargeback, clawback or adjustment against a covered entity or contract pharmacy on the basis that the covered- entity82nd orSession contract(2023) pharmacy– dispenses4 a– 340B drug or otherwise limit the ability of a covered entity or contract pharmacy to receive the full benefit of purchasing the 340B drug at or below the ceiling price, as calculated pursuant to 42 U.S.C.

- *AB434_R1* – 4 – (c) Exclude a covered entity or contract pharmacy from any network because the covered entity or contract pharmacy dispenses a 340B drug;

or (f) Prohibit a covered entity or contract pharmacy from purchasing a 340B drug or interfere with the ability of a covered entity or contract pharmacy to purchase a 340B drug.

This section does not prohibit the Department of Health and Human Services, the Division of Health Care Financing and Policy of the Department of Health and Human Services or a Medicaid managed care organization from taking such actions as are necessary to:

(a) Prevent duplicate discounts or rebates where prohibited by U.S.C.

§ 256b(a)(5)(A);