SACRAMENTO, CA – Last week, Assemblymember Chris Rogers (D-Santa Rosa) introduced AB 1460, a bill to prohibit pharmaceutical manufacturers from placing contract pharmacy restrictions on health care providers that utilize the federal 340B discount drug program to serve low-income communities. This legislation is sponsored by the California Partnership for Health and California Primary Care Association Advocates.
"At a time when clinics and hospitals are struggling to provide care to low-income patients, pharmaceutical companies are making it even harder for them to access the benefits of the federal 340B program,” said Assemblymember Rogers. “We should be supporting our health care providers, not tying their hands. This bill will eliminate restrictions to accessing critical medications in underserved communities through the 340B program.”
The federal 340B Program, established in 1992, requires drug manufacturers to provide discounts on the outpatient prescription drugs they sell to certain eligible health care providers, referred to as “covered entities.” Since 2020, many drug manufacturers have introduced restrictions that diminish the ability of covered entities, such as Federally Qualified Health Clinics (FQHCs), to use 340B contract pharmacies to dispense medications to their patients. These restrictions often limit covered entities to one contract pharmacy location per clinic system, not per clinic location. This limits access for patients, specifically uninsured patients that are directly given the 340B program discounted drug price, and covered entities that rely on the pass-through savings to help fund their operations.
“Contract pharmacies are a critical partner in our efforts to ensure patients in underserved and remote communities, can have access to affordable prescription medication, through the federal drug discount program,” said Tory Starr, CEO Open Door Community Health Center. “However, placing unnecessary restrictions on how many pharmacies a local not-for-profit community health center, such as ours, can contract with is devastating to our ability to help ensure access to care and health equity in our communities.”
AB 1460 ensures that covered entities can use as many contract pharmacies necessary to serve their patients and receive the passed-through benefits of the 340B savings for ongoing patient care and expanded services for patients. The bill prohibits discriminatory practices that would impose additional conditions that would prohibit, restrict, deny, or interfere with a covered entity’s purchase, or delivery, of a drug eligible for discounts under the federal pricing requirements set for in Section 256b of Title 42 under the United States code. AB 1460 makes no changes to the 340B program, it simply allows covered entities to use the 340B program as intended.
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Chris Rogers was elected to the state Assembly in 2024. As the Assemblymember for the Second Assembly District, he represents Sonoma, Mendocino, Humboldt, Del Norte and Trinity counties. Learn more about Assemblymember Rogers here.
