SACRAMENTO, CA – Assembly Bill 1460, authored by Assemblymember Chris Rogers, passed the Assembly on Monday and is now headed to the Senate. The bill protects access to the federal 340B discount drug program for clinics and health centers. During the pandemic, pharmaceutical manufacturers started restricting access to the program by placing arbitrary limitations on the pharmacies that can be used to dispense 340B medications. AB 1460 prohibits manufacturers from using these discriminatory practices to ensure fair access to this important federal program for clinics and health centers.
“AB 1460 ensures that clinics and health centers can utilize this critical discount prescription drug program to support important services,” said Assemblymember Chris Rogers. “Congress is considering cutting health care for millions of Californians and our state is facing a significant budget deficit—now is not the time to turn our backs on the safety net providers who offer care to our most vulnerable populations.”
AB 1460 helps community health centers and clinics address health equity and access to care issues in California by protecting their ability to utilize contract pharmacies to dispense 340B medications. In mid-2020, pharmaceutical manufacturers started rolling out contract pharmacy restrictions which limited access to the 340B program. These restrictions often limit entire clinic systems to one contract pharmacy location or one in-house pharmacy, require data sharing, and restrict which drugs qualify for 340B pricing at those pharmacies. This places a significant handicap on accessing the benefits of this important federal program, especially in rural areas where clinic systems can be spread out over hundreds of miles. These discriminatory practices also make it harder for covered entities to leverage contract pharmacies for discounts on medications for their patients.
“AB 1460 recognizes the critical relationship between community health centers and their contract pharmacy partners to ensure access to affordable prescription drugs and vital healthcare services to California’s most vulnerable communities,” said Leslie Abasta, Executive Director of the California Partnership for Health. “This bill takes a significant step forward in protecting and promoting health equity for underserved regions throughout the state.”
The 340B program was founded in 1992 to help providers that serve vulnerable and uninsured patients secure affordable prescription drugs. These nonprofit hospitals and clinics are known as covered entities (CEs). In order to participate in the Medicaid program, pharmaceutical manufacturers must enter into a second agreement with the Secretary of HHS to provide discount medications to covered entities through the 340B program.
Under the 340B program, covered entities are allowed to dispense discounted medications to uninsured and insured patients. Discount medications can be provided at cost to uninsured patients, making lifesaving medications more affordable for them. If the CE dispenses discount medication to an insured patient, the patient’s insurance reimburses the CE for the full price of the medication and the CE retains the difference between the reduced price it pays for the drug and the full amount for which it is reimbursed. These pass-through savings are used to fund important services that wouldn’t otherwise be covered by insurance or government funds, such as transportation services, additional staff training, medical equipment, and longer hours of operation.
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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.
