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AN ACT relating to the 340B Drug Pricing Program. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
SECTION 1. A NEW SECTION OF KRS CHAPTER 216 IS CREATED TO 3
READ AS FOLLOWS: 4
(1) As used in this Section: 5
(a) "340B drug" means a covered outpatient drug, as defined in 42 U.S.C. sec. 6
1396r-8(k)(2), that has been subject to any offer for reduced prices by a 7
pharmaceutical manufacturer pursuant to 42 U.S.C. sec. 256b(a)(1), and is 8
purchased by a nonprofit hospital; 9
(b) "340B Drug Pricing Program" means the federal prescription drug pricing 10
program established in accordance with 42 U.S.C. sec. 256b; 11
(c) "340B profit" means the difference between: 12
1. The aggregate payments received from insurers, third-party payors, 13
and self-paying patients for all 340B drugs; and 14
2. The aggregate acquisition cost paid for all 340B drugs; 15
(d) "Charity care" means free or discounted health care items and services 16
provided to an individual who meets the hospital's financial assistance 17
criteria and is unable to pay for the items or services, or both, rendered, as 18
reported on line 23 of Worksheet S-10 to the Medicare cost report or any 19
successor form; 20
(e) "Charity care costs" means the total cost for charity care incurred by a 21
nonprofit hospital, including any offsite outpatient facility associated with 22
the hospital that dispenses 340B drugs purchased by the hospital; 23
(f) "Contract pharmacy" means a pharmacy with which a nonprofit hospital 24
has contracted to dispense 340B drugs on behalf of the nonprofit hospital to 25
patients of the nonprofit hospital, whether distributed in person, by mail, or 26
any other means of dispensing; 27 UNOFFICIAL COPY 25 RS BR 1525
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(g) "Low-income patient" means a patient with a family income below two 1
hundred percent (200%) of the federal poverty level; and 2
(h) "Nonprofit hospital" means a private nonprofit corporation or hospital 3
that: 4
1. Is licensed by the Cabinet for Health and Family Services as a 5
hospital; and 6
2. Meets the definition of covered entity in 42 U.S.C. sec. 256b(a)(4)(L), 7
(M), (N), or (O). 8
(2) By July 1, 2026, and each year thereafter, each nonprofit hospital shall report the 9
following information to the Cabinet for Health and Family Services, with 10
respect to the nonprofit hospital and separately for each offsite facility associated 11
with the nonprofit hospital, for the previous calendar year in a form and manner 12
prescribed by the cabinet: 13
(a) Delineated by form of insurance or third-party payor type, including but not 14
limited to Medicare, Medicaid, private insurance, self-pay, and uninsured: 15
1. The aggregate acquisition cost for all 340B drugs dispensed by the 16
nonprofit hospital, an associated facility, or contract pharmacy; 17
2. The aggregate payments received from insurers or third-party payors 18
for all 340B drugs dispensed by the nonprofit hospital, an associated 19
facility, or contract pharmacy; 20
3. The total number of prescriptions and the percentage of the nonprofit 21
hospital's prescriptions that were dispensed or administered with 340B 22
drugs; 23
4. The percentage of patients served on the basis of a sliding fee scale for 24
dispensed or administered 340B drugs at the point of sale; 25
(b) The total operating cost of the nonprofit hospital, including an itemized cost 26
report for the following: 27 UNOFFICIAL COPY 25 RS BR 1525
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1. Implementing direct pass through of 340B profits to patients in the 1
form of lower cost sharing for dispensed or administered 340B drugs 2
at the point of sale; 3
2. Implementing a sliding fee scale for dispensed or administered 340B 4
drugs at the point of sale for low-income patients; and 5
3. Charity care costs; 6
(c) Total payments made to: 7
1. Contract pharmacies for 340B Drug Pricing Program-related services 8
and other functions; 9
2. Third-party administrators for managing any aspect of the nonprofit 10
hospital's 340B Drug Pricing Program; and 11
3. Any other party or entity in connection with 340B Drug Pricing 12
Program-related compliance, legal services, education, or 13
administrative costs; 14
(d) Information regarding contract pharmacies, including: 15
1. The total number of contract pharmacies; 16
2. The number of contract pharmacies located outside the 17
Commonwealth of Kentucky and the states in which those pharmacies 18
are located; 19
3. The total number of prescriptions written by the hospital or its staff 20
that were filled at a contract pharmacy and the percentage of all 21
prescriptions written by the hospital or its staff that were filled by 22
contract pharmacies, delineated by in-state and out-of-state contract 23
pharmacies; 24
4. The total remuneration paid to or retained by contract pharmacies or 25
their affiliates for any 340B Drug Pricing Program-related services 26
performed on behalf of the nonprofit hospital; and 27 UNOFFICIAL COPY 25 RS BR 1525
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5. The percentage change in total remuneration reported under 1
subparagraph 4. of this paragraph as compared to the previous 2
calendar year; and 3
(e) A detailed and itemized accounting of expenditures associated with 340B 4
profits, including an itemized report of all programs, services, equipment 5
purchases, staffing, and any other expenditures financed, in part or in 6
whole, by 340B profits. 7
(3) An officer of the nonprofit hospital shall certify that the report submitted 8
pursuant to this section is complete and accurate. 9
(4) The Cabinet for Health and Family Services shall post all reports submitted 10
pursuant to this section to its website. 11
Section 2. (1) The Personnel Cabinet is hereby directed to study the impact 12
of nonprofit hospital purchases, contract pharmacy arrangements, and general practices 13
related to dispensing and administering 340B drugs on the Kentucky Employee Health 14
Plan. The study shall include but not be limited to an analysis of foregone rebates, the 15
effect on plan premiums, and the impact of the 340B Drug Pricing Program on state 16
employee's out-of-pocket healthcare expenses. The Personnel Cabinet shall submit a 17
report containing the findings of the study required under this section to the Legislative 18
Research Commission for referral to the Interim Joint Committee on Health Services and 19
the Interim Joint Committee on State Government no later than December 1, 2025. 20
(2) As used in this section: 21
(a) "340B drugs" has the same meaning as in Section 1 of this Act; 22
(b) "Contract pharmacy" has the same meaning as in Section 1 of this Act; and 23
(c) "Nonprofit hospital" has the same meaning as in Section 1 of this Act. 24
Section 3. (1) The Cabinet for Health and Family Services shall submit a 25
report on the 340B Drug Pricing Program established in accordance with 42 U.S.C. sec. 26
256b to the Legislative Research Commission for referral to the Interim Joint Committee 27 UNOFFICIAL COPY 25 RS BR 1525
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on Appropriations and Revenue and the Interim Joint Committee on Health Services no 1
later than December 1, 2025. The report shall include the following for total aggregated 2
Medicaid cover outpatient drug units dispensed or administered in the state during the 3
prior calendar year separately for the Department for Medicaid Services fee for service 4
population and for each managed care organization with whom the department has 5
contracted for the delivery of Medicaid services: 6
(a) The number of dispensed or administered covered outpatient drug units; 7
(b) The number of dispensed or administered covered outpatient drug units that 8
were subject to a rebate under 42 U.S.C. sec. 1396r-8; 9
(c) The number of dispensed or administered covered outpatient drug units where 10
340B pricing was obtained by the nonprofit hospital, and the number of units billed by 11
contract pharmacies; and 12
(d) A reasonable estimate of net costs or savings to the Medicaid program due to 13
nonprofit hospital purchases of covered outpatient drug units at 340B pricing. 14
(2) To the extent that the Cabinet for Health and Family Services lacks 15
information to provide a data element required under subsection (1)(d) of this section, it 16
shall provide a reasonable estimate based on all available information and an explanation 17
of the information that it lacks. 18
(3) As used in this section: 19
(a) "Contract pharmacy" has the same meaning as in Section 1 of this Act; 20
(b) "Covered outpatient drug" has the same meaning as in 42 U.S.C. sec. 1396r-21
8(k)(2); and 22
(c) "Nonprofit hospital" has the same meaning as in Section 1 of this Act. 23