EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb1056*
HOUSE BILL 1056
J2, J5 4lr2443
CF SB 986
By: Delegates Guzzone, Bagnall, Hill, Kaiser, R. Lewis, White Holland, and Woods
Woods, Alston, Bhandari, Chisholm, Cullison, Hutchinson, S. Johnson,
Kerr, Kipke, Lopez, Martinez, M. Morgan, Pena–Melnyk, Reilly, Rosenberg,
Szeliga, and Taveras
Introduced and read first time: February 7, 2024
Assigned to: Health and Government Operations
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 7, 2024
CHAPTER ______
AN ACT concerning 1
State Board of Pharmacy – Prohibition on Discrimination Against 340B Drug 2
Distribution 3
FOR the purpose of prohibiting a 340B manufacturer, wholesale drug distributor, or 4
third–party logistics provider, or an agent or affiliate of a 340B manufacturer, 5
wholesale drug distributor, or third–party logistics provider, from taking certain 6
direct or indirect actions to limit or restrict the acquisition or delivery of a 340B drug; 7
making a violation of this Act an unfair, abusive, or deceptive trade practice within 8
the meaning of the Consumer Protection Act; requiring the Maryland Prescription 9
Drug Affordability Board to conduct a study of the 340B Program; and generally 10
relating to 340B drugs. 11
BY repealing and reenacting, with amendments, 12
Article – Commercial Law 13
Section 13–301(14)(xl) 14
Annotated Code of Maryland 15
(2013 Replacement Volume and 2023 Supplement) 16
BY repealing and reenacting, without amendments, 17
Article – Commercial Law 18
Section 13–301(14)(xli) 19
Annotated Code of Maryland 20 2 HOUSE BILL 1056
(2013 Replacement Volume and 2023 Supplement) 1
BY adding to 2
Article – Commercial Law 3
Section 13–301(14)(xlii) 4
Annotated Code of Maryland 5
(2013 Replacement Volume and 2023 Supplement) 6
BY repealing and reenacting, without amendments, 7
Article – Health Occupations 8
Section 12–101(a) and (d) 9
Annotated Code of Maryland 10
(2021 Replacement Volume and 2023 Supplement) 11
BY adding to 12
Article – Health Occupations 13
Section 12–6C–09.1 14
Annotated Code of Maryland 15
(2021 Replacement Volume and 2023 Supplement) 16
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18
Article – Commercial Law 19
13–301. 20
Unfair, abusive, or deceptive trade practices include any: 21
(14) Violation of a provision of: 22
(xl) Title 14, Subtitle 13 of the Public Safety Article; [or] 23
(xli) Title 14, Subtitle 45 of this article; or 24
(XLII) SECTION 12–6C–09.1 OF THE HEALTH OCCUPATIONS 25
ARTICLE; OR 26
Article – Health Occupations 27
12–101. 28
(a) In this title the following words have the meanings indicated. 29
(d) “Board” means the State Board of Pharmacy. 30
12–6C–09.1. 31 HOUSE BILL 1056 3
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE ME ANINGS 1
INDICATED. 2
(2) “COVERED ENTITY ” HAS THE MEANING STAT ED IN 42 U.S.C. § 3
256B(A)(4). 4
(3) “PACKAGE” HAS THE MEANING STAT ED IN 21 U.S.C. § 5
360EEE(11). 6
(4) (I) “340B DRUG” MEANS A DRUG THAT : 7
1. IS A COVERED OUTPATIE NT DRUG UNDER 42 U.S.C. § 8
256B; 9
2. HAS BEEN SUBJECT TO A N OFFER FOR REDUCED 10
PRICES BY A 340B MANUFACTURER UNDER 42 U.S.C. § 256B(A)(1); AND 11
3. IS PURCHASED BY A COV ERED ENTITY. 12
(II) “340B DRUG” INCLUDES A DRUG THAT WOULD HAVE BEEN 13
PURCHASED BUT FOR THE LIMITATION U NDER SUBSECTION (D) (C) OF THIS 14
SECTION. 15
(5) “340B MANUFACTURER ” MEANS A MANUFACTURER , AS DEFINED 16
IN 42 U.S.C. § 1396R–8(K)(5), OF COVERED OUTPATIEN T DRUGS THAT HAS SIG NED 17
A PHARMACEUTICAL PRI CING AGREEMENT UNDER 42 U.S.C. § 256B(A)(1). 18
(B) THIS SECTION APPLIES TO: 19
(1) A 340B MANUFACTURER ; 20
(2) A WHOLESALE DRUG DISTR IBUTOR; 21
(3) A THIRD–PARTY LOGISTICS PROV IDER; AND 22
(4) AN AGENT OR AFFILIATE OF A 340B MANUFACTURER , 23
WHOLESALE DRUG DISTR IBUTOR, OR THIRD–PARTY LOGISTICS PROV IDER. 24
(C) THIS SECTION MAY NOT BE CONSTRUED TO BE : 25
(1) LESS RESTRICTIVE THAN ANY FEDERAL LAW THAT IS APPLICABLE 26
TO A PERSON REGULATE D BY THIS SECTION; OR 27
4 HOUSE BILL 1056
(2) IN CONFLICT WITH APPL ICABLE FEDERAL AND STATE LAWS AND 1
REGULATIONS . 2
(D) (C) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS 3
SUBSECTION, AN ENTITY SUBJECT TO THIS SECTION A 340B MANUFACTURER MAY 4
NOT DIRECTLY OR INDI RECTLY DENY , RESTRICT, PROHIBIT, DISCRIMINATE 5
AGAINST, OR OTHERWISE LIMIT T HE ACQUISITION OF A 340B DRUG BY, OR 6
DELIVERY OF A 340B DRUG TO, A PHARMACY THAT IS U NDER CONTRACT WITH O R 7
OTHERWISE AUTHORIZED BY A COVE RED ENTITY TO RECEIV E 340B DRUGS ON 8
BEHALF OF THE COVERE D ENTITY UNLESS THE RECEIPT OF 340B DRUGS IS 9
PROHIBITED BY THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES. 10
(2) AN ENTITY SUBJECT TO THIS SECTION A 340B MANUFACTURER 11
MAY LIMIT THE DISTRIBUTION OF A 340B DRUG IF THE LIMITATI ON IS REQUIRED 12
UNDER 21 U.S.C. § 355–1. 13
(E) (D) (1) (I) A VIOLATION OF SUBSECT ION (D) (C) OF THIS 14
SECTION: 15
(I) 1. SUBJECT TO PARAGRAPH (2) OF THIS SUBSECTION , IS 16
AN UNFAIR, ABUSIVE, OR DECEPTIVE TRADE PRACTICE WITHIN THE MEANING OF 17
TITLE 13 OF THE COMMERCIAL LAW ARTICLE AND IS SUBJEC T TO THE 18
ENFORCEMENT AND PENA LTY PROVISIONS CONTA INED IN TITLE 13 OF THE 19
COMMERCIAL LAW ARTICLE; AND 20
(II) 2. A. SHALL IF THE ALLEGED VIOLAT ION WAS 21
COMMITTED BY A PERSO N THAT IS LICENSED OR PERMITTED BY THE BOARD, SHALL 22
BE JOINTLY OR SEPARATEL Y INVESTIGATED BY THE BOARD OR THE CONSUMER 23
PROTECTION DIVISION OF THE OFFICE OF THE ATTORNEY GENERAL; OR 24
B. IF THE ALLEGED VIOLAT ION WAS COMMITTED BY A 25
PERSON THAT IS NOT LICENSED OR PERMITTE D BY THE BOARD, SHALL BE 26
INVESTIGATED BY THE CONSUMER PROTECTION DIVISION OF THE OFFICE OF THE 27
ATTORNEY GENERAL. 28
(II) AS PART OF AN INVESTI GATION CONDUCTED UND ER 29
SUBPARAGRAPH (1)(I)2 OF THIS PARAGRAPH , THE BOARD OR THE CONSUMER 30
PROTECTION DIVISION OF THE OFFICE OF THE ATTORNEY GENERAL MAY 31
INVESTIGATE AN AFFIL IATE OR A CONTRACTOR OF THE 340B MANUFACTURER , 32
INCLUDING A WHOLESAL ER OR THIRD–PARTY LOGISTICS PROV IDER. 33
(2) (I) IN ADDITION TO THE PE NALTIES UNDER TITLE 13 OF THE 34
COMMERCIAL LAW ARTICLE, A CIVIL FINE MAY BE ASSESSED IN THE AMOU NT OF 35
$50,000 $5,000 PER VIOLATION OF SUB SECTION (D) (C) OF THIS SECTION. 36 HOUSE BILL 1056 5
(II) A VIOLATION OF THIS SE CTION DOES NOT CREAT E A 1
PRIVATE RIGHT OF ACT ION UNDER § 13–408 OF THE COMMERCIAL LAW ARTICLE. 2
(3) IF A VIOLATION OF SUB SECTION (D) (C) OF THIS SECTION IS 3
COMMITTED BY A PERSO N LICENSED OR PERMIT TED BY THE BOARD, THE BOARD 4
MAY IMPOSE DISCIPLIN E, SUSPENSION, OR REVOCATION OF THE PERSON’S LICENSE 5
OR PERMIT. 6
(4) EACH PACKAGE OF 340B DRUGS SUBJECT TO A VIOLATION OF 7
SUBSECTION (D) (C) OF THIS SECTION SHAL L CONSTITUTE A SEPAR ATE VIOLATION. 8
SECTION 2. AND BE IT FURTHER ENACTED, That: 9
(a) The Maryland Prescription Drug Affordability Board, in consultation with the 10
Maryland Department of Health: 11
(1) shall conduct a study on: 12
(i) the current implementation and scope of the 340B Program in 13
the State; 14
(ii) the implementation and impact of the implementation of Section 15
1 of this Act; and 16
(iii) the finances of the Program in the State, including how covered 17
entities reinvest savings realized from the Program; and 18
(2) may require covered entities and 340B manufacturers to report 19
information as necessary to complete the study. 20
(b) On or before July 1, 2026, the Maryland Prescription Drug Affordability Board 21
shall report its findings and recommendations from the study to the Senate Finance 22
Committee and the House Health and Government Operations Committee, in accordance 23
with § 2–1257 of the State Government Article. 24
SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 25
July 1, 2024. 26