SENATE BILL 1414
By Briggs
HOUSE BILL 1242
By Helton-Haynes
HB1242
002710
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AN ACT to amend Tennessee Code Annotated, Title 47,
Chapter 18 and Title 56, relative to 340B entities.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Section 56-7-3119, is amended by deleting
subsection (d) and substituting:
(d) A drug manufacturer or their agent or affiliate, shall not, either directly or
indirectly:
(1) Deny, restrict, prohibit, discriminate against, or otherwise limit the
acquisition of a 340B drug by, or delivery of a 340B drug to, a 340B entity or
other location that is under contract with, or otherwise authorized by, a 340B
entity to receive 340B drugs on behalf of the 340B entity unless such receipt is
prohibited by the United States Department of health and human services or
applicable state law;
(2) Impose additional requirements or limitations on a 340B entity,
including requiring the submission of any health information, claims or utilization
data, purchasing data, payment data, or other data as a condition for allowing the
acquisition of a 340B drug by, or delivery of a 340B drug to, a 340B entity or
other location that is under contract with or otherwise authorized by a 340B entity
to receive 340B drugs on behalf of the 340B entity unless such data submission
is explicitly required by the United States department of health and human
services or applicable state law;
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(3) Require a 340B entity to reverse, resubmit, or clarify a claim after the
initial adjudication unless these actions are in the normal course of business and
not related to the 340B program;
(4) Impose any requirements relating to the number of 340B entities or
their contract pharmacies or inventory management systems of 340B drugs,
unless such requirement is required by the United States department of health
and human services or applicable state law;
(5) Impose any requirement relating to the frequency, duration, or scope
of audits that are not imposed on pharmacies or providers that are not 340B
entities;
(6) Impose requirements relating to accreditation, recertification,
credentialing, or recredentialing that are not imposed on pharmacies or providers
that are not 340B entities; or
(7) Impose any requirement determined by the commissioner to interfere
with the ability of a 340B entity to access discounts provided under the 340B
program.
(e) A person or entity that contracts with a 340B entity to dispense 340B drugs
or to administer, or otherwise to consult for the purposes of facilitating, a 340B entity's
participation in the 340B program shall:
(1) Not interfere with, prohibit, restrict, or limit a 340B entity's contracts or
prospective business relationships with another person or entity;
(2) Not deny, restrict, prohibit, or otherwise interfere with a 340B entity's
choice of 340B drugs acquired, delivered, or otherwise distributed under
subsection (b); or
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(3) Exclude claims from 340B entities which would result in a net loss to
the covered entity.
(f)
(1) A violation of subsection (d) constitutes a violation of § 56-8-104;
provided, that a civil penalty may be assessed in the amount of fifty thousand
dollars ($50,000) per violation.
(2) A violation of subsection (d) constitutes a violation of § 47-18-104;
provided, that a civil penalty may be assessed in the amount of fifty thousand
dollars ($50,000) per violation.
(3) Each package of 340B drugs applicable to a violation of subsection
(d) constitutes a separate violation.
(4) A violation of subsection (d) may be jointly or separately enforced by
the commissioner or attorney general and reporter.
(g) This section must not be construed or applied to be in conflict with or less
restrictive than:
(1) Applicable federal law and regulations, including limited distribution of
a drug required under 21 U.S.C. § 355-1; or
(2) Another law of this state if the state law is compatible with applicable
federal law.
(h) As used in this section:
(1) "340B drug" means a drug that is a covered outpatient drug within the
meaning of 42 U.S.C. § 256b; is eligible for any offer for reduced prices by a
manufacturer under 42 U.S.C. § 256b(a)(1); and is purchased by a 340B entity or
would have been purchased by a 340B entity but for a restriction or limitation
described in subsection (b);
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(2) "340B entity" means a covered entity participating in the federal 340B
drug discount program, as defined in section 340B of the Public Health Service
Act, 42 U.S.C. § 256b, including the entity's pharmacy or pharmacies, or any
pharmacy or pharmacies under contract with the 340B entity to dispense drugs
on behalf of the 340B entity;
(3) "Claim" means a request from a 340B entity to be reimbursed for the
cost of filling, refilling, or administering a prescription drug or for providing a
medical supply or device;
(4) "Health information" means any information, including demographic
information collected from an individual or a group of individuals, that:
(A) Is created or received by a healthcare provider, pharmacy,
health plan, employer, or healthcare clearinghouse; and
(B) Relates to the past, present, or future physical or mental
health or condition of an individual, the provision of health care to an
individual, or the past, present, or future payment for the provision of
health care to an individual;
(5) "Health insurance issuer" has the same meaning as defined in § 56-
2-125;
(6) "Managed health insurance issuer" has the same meaning as defined
in § 56-32-128;
(7) "National drug code number" means the unique national drug code
number that identifies a specific approved drug, its manufacturer, and its
package presentation; and
(8) "Package" has the same meaning as defined in 21 U.S.C. §
360eee(11)(A).
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SECTION 2. Tennessee Code Annotated, Section 56-8-104, is amended by adding the
following new subdivision:
(24) A violation of § 56-7-3119(d).
SECTION 3. Tennessee Code Annotated, Section 47-18-104(b), is amended by adding
the following new subdivision:
(68) Violating § 56-7-3119(d).
SECTION 4. If any provision of this act or its application to any person or circumstance
is held invalid, then the invalidity does not affect other provisions or applications of the act that
can be given effect without the invalid provision or application, and to that end, the provisions of
this act are severable.
SECTION 5. This act takes effect July 1, 2025, the public welfare requiring it.