(1) The legislature finds that the federal 340B drug pricing program is essential for providing health care access to low-income and uninsured populations. The 340B drug pricing program requires drug manufacturers to offer discounts on outpatient medications to eligible providers that serve these populations. They include federally qualified health centers, Ryan White (HIV) clinics, tribal and urban Indian health centers, critical access hospitals, and other safety net hospitals that meet stringent federal criteria.
(2) Congress created the 340B drug pricing program in 1992, stating that the program's benefits enable covered "entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." (H.R. Rep. No. 102-384 (II), at 12 (1992)). The 340B drug pricing program allows certain safety net providers to sustain underfunded services and reinvest savings into essential community benefits, such as financial assistance for low-income patients, no-cost wellness visits, screenings, vaccinations, transportation to appointments, health education classes, case management, medication adherence services, and workforce development programs.
(3) The federal health resources and services administration permits 340B covered entities to contract with pharmacies to enable access to life-saving drugs and drugs that preserve quality of life to eligible patients, including for those who otherwise have limited access.
(4) The 340B drug pricing program and contract pharmacies are crucial to Washington's safety net providers by ensuring patients can access their prescribed medications, while providing additional resources to 340B covered entities to serve vulnerable and underserved populations.
(5) More than 20 other states have recognized the importance of contract pharmacies to the 340B drug pricing program and have taken action to prohibit drug manufacturers from imposing restrictions on 340B covered entities' ability to serve patients through contract pharmacies.
(6) Federal courts, including the fifth and eighth circuit courts of appeals, have upheld states' authority to legislate on the distribution of 340B drugs through contract pharmacies.
(7) The current restrictions imposed by drug manufacturers not only limit a patient's access to affordable medication but also jeopardize the financial savings that safety net providers depend on to reinvest in their operations, expand services, and support underserved communities.
(8) The legislature, therefore, finds that prohibiting drug manufacturers from imposing restrictions on 340B covered entities is necessary to ensure the integrity of the 340B program and protect Washington's vulnerable patients, their access to medications, and safety net providers' ability to serve their patients.
(9) The legislature also finds that there is a vested state and public interest in providing transparency across the spectrum of 340B program participants to ensure the program is operating within the original intent set forth by congress.
(10) The legislature, therefore, finds that 340B program reporting capturing covered entities, contract pharmacies, and manufacturers is necessary to ensure the integrity of the program.
(11) To address the costs of such reporting, the legislature finds it necessary to implement a filing fee for the covered entities and manufacturers that are required to report, which as of 2026, includes approximately 110 340B covered entities and 780 manufacturers. The legislature intends for responsibility for payment of filing fees to be based on this differential between covered entities and manufacturers.
