HB562 would add a new section to Hawaii’s consumer protection law to protect the state’s participation in the federal 340B drug discount program. The bill is aimed at ensuring that 340B covered entities such as nonprofit hospitals, rural hospitals, community health centers, Native Hawaiian health centers, and Ryan White program participants can continue to use contract pharmacies to dispense discounted outpatient drugs to eligible patients. It also addresses contract terms tied to the maximum allowable cost (MAC) payment model for generic drugs.
Under the bill, beginning June 30, 2025, a 340B covered entity in Hawaii could not enter into a contract with a drug manufacturer, wholesale distributor, or related affiliate if the contract directly or indirectly restricts or prohibits acquisition of a 340B drug through a contract pharmacy, unless federal law or the U.S. Department of Health and Human Services prohibits that arrangement. The bill also voids certain contract provisions based on the MAC payment model for drugs sold under that model if the model was already in effect on or before that date. The attorney general would be authorized to bring civil actions to enforce the new law.
Impact
HB562 would create new state-level restrictions on drug manufacturer and distributor contracts affecting 340B entities, effectively overriding contract provisions that limit contract pharmacy access in Hawaii and invalidating certain MAC-based contract terms. It would amend chapter 481B of the Hawaii Revised Statutes and give the attorney general enforcement authority, adding a civil remedy for violations. The bill is designed to preserve access to discounted medications and protect the financial stability of safety-net providers that rely on 340B savings.
Sentiment
The bill’s stated purpose and framing are strongly supportive of the 340B program and of expanded patient access to medications, especially in rural and geographically isolated parts of Hawaii. The available context shows no recorded committee testimony or votes, but the bill’s findings and description indicate a pro-consumer, pro-provider sentiment centered on preserving access to care and preventing manufacturer restrictions. The measure appears to be presented as a response to perceived unfair practices by drug manufacturers.
Contention
The main point of contention is likely to be the bill’s restriction on private contract terms between 340B entities and drug manufacturers or wholesalers, particularly provisions limiting contract pharmacy use. Drug manufacturers and distributors may view the bill as interfering with their pricing and distribution arrangements, while covered entities and patient advocates would support it as necessary to maintain access and savings. A second likely area of dispute is the voiding of MAC-based contract provisions, which could affect reimbursement arrangements for generic drugs and pharmacy economics.