California is poised to pass a ballot measure aimed at imposing 340B spending restrictions for certain healthcare entities participating in the 340B Program who have historically engaged in spending that is not directly related to patient care and have also owned or operated multifamily dwellings with significant safety issues. Proposition 34 targets a limited, specific subset of 340B providers who: During any 10 calendar-year period of its existence, spent more than $100M for purposes other than direct patient care; and The entity (or its parent or any of its subsidiaries or affiliates) currently is, or has ever been, an owner or operator of one or more multifamily dwellings that have cumulatively received at least 500 “high severity” violations in notices or inspection reports by enforcement agencies; and Meet at least one of the following criteria: The entity has, or has ever had, a California license to operate as a health plan, pharmacy, or clinic; The entity has, or has ever, contracted with Medi-Cal as a primary care case management organization; or The entity has, or has ever, contracted with CMS as a Medicare Advantage Special Needs Plan. Entities that meet the above requirements are identified as “prescription drug price manipulators.
” A prescription drug price manipulator would be required to submit annual reports to the State to demonstrate that in the prior calendar year it: 1) spent at least 98% of 340B net revenues on direct patient care; and 2) it did .