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Rep. Lislegard bill prohibiting 340B drug payment discrimination, strengthening critical care facilities receives committee hearing

Friday, March 22, 2024

SAINT PAUL, Minn. – Today, the House Commerce Committee held a public hearing on legislation authored by Rep. Dave Lislegard (DFL – Aurora) to prohibit discriminatory practices that harm hospitals and other health care providers participating in the federal 340B Drug Pricing Program as a result of providing drugs discounted by the program.

“The 340B program was established to extend a lifeline for health care to our most vulnerable communities, not to pad the pockets of Big Pharma. But despite the spirit of the law, drugmakers continue to deny discounts to our vital safety-net institutions,” Rep. Lislegard said. “This issue comes down to a simple question: should 340B savings go to local hospitals operating on razor-thin margins on the verge of closing – mostly in Greater Minnesota – that provide care to people 24/7, or drug manufacturers that are making billions of dollars in record profits? For me and the folks in northern Minnesota I represent, it’s not a difficult answer, and I’ll stand with my rural hospitals and the people they serve every single day.”

The 340B Drug Program – enacted by Congress in 1992 – ensures safety-net providers have access to discounted drugs and a way to offer more comprehensive health care services to the most vulnerable patients and communities. The program empowers health care providers to stretch scarce federal resources as far as possible to ensure underserved communities have access to emergency room care, intensive care, mental and behavioral health services. 

In order to sell their drugs to the Medicaid and Medicare program, drug companies are required to participate in the 340B Program and sell covered drugs to certain hospitals and other health care providers. However, in 2020, drug manufacturers began denying 340B discounts to entities if they partnered with community pharmacies, including local independent pharmacies, Thrifty White, and Walgreens. There are currently more than 30 drug companies illegally denying 304B pricing. In 2021, manufacturer restrictions topped $8 billion. Instead of going to support critical safety net institutions, this money went to drugmakers’ bottom lines.

Bipartisan legislation has been introduced in the United States Congress to prohibit contract pharmacy price discrimination – known as the Sustain 340B bill – but given the relative unlikelihood of timely congressional action, state legislatures are pursuing action against abusive pricing practices. Last week, the 8th Circuit Court of Appeals, which has jurisdiction over Minnesota, upheld a similar Arkansas law.

The committee laid the bill over for future consideration. Video of the hearing will be available on House Public Information Services’ YouTube page.

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