Committee backs bill to bar drugmakers from blocking 340B discounts to contracted pharmacies

The House Committee on Judiciary & Hawaiian Affairs on Feb. 25 voted to advance House Bill 712 (HD1), a measure that would prohibit drug manufacturers from denying, restricting or prohibiting the shipment or delivery of 340B-priced drugs to pharmacies contracted with covered entities under the federal 340B Drug Pricing Program.

Supporters told the committee that current manufacturer practices have cost Hawaii safety-net providers millions. "This bill ... is designed to prevent what we believe are unfair drug manufacturer practices that limit safety net providers access to 340B drug discounts," Hilton Raythell testified, adding the impact is "around $30,000,000 a year for Hawaii hospitals and additional financial impact on our FQHCs." JC Mike of The Queen’s Health System said the measure would "help bring that in alignment with what the congress wants, primarily to help those hospital systems and other health systems that help the neediest in our community."

The Office of Consumer Protection and the state Attorney General offered technical input. "OCP appreciates the purpose of this bill," Melissa Enright said, noting OCP's concern about placement of the language and proposing a standalone chapter. Deputy Attorney General Margaret Leong said the AG's office proposed clarifying language, including who would enforce the provision.

Pharmaceutical manufacturers opposed the bill in principle. William Goo, representing Pharma (Pharmaceutical Research and Manufacturers of America), said industry objections center on accountability around contract pharmacies: "There is a lack of transparency and accountability as to exactly all the patients that are receiving benefits from this particular ... contract pharmacies," he told the committee, urging changes to address those concerns.

Hospital witnesses described how 340B savings are used to subsidize care. Mike Robinson of Hawaii Pacific Health said the program funds community benefits and cited $78 million in 2022 community benefit reporting, with roughly $34 million from 340B savings at HPH. "If we don't have access to that type of savings ... our safety net ability to cover those individuals and provide care goes away," Robinson said.

The committee adopted an amendment to incorporate proposed AG language and remove redundant statutory language, then voted to advance the bill with those changes.

Votes at a glance: committee members present voted to advance HB 712 (HD1) with the attorney general's proposed draft and technical edits. The committee record lists seven ayes and four members recorded as excused.