Committee hears comprehensive 340B reporting proposal; strips added language and sends SB2387 forward as amended

Representative John Nelson, R.-District 14, told a legislative committee that the state should require detailed reporting from all parties involved in the federal 340B drug-pricing program to better understand how program savings are used.

Nelson presented a multi-page draft that would require hospitals to report how 340B savings are used for charity care, prescription assistance, workforce development, uncompensated care and other community benefits; ask drug manufacturers to disclose aggregate rebates, discounts, transaction-level data and trial results; require pharmacy benefit managers (PBMs) to disclose aggregated payments to affiliated and nonaffiliated pharmacies and 340B savings by channel; and require health insurers to report premium dollars, claims paid, rebates received and how any 340B-related revenue is used to lower premiums or out-of-pocket costs.

"We're not afraid of reporting," Nelson said, arguing that better data would help policymakers determine whether the program affects premiums or access to care. He told the committee that the Department of Corrections uses 340B savings in its re-entry work and estimated that practice currently amounts to roughly $700,000 a year in savings for that agency.

Committee members voiced a mix of support and procedural concern. Representative Hendricks said several neighboring states have hospital reporting and that including PBMs and insurers would provide a fuller picture. Representative Dobrevitch thanked Nelson for assembling a comprehensive draft and said the reporting would help identify where the state can intervene. Representative Anderson and others said the package was large and that affected parties should have time to testify and review the language.

Dylan Wheeler of Sanford Health Plan told the committee he needed more time to evaluate carrier impacts, particularly in light of a separate ERISA-related bill. Tim Blasil, president of the North Dakota Hospital Association, said hospitals support transparency and that a comprehensive approach including PBMs and insurers would be useful.

Because the draft language had been circulated informally and was not yet in an LC amendment format, the committee agreed to form a subcommittee (Representative Hendricks to lead, with Representatives Dobrevitch and Anderson participating) to refine the draft and ask Legislative Council (LC) to prepare an amendment for review. The committee planned to reconvene on Monday to review the LC draft and invited affected parties to review the forthcoming language.

Separately, during floor handling of Senate Bill 2387, the committee voted to remove the newly added language on page 1 (reverting several green-line additions and restoring prior text) by motion of Representative Freilich, seconded by Representative Balinski. The committee then voted to pass Senate Bill 2387 as amended. The clerk recorded a final tally of 12-0-1 on the passage vote.

The committee left open the question of penalties for noncompliance and the enforceability of reporting requirements for manufacturers and PBMs. Members agreed that reporting first, then study, would provide the data needed to evaluate how to craft compliance mechanisms in a future session.

Votes at a glance

- Motion to amend SB2387 (strike new language on page 1 and revert changes): moved by Representative Freilich; second by Representative Balinski; outcome: amendment approved (voice vote; documented as carried in committee).

- Motion to pass Senate Bill 2387 as amended: moved by Representative Freilich; second by Representative Balinski; outcome: approved; recorded roll-call tally 12 yes, 0 no, 1 absent.

Nelson said most hospitals he has spoken with are willing to report and that collecting the data will help the legislature "learn more about how important this 340B program is" for hospitals, community health centers and other providers. The subcommittee and LC drafting will determine whether and how the comprehensive reporting elements Nelson proposed become statutory requirements.