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Senate committee advances HB712 with transparency reporting for 340B revenues; pharma seeks amendments
Summary
The committee passed HB712 with amendments that add transparency and reporting requirements for 340B program revenues used by safety-net providers. Testimony split between hospitals and pharmaceutical industry representatives; committee opted for reporting requirements rather than a full audit mandate.
The Senate Committee on Health and Human Services voted March 19 to advance House Bill 712 with amendments that increase transparency around 340B drug-discount revenues used by safety‑net providers.
Why it matters: The 340B Drug Pricing Program enables eligible health providers to buy outpatient drugs at discounted prices; revenues from those discounts often support services for low‑income patients. Hospitals, Federally Qualified Health Centers (FQHCs) and native Hawaiian health centers told the committee those revenues fund transportation, chronic‑disease programs and specialty services. Pharmaceutical industry groups urged caution and asked for additional transparency and claim-level data before statutory changes.
Brian Warren of the Biotechnology Innovation Organization testified in opposition in part and asked for transparency provisions; William Gu of Pharma (a trade association for pharmaceutical companies) described proposed amendments aimed at claims-level transparency and said the industry opposed a blanket requirement for contract-pharmacy dispensing without safeguards.
Several safety‑net providers — including Queen’s Health Systems, Hawaii Pacific Health and Waianae Coast Comprehensive Health Center — testified in support, saying 340B revenues are crucial to sustaining services and that recent manufacturer restrictions have reduced those funds. Waianae Coast outlined how 340B savings are used for chronic‑disease management, transportation and community outreach.
Committee members debated whether to require audits or to add reporting and transparency requirements. Industry asked for opportunity to test data access proposals; hospital representatives emphasized urgency because they are already experiencing reduced 340B revenues. The committee accepted amendments that add reporting/transparency provisions (as reflected in stakeholder submissions) and directed technical fixes. One committee member described the change as “requiring reporting” rather than an audit.
The committee recommended passage as amended with a defective effective date (12/31/2050 for some provisions) and language to require reporting that would allow the legislature to examine whether improper use or expansion of contract pharmacies is occurring in Hawaii. Committee members noted similar bills and litigation in other states and the national policy context.
What’s next: The committee advanced the bill with the transparency amendments and technical edits; the committee report will include the adopted amendment language and any follow-up reporting schedule required of hospitals and program administrators.
