Legislators hear wide-ranging views on 340B transparency as ND study begins

BISMARCK, N.D. — The North Dakota Legislative Interim Committee on Health Care spent an entire day Aug. 4 hearing testimony about state reporting on the federal 340B drug-discount program, with hospital and clinic leaders defending the program as critical to rural services and insurers urging more transparency to measure cost impacts.

The committee’s study of 340B reporting was directed by state legislation and is intended to consider which covered entities — hospitals, federally qualified health centers, contract pharmacies and others — should report data to the state, what data to collect and how that information could be used to benefit patients, legal counsel Katie Carpenter told the panel. The memorandum establishing the study references 42 U.S.C. §256b (Section 340B of the Public Health Service Act) and the work ordered by Senate Bill 2370.

Why it matters: 340B allows qualifying safety-net providers to buy outpatient drugs at steeply reduced prices; how those savings are used has become a national policy debate. Supporters say the discounts let rural hospitals and community health centers keep services open and subsidize care for uninsured patients. Critics — including some payers and industry groups — say a lack of state-level reporting leaves employers and insurers unable to see whether 340B profits reduce patient costs or instead flow elsewhere, potentially increasing premiums and out-of-pocket costs.

The hearing brought a wide cross-section of stakeholders, including North Dakota’s insurance commissioner, Medicaid officials, hospital systems, federally qualified health centers, national hospital and industry representatives, pharmacists and insurers.

Overview from state and federal vantage points

John Godfrey, North Dakota insurance commissioner, gave the committee a primer on how 340B works and why states are studying it. He said 340B is intended to “stretch federal dollars” for safety-net providers and that discounts can range from roughly 25% to 50% off list prices, depending on the drug and manufacturer rules. But he and other witnesses noted…