Senate committee advances bill requiring state reporting on 340B drug discounts

Senate Commerce and Human Resources on Thursday voted to send House Bill 136 to the Senate floor with a due-pass recommendation after testimony about transparency and program oversight in the federal 340B drug-pricing program.

Sponsor Sen. Carl Bjerke, R.-District 5, told the committee the bill would require 340B covered entities to report acquisition costs, payments received and how savings are used to the Idaho attorney general, the state controller and the director of the Department of Health and Welfare. "This bill enhances transparency and accountability in this program," Bjerke said, adding that the data would not be publicly released but would allow state officials to evaluate whether federally discounted drug savings are being used for charity care or retained as revenue.

Supporters said state review is necessary because federal oversight by the Health Resources and Services Administration (HRSA) has not produced the data some lawmakers expect. Steve Thomas of the Health Plan Association testified that reports under the bill "are confidential" and available only to the AG, the controller and the director of health and welfare; he argued the state could aggregate the data at modest cost and that "transparency never hurts." Thomas cited prescription drugs as roughly 22% of total health-care spending.

Opponents and stakeholders raised technical and operational concerns. Pam Eaton, president and CEO of the Idaho State Pharmacy Association and Idaho Retailers Association, told the committee the bill's language could be read to include contract pharmacies and that pharmacies often do not receive the needed data in a timely way to file the reports requested by the bill. "If you look at lines 13 and 14 on page 1, it says, and includes any pharmacy under contract with the entity to dispense drugs on behalf of the entity," Eaton warned, saying that reporting by pharmacies could duplicate or incompletely mirror the hospital-level reports.

Toni Lawson, vice president of the Idaho Hospital Association, said 340B covered entities already face multiple program-integrity requirements, audits and recertifications and that the bill contains technical problems that would make compliance difficult as written. "There are a number of technical problems with the bill that need fixed," Lawson said, and asked that the measure be sent to the amending order so interested parties can work with the sponsor.

Bjerke and other witnesses cited national reports that found hospitals sometimes charge high markups on drugs purchased at steep 340B discounts; the sponsor referenced a North Carolina state treasury report that compared hospital markups for outpatient oncology drugs and concluded some hospitals charged many times their acquisition cost. Bjerke said the bill is intended to let state officials see acquisition cost versus payment and how 340B savings are used (examples listed by the sponsor included charity care and community benefit).

Committee members expressed mixed views but ultimately approved a motion to send the bill to the floor with a due-pass recommendation. Several senators said they supported the idea of transparency but reserved their right to change their vote on the floor once they had more time to review technical details and potential impacts on pharmacies.

Votes at the committee level: a motion to send House Bill 136 to the Senate floor with a due-pass recommendation was approved; the transcript does not contain a roll-call tally in the committee record provided.