Senate committee hears bill to limit manufacturer demands on 340B clinics; PhRMA opposes

The Senate Health and Public Affairs Committee heard testimony on a committee substitute for House Bill 78 on whether state law should bar some drug makers and contractors from imposing certain data and contract requirements on federally qualified health centers participating in the federal 340B drug discount program.

The bill’s sponsor for the Senate presentation, Senator Samuel Lopez, said the measure is intended to “stretch scarce federal resources as far as possible in order to reach more eligible patients and to provide more comprehensive services.”

The bill’s supporters described the 340B program as vital for rural clinics. “The 340B discount program is very important to these clinics,” said Eva Ramirez Ammerman, chief executive officer of the New Mexico Primary Care Association, which represents community health centers. Ammerman said the association’s clinics operate on thin margins, provide sliding-fee care to uninsured and underinsured patients, and rely on contract pharmacies to serve rural areas.

Opponents included Kyle Piccola, director of state policy for the Pharmaceutical Research and Manufacturers of America (PhRMA), who said the federal 340B program is governed by federal law and that states cannot impose requirements that conflict with the federal statute. “The 340B program is a comprehensive federal program that is governed exclusively by federal law,” Piccola said, adding that manufacturers have concerns about oversight and fraud and that recent litigation (a December 2024 ruling in the U.S. District Court for the Southern District of West Virginia) found state actions that interfered with federal objectives.

Committee members questioned how the bill would affect transparency. Senator Scott asked whether manufacturers should be entitled to claims or utilization data showing whether discounted drugs actually reach low-income or underserved patients. Ammerman and other witnesses said federally qualified health centers (FQHCs) already report to the U.S. Health Resources and Services Administration (HRSA) and that manufacturers have started imposing a patchwork of reporting and contract requirements (for example, portals, limits on the number of contract pharmacies) that clinics view as burdensome.

Ammerman told the committee clinics do provide reporting and that “we literally don't have the staff or the capability to continue on down this road of this burdensome reporting.” The witness said some clinics reported modest dispensing fees (about $5) charged by contract pharmacies but that statewide averages were not available.

Piccola told the committee that New Mexico entities have had “only 18 audits from HRSA over the last decade” and that 14 of those audits returned adverse findings; he cited that record to argue for stronger federal oversight rather than a state law change. Supporters responded that many HRSA audits apply differently across covered-entity types and that FQHCs are more heavily regulated than some other covered entities.

Senators raised concerns on both sides: several members expressed support for protecting rural clinics’ access to discounted drugs, while others said transparency for patients and payers was important and suggested federal action was the proper venue for broader accountability.

After questions and debate, the committee recorded a due-pass recommendation on the committee substitute for House Bill 78 by a roll-call vote of 5 to 3.

Votes at a glance: the committee voted 5–3 to give the committee substitute for House Bill 78 a due-pass recommendation to the full Senate.