Stakeholders clash over 340B changes in Georgia hearing; no vote taken

A House committee held an extended hearing on House Bill 139, a proposal that would constrain manufacturer, wholesaler and pharmacy practices associated with the federal 340B drug discount program. The session drew hospitals, community health centers, manufacturers, pharmacy trade groups and policy analysts and ended without a committee vote.

The bill’s sponsor opened with a primer on the federal 340B program and said the proposal would direct manufacturers, pharmacy benefit managers (PBMs) and wholesalers to comply with the federal statute’s allowance for covered entities to contract with multiple contract pharmacies. The sponsor said the goal was to protect community benefit uses of 340B savings in Georgia while following an Arkansas model that has survived legal challenge.

Hospital and rural-health witnesses said 340B discounts are a critical revenue source that supports charity care, cancer screenings, dialysis and other services for uninsured and underinsured patients. A speaker who manages 340B programs for rural hospitals said several Georgia hospitals have seen steep reductions in 340B savings after manufacturers or payers limited contract-pharmacy relationships; Jefferson Hospital’s 340B savings fell from about $408,000 in 2020 to $247,000 after restrictions, the witness said. Another hospital reported savings collapsing from $761,000 in 2020 to roughly $1,677 in 2024 for the same reason.

Community health-center representatives told the committee that health centers rely on 340B revenues and pass through one-third of drug costs to patients; they warned that limiting contract-pharmacy arrangements could force patients to travel farther to fill prescriptions and undermine access in large, rural service areas. The Georgia primary-care network testimony reported health centers serve about 700,000 patients at 330 clinical sites in the state.

Manufacturers and industry groups strongly opposed the bill. Witnesses from Johnson & Johnson, GlaxoSmithKline and PhRMA argued the 340B program had grown beyond its original intent, that discounts disproportionately benefit large for-profit contract pharmacies and middlemen, and that most patients do not directly receive the discounted prices. Johnson & Johnson’s vice president of law recommended federal reform and urged caution about state-level fixes; GlaxoSmithKline’s policy director noted reports that some hospitals mark up outpatient drug billing and that expanding contract pharmacies can shift patients to higher-cost providers of care.

Trade groups for wholesalers and distributors also urged careful drafting. The Healthcare Distribution Alliance asked the committee to remove wholesalers from the bill’s mandatory-language provisions because federal controlled-substance law and settlement obligations create compliance responsibilities that could conflict with a state directive.

Policy analysts and transparency advocates urged more data. A state-focused researcher said about 57% of contract pharmacies associated with covered entities in Georgia are located in relatively affluent neighborhoods, and that a minority of patients see direct discounts at the point of sale. Industry witnesses contrasted that with hospital testimony that 340B-generated funds supported millions in uncompensated care and community programs.

Committee members asked sponsors about transparency and whether the committee should pursue data-collection requirements rather than a state-level mandate that critics say risks federal preemption. The sponsor said he preferred to stay close to the Arkansas statute but was open to further discussion on adding transparency provisions.

No committee vote was taken at the hearing.