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House panel hears heated debate over 340B changes as employers and hospitals clash
Summary
Witnesses at the House Insurance Committee hearing on HB 276 clashed over proposed changes to the 340B drug-pricing program: pharmaceutical industry representatives warned state mandates will worsen costs, while hospitals and employer groups called for transparency and protections to ensure savings reach patients.
The House Insurance Committee heard more than two hours of testimony and questions on House Bill 276 on Wednesday as industry groups, hospitals and employer coalitions delivered sharply divergent views of the 340B drug-pricing program.
Kip Snyder, state policy lead for the Pharmaceutical Research and Manufacturers of America, told the committee the program has outgrown its original purpose. "It's now a $66,000,000,000 program, which makes it second only to the Medicare part D program," Snyder said, arguing rapid growth in contract pharmacy arrangements has enabled exploitation and could drive up costs if states expand the program. He said nationwide contract pharmacy arrangements rose from about 2,300 in 2010 to roughly 205,000 today and that Ohio has about 6,700 such arrangements, roughly 2,800 inside the state.
Opponents representing employers and purchasers urged caution and transparency. Robert Miller of the Ohio Health Policy Alliance told the panel the 340B program "fails in its mission" when revenues do not reach vulnerable patients and recommended stronger reporting so the public can trace how discounts are used. Margaret Faso of the National Alliance of Healthcare Purchaser Coalitions cited research estimating that 340B's current structure already costs Ohio employers hundreds of millions annually and warned HB 276 could raise that burden.
Hospitals and safety-net providers gave a different account. Matt Perry, president of Genesis Healthcare System and an Ohio Hospital Association board trustee, asked the committee to amend HB 276 so hospitals receive the same contract-pharmacy protections other covered entities would have under the bill. He said contract pharmacies help patients pick up medications locally and cited a concrete impact when manufacturers restricted access: "When pharmaceutical companies unilaterally cut off our access to contract pharmacies, our hospital system lost $7,000,000 in 340B savings annually," Perry said, adding those savings fund programs such as low-cost prescriptions for patients.
Testimony touched repeatedly on two central fixes proponents and opponents both said are needed: federal reform of 340B and state-level transparency rules. Pharma witnesses said federal fixes are preferable; employer and purchaser groups and some legislators said states can and should require more detailed reporting now. Several witnesses pointed to recently enacted transparency laws in other states as possible templates.
Committee members asked witnesses for concrete drafting suggestions. Some members raised weakening of manufacturer data access under the bill and asked whether mileage limits or caps on the number of contract pharmacies would be effective. Witnesses offered a range of options, including stronger reporting on how 340B revenue is spent and restrictions on contract pharmacy arrangements.
The hearing closed without a committee vote. The committee will receive additional written testimony and offered to take drafting assistance from stakeholders on transparency requirements and other amendments.
