A new proposed bill looks to address an old drug pricing program

SALT LAKE CITY — A new proposed bill is being talked about on Utah’s Capitol Hill because the legislation addresses the 340B Drug Pricing Program, something that isn’t so popular with several large national groups.

Inside Sources spoke with State Representative Steve Eliason, who is the bill’s House sponsor, about the 340B Drug Pricing Program.

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What is the 340B Drug Pricing Program?

Eliason: Congress created the program in the last century. The program was a way to save tax payers money and provide a better patient access and care for lower income populations, such as people on Medicaid. 

Eliason:Congress basically said, “Look, our Medicaid rates are low, so if pharmaceutical companies want to do business with Medicare and Medicaid, they have to agree to sell qualifying drugs to safety net hospitals.”

According to Eliason, some examples of safety net hospitals include rural hospitals, federally qualified health centers, and other hospitals that take care of disproportionate share  of Medicaid patients.

Eliason: You have to sell the safety net hospitals the drugs at a lower cost. That program worked well for a couple decades, but the pharmaceutical companies have just continued putting restrictions, greatly enhancing their profits. It’s really hurting the hospitals.

What does the 340B Drug Pricing Program do?

Eliason: This bill simply says states reserve the right to run how they do drug distribution. 

According to Eliason, Utah would reserve the right to run the (drug) business the way the state sees fit, and not let the shots be called by out of state pharmaceutical companies.

The 340B Drug Pricing Program: A complicated system…

Eliason: Under federal law, if somebody goes into a hospital emergency room, regardless of their ability to pay, that hospital is required to serve that patient. If that treatment involves the administration of a very expensive drug, the hospital has to pay for it. 

So, systems such as Intermountain Health Care, which is the largest in the state, the University of Utah, federally qualified health centers that help a lot of remote and lower income individuals, have to serve their patients no mater what.

Eliason: Every year the hospitals in Utah give close to a billion dollars in charity care. And it’s the funds from the 340B program that help pay for a significant portion of that. 

According to Eliason, this bill is about allowing hospitals to serve their patients in need, instead of making the pharmaceutical companies money.

Why now? 

Eliason: Four or five years ago the pharmaceutical companies started slowing chipping away saying ‘well we aren’t going to ship you certain drugs as part of this program.

Eliason said that Congress hasn’t clarified the 340B Drug Pricing Program law because they are often in grid lock.

Eliason: So, under the concept of Federalism several states, mostly red states, stepped up and said ‘you know, we can actually fill the void of the guidance on this. We can clarify. It’s the states right to determine drug distribution under the commerce clause.’ 

When states started determining drug distribution pharmaceutical companies started suing the states. But according to Eliason the states have been winning almost all of their cases.

Why are some against the new bill addressing 340B Drug Pricing Program?

Eliason said he thinks one of the biggest things people should take away is to be careful when you see something on the internet. Like an ad supporting or fighting a bill.

Eliason: When you see something on the internet and you see it was paid for by a group to ‘make America amazing, bring back mother hood and apple pie’ I mean literally that could be the name of the group. And you think well that sounds like a good group. Well a lot of times these groups are funded by dark money because they don’t have disclose where it comes from. But it could be funded by a single interest group that will profit if a certain bill is passed or isn’t passed.  

Eliason said the saying in politics is ‘follow the money’ still applies here even though we don’t know exactly who is funding it. You just have to ask who would benefit from the 340B Drug Pricing Program not being addressed? 

Related: 

• Utah sends employees to Mexico for lower prescription drug prices
• This is why prescription drugs cost so much
• FDA approves first state request to import drugs from Canada
• How the FDA helps jack up the price you pay at the pharmacy counter