The Michigan Senate voted Thursday to extend protections for health care systems that take part in a federal drug affordability program.
The 340B Program lets care providers like children’s hospitals and cancer centers work with pharmacies to buy medications at a discount. Under federal guidelines, drugmakers that participate in Medicaid are required to also take part in the 340B Program.
The bills passed in the Senate Thursday would prevent drug makers from limiting access to covered meds.
Elizabeth Kutter is senior director, government and political affairs with the Michigan Health and Hospital Association. Kutter said those savings are a “lifeline” for providers treating underserved areas.
“They're able to use 340B to ensure that cancer care is local. So, if you're a patient and you live in and around that community, it means you can drive 15 minutes to get cancer care instead of 45, or an hour or two hours to the next closest hospital nearby,” Kutter said.
She said, without 340B, some hospitals wouldn’t be able to provide their services.
Pharmaceutical companies, however, have lamented the rise in participating pharmacies and healthcare providers in recent years.
They’ve complained large hospital systems in well-off areas are getting in on the savings without passing them along to the patients who need them.
Stami Turk is a spokesperson for the pharmaceutical industry lobby group, PHRMA.
“The negative implications of states like Michigan solidifying the 340B hospital medicine markup program is more than what meets the eye. Right now, big tax-exempt hospitals and clinics continue to abuse this federal program to charge huge markups on medicines to boost their profits. This is bigger than just two industries fighting: patients, taxpayers and employers are all negatively impacted by hospital markups. This legislation does nothing to help low-income and uninsured patients get access to critical medicines and allows hospitals free rein to markup medicines. Now is the time for transparency and accountability to stop this greedy behavior,” Turk said in an emailed statement.
That’s a concern that Kutter totally rejected. She argued that the 340B program already faces strict oversight at the federal level and that not just anyone can join anyway.
“You have to be an entity that proves their eligibility in the program, which by default means that you are serving patients who are extremely vulnerable. You're serving kids. You're serving cancer patients. You're serving people who, if your hospital closes or if healthcare access becomes limited, suddenly you're seeing a very serious hospital desert for patients,” Kutter said.
The bipartisan-sponsored bills passed the Michigan Senate with widespread bipartisan support.
One bill in the package deals specifically with keeping drugmakers from limiting drug access. The other bill requires hospitals to be in compliance with some drug pricing transparency laws to collect debts, something Kutter said would make Michigan’s laws unique.
One of the “no” votes on the bills, however, came from Senator Sylvia Santana (D-Detroit).
She said, despite having the right intent, the bills don’t do enough to ensure patients in need are actually being served.
“It does not require covered entities to explain how they spend their savings. It does not ensure that 340B dollars go towards charity care or other critical services that underserved patients need,” Santana said during a floor speech Thursday.
The bills now go to the Michigan House.
