Alert: Oppose Illinois House Bill 3350 340B Expansion

Lower prices on medicines and increased access to charity care for citizens in need. Who wouldn’t want that?

In the Illinois Legislature, House Bill 3350 aims to expand a federal law known as 340B, which is meant to help vulnerable people afford their medicines and healthcare. 

Unfortunately, a loophole in the federal law allows hospital systems and pharmacy chains to keep for themselves the financial benefits that are meant for patients. Obviously, this well-intentioned but seriously flawed program needs to be fixed, and expanding it is not the answer to prescription drug and charity care access in Illinois.

Here’s how the 340B program currently works: Hospitals and pharmacies are allowed to buy prescription drugs at deep discounts from the pharmaceutical manufacturers, as mandated by the law, and they are reimbursed by insurance companies—and by Medicare and Medicaid and state health plans—at the full price of the drugs. The resulting windfall of “profit” is supposed to be used to help patients to afford their prescription medications, and some of the money is supposed to be used to provide charity care in areas where people are financially the most in need. 

According to the Journal of the American Medical Association, the financial benefits of the 340B program are accruing largely to hospital systems, clinics, and physicians. Indeed, the profit has become a major revenue source for some, with little to no benefit for the patient.

At Our Health Equity, our interests related to the 340B issue across the country are laser-focused on charity care access for patients. We care about whether the benefits of the 340B program actually accrue to the patients and the low-income individuals they were intended to help rather than to the health care systems’ and pharmacy owners’ bottom lines.

The 340B program is meant to help drive down patients’ out-of-pocket prescription drug costs. This is the best, first, and intended use of 340B dollars, and Illinois House Bill 3350 would do nothing to achieve this goal—it does nothing to assuage our organization’s concerns over transparency and accountability of this important program. Indeed, it offers zero reform.

There is a lot of chatter around the 340B program, with the hospital systems and big chain pharmacies trying to create uncertainty about what the program does and about what House Bill 3350 would do to the program in Illinois. They have an incentive to make the 340B program sound complex, but the issues are really quite simple. 

Disparities in access to care and health outcomes for rural, underserved, and minority populations have long been significant issues. Any policy that could potentially further restrict the availability of medicines to these populations needs to take the issue of health equity into consideration.

Making a well-intentioned but flawed program bigger is not the answer. The 340B program should be fixed before there’s any discussion about expanding it. Illinois lawmakers should provide oversight to hold covered entities responsible for delivering on 340B’s stated purpose. Simply requiring transparency and ensuring that the money flows to those eligible patients—instead of big box pharmacies and hospital systems—is a commonsense first step.

The bottom line: There should be much more discussion, analysis, and debate before determining whether to head down this uncertain and troubling healthcare policy path.

That’s why, in the meantime, Our Health Equity is urging Illinois state legislators to vote “no” on House Bill 3350.