HR0158 104TH GENERAL ASSEMBLY

HR0158 LRB104 12436 ECR 22753 r

HOUSE RESOLUTION

WHEREAS, The original intent of the 340B Drug Pricing Program was to provide discounted medicines to eligible healthcare organizations for the purpose of improving access to affordable medications for low-income, underinsured, and uninsured patients being treated at eligible hospitals, including disproportionate share hospitals, clinics, federally qualified health centers (FQHC), and safety-net hospitals; and

WHEREAS, The 340B Program, established in 1992, was designed to restore manufacturers' ability to offer discounts to safety net entities, fixing an unintended problem created by the Medicaid Drug Rebate Program (MDRP) enacted in 1990; and

WHEREAS, Congress intended the 340B Program to provide discounts only to federally-funded clinics and public hospitals that provide direct clinical care to large numbers of uninsured Americans; and

WHEREAS, The lack of transparency and accountability of the 340B Program has resulted in the expansion of services to commercially insured patient populations who are charged full price for drugs purchased at steeply discounted 340B prices, resulting in the intended benefit to not reach the vulnerable patient populations that the program was designed to help; and

WHEREAS, As the 340B Program is not serving vulnerable patients in the way that was intended, there is a need for increased understanding regarding how covered entities utilize the 340B Program and the eventual benefits that reach low-income patients; and

WHEREAS, Nationally, the 340B Program reached $66.3 billion in 2023, representing a 24% increase over the preceding year; and

WHEREAS, While 340B profits have increased, Illinois hospitals only provide 2.14% of charity care compared to the national average of 2.28%; and

WHEREAS, The appropriate and effective use of the 340B Program is essential for improving health outcomes, particularly for underserved communities in rural, suburban, and urban areas throughout Illinois; and

WHEREAS, Pharmacy benefit managers (PBM) play a significant role in the healthcare ecosystem, and their practices regarding 340B revenue must be transparent and accountable; and

WHEREAS, Half of the 340B contract pharmacies intended to serve underserved patients in Illinois are located in affluent neighborhoods; and

WHEREAS, Of the top five Illinois hospitals with the most contract pharmacies, 24% of their 340B contract pharmacies are based outside of Illinois; and

WHEREAS, The integrity and efficacy of state health programs, such as Medicaid and the State Employees Group Insurance Program, could be impacted by the lack of transparency of the 340B Program and current practices; and

WHEREAS, The North Carolina Treasurer's report on the 340B Program found that individual 340B hospitals collected as much as $6,026 in average profits per claim by charging up to 12.7 times their 340B acquisition costs for oncology drugs when treating North Carolina state employees with outpatient oncology infusion drugs; and

WHEREAS, That same report stated, based on its findings, at the very least, policymakers should consider strengthening public oversight of the 340B Program by introducing transparency requirements and bolstering accountability for the charitable mission of hospitals; and

WHEREAS, The report also stated, based on its findings, ultimately, the 340B Program's systemic lack of accountability has hurt those 340B hospitals and other safety-net providers that operate in good faith to provide lifesaving care to disadvantaged patients; and

WHEREAS, Ensuring the transparency and accountability of the 340B Program is important to understanding the potential long-term costs to taxpayers, including self-insured employers, because of its impact on incentivizing increasing provider consolidation, distorting incentives for efficient care, and impacting overall utilization; and

WHEREAS, Increasing the transparency and accountability within the 340B Program can foster better health outcomes for our most vulnerable patients and ensure taxpayer funding is utilized responsibly and effectively; and

WHEREAS, Improving the transparency and accountability within the 340B Program will ensure those 340B hospitals providing needed support to our most vulnerable patients will continue to access discounted medicines, and that any benefit stays with vulnerable patient populations and not with large, wealthy hospital systems and PBM contracted pharmacies; therefore, be it

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE ONE HUNDRED FOURTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we direct the Auditor General to conduct a comprehensive investigation of the utilization of the 340B Drug Pricing Program by covered entities within Illinois; and be it further

RESOLVED, That this investigation shall assess the amount of 340B profit, defined as total patient and payer reimbursement less the total 340B acquisition cost, generated by 340B covered entities from both self-administered and physician-administered drugs, the amount spent on third party administrators for the management of the 340B Program, the amount going to pharmacy benefit managers (PBM) in contract pharmacy arrangements, the amount going to contract pharmacies, whether covered entities maintain title to 340B drugs in contract pharmacy locations, the average mark-up imposed by covered entities on 340B priced drugs, and the extent to which 340B entities pass 340B discounts to vulnerable patients at the point of sale for both in-house and contracted pharmacies; and be it further

RESOLVED, That this investigation shall also examine the impact of these practices on state health programs, such as Medicaid and the State Employees Group Insurance Program, and to make recommendations for improvement; and be it further

RESOLVED, That suitable copies of this resolution be delivered to the Illinois Auditor General Frank J. Mautino, Governor JB Pritzker, Secretary Dulce M. Quintero of the Illinois Department of Human Services, Director Kelly Cunningham of State Medicaid and CHIP, and the respective directors of each of the State Employees Group Health Insurance Program plans to emphasize the State's commitment to improving the transparency of the 340B Program and ensuring that it effectively and efficiently serves the healthcare needs of all Illinoisans.