The Michigan Senate overwhelmingly passed bills, SB 94 and SB 95, that “prohibits drug manufacturers from restricting hospitals’ access to discounted drugs under the federal 340B Drug Pricing Program.” Currently, hospitals can force drug manufacturers to sell them products at a deep discount and then resell those drugs for a large gain. 

The 340B Drug Pricing Program is a federal program that requires pharmaceutical manufacturers that participate in Medicaid to sell outpatient drugs to organizations that care for uninsured or low income patients at reduced prices. 

MichBio provided written testimony on how the 340B program is in desperate need of systemic reform, and something that can only be accomplished comprehensively by Congress, not at the state level. Moreover, this bill really doesn’t directly impact patients at all in any clear, comprehensive manner. With no transparency and accountability requirements for participating hospitals the 340B program has become a huge profit center for large hospital systems, chain pharmacies, and pharmacy benefit managers. 

SB 94 passed 33-3, and SB 95, passed 35-1 in the full Senate, and would place transparency requirements on drug manufacturers and 340B entities would have to file a yearly 340B program recertification, an affidavit affirming compliance with federal code and federal auditing requirements, as well as a description of any audits over the previous 12 months, and a description of the effect the 340B program has had on patients. The two bills were passed with a tie-bar to each other. The transparency requirements placed on the hospitals are toothless in terms of revealing how the 340B entities spend their drug purchase discounts. 

Legislators that voted in opposition were adamant that their colleagues truly didn’t understand the program, shouldn’t be intervening in a federal program, and in the end, wouldn’t be benefiting patients at all. 

It’s unclear how quickly the legislation will be adopted by the House. However, MichBio and its partners, BIO and PhRMA, along with member companies continue with outreach efforts to oppose the bills.