Under-the-radar drug discount program helps make medicine more affordable
Rep. Jon D. Brien, Rep. Megan L. Cotter and Rep. Marie Hopkins —an independent, a Democrat and Republican from three very different areas of the state — are joining forces to call for the passage of legislation to prevent practices that subvert a critical prescription drug discount program.
The legislation (2025-H 5634), sponsored by Representative Brien and
cosponsored by Representatives Cotter and Hopkins, prohibits insurers, pharmacy
benefits managers and other payors from engaging in discriminatory practices
against community hospitals, clinic and other health care provider agencies
that purchase prescriptions through the federal 340B discount program.
The 340B program is a lifeline for community health centers, safety-net hospitals and rural clinics. It allows them to purchase medications at reduced prices and reinvest those savings into direct patient care — providing things like primary care, behavioral health, dental services, and addiction treatment to tens of thousands of Rhode Islanders, regardless of income or insurance status.
Under 340B, prescription drug manufacturers must
enter a pharmaceutical pricing agreement that discounts the drug for qualified
entities that serve vulnerable populations, in order to have the drug qualify
for coverage by Medicaid and Medicare Part B.
The 340B discount doesn’t rely on taxpayer dollars. It’s a
self-sustaining program that makes health care more accessible and more
affordable.
But over the past few years, some pharmaceutical companies
and pharmacy benefit managers (PBMs) have undermined the intent of the program.
They’ve limited which pharmacies providers can work with, imposed unfair
restrictions, and reimbursed 340B providers less—sometimes solely because
they’re using a discount program designed to help patients.
“These discriminatory tactics are an assault on the health care system, and in particular on the programs that provide lifesaving services to people who can least afford health care,” said Representative Brien (I-Dist. 49, Woonsocket, North Smithfield), who noted that his city’s Thundermist Health Center and Landmark Medical Center are both 340B entities that serve thousands every year. “We must close the loopholes that allow this abuse to prevent our safety-net programs from being bled dry, leaving Rhode Islanders without the care they need.”
Said Representative Cotter (D-Dist. 39, Exeter, Richmond,
Hopkinton), “These actions don’t just hurt clinics. They directly impact
patients. They make it harder for people to pick up their prescriptions
locally. They chip away at the resources that community providers depend on to
keep their doors open. We must stand up to Big Pharma and the insurance
middlemen that have been putting profit over people.”
In Representative Cotter’s district, Wood River Health
Clinic relies on revenues from 340B drugs to fund, among other things, a
part-time driver and maintenance on a van that provides much-needed
transportation for patients in its rural service area. But the clinic has lost
about $1 million in 340B revenues in the last two years, its president and CEO,
Alison L. Croke, said in testimony in favor of the bill.
“This isn’t a left or right issue—it’s a basic question of
fairness and priorities,” said Representative Hopkins (R-Dist. 21, Warwick),
who began her nursing career as an acute and criminal psychiatric nurse, and
now teaches nursing at CCRI while also serving as a school-nurse substitute.
“This bill ensures the providers who are doing the hard work of caring for our
most vulnerable neighbors aren’t punished for using a system that was designed
to help them provide that care. Passing this bill will protect the integrity
and effectiveness of the 340B program and stand up for local health centers,
clinics, and hospitals that are doing the work on the ground to protect public
health.”
The legislation was heard by the House Health and Human
Services Committee April 10. Companion legislation (2025-S 0114) is being sponsored in the Senate by Sen.
Bridget Valverde (D-Dist. 35, North Kingstown, East Greenwich, South
Kingstown).
