AUDIT-340B PROGRAM

Illinois General Assembly - Full Text of HR0158

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HR0158 - 104th General Assembly

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HR0158
LRB104 12436 ECR 22753 r
1
HOUSE RESOLUTION

2

WHEREAS, The original intent of the 340B Drug Pricing
3
Program was to provide discounted medicines to eligible
4
healthcare organizations for the purpose of improving access
5
to affordable medications for low-income, underinsured, and
6
uninsured patients being treated at eligible hospitals,
7
including disproportionate share hospitals, clinics, federally
8
qualified health centers (FQHC), and safety-net hospitals; and

9

WHEREAS, The 340B Program, established in 1992, was
10
designed to restore manufacturers' ability to offer discounts
11
to safety net entities, fixing an unintended problem created
12
by the Medicaid Drug Rebate Program (MDRP) enacted in 1990;
13
and

14

WHEREAS, Congress intended the 340B Program to provide
15
discounts only to federally-funded clinics and public
16
hospitals that provide direct clinical care to large numbers
17
of uninsured Americans; and

18

WHEREAS, The lack of transparency and accountability of
19
the 340B Program has resulted in the expansion of services to
20
commercially insured patient populations who are charged full
21
price for drugs purchased at steeply discounted 340B prices,
22
resulting in the intended benefit to not reach the vulnerable

HR0158
- 2 -
LRB104 12436 ECR 22753 r
1
patient populations that the program was designed to help; and

2

WHEREAS, As the 340B Program is not serving vulnerable
3
patients in the way that was intended, there is a need for
4
increased understanding regarding how covered entities utilize
5
the 340B Program and the eventual benefits that reach
6
low-income patients; and

7

WHEREAS, Nationally, the 340B Program reached $66.3
8
billion in 2023, representing a 24% increase over the
9
preceding year; and

10

WHEREAS, While 340B profits have increased, Illinois
11
hospitals only provide 2.14% of charity care compared to the
12
national average of 2.28%; and

13

WHEREAS, The appropriate and effective use of the 340B
14
Program is essential for improving health outcomes,
15
particularly for underserved communities in rural, suburban,
16
and urban areas throughout Illinois; and

17

WHEREAS, Pharmacy benefit managers (PBM) play a
18
significant role in the healthcare ecosystem, and their
19
practices regarding 340B revenue must be transparent and
20
accountable; and

HR0158
- 3 -
LRB104 12436 ECR 22753 r
1

WHEREAS, Half of the 340B contract pharmacies intended to
2
serve underserved patients in Illinois are located in affluent
3
neighborhoods; and

4

WHEREAS, Of the top five Illinois hospitals with the most
5
contract pharmacies, 24% of their 340B contract pharmacies are
6
based outside of Illinois; and

7

WHEREAS, The integrity and efficacy of state health
8
programs, such as Medicaid and the State Employees Group
9
Insurance Program, could be impacted by the lack of
10
transparency of the 340B Program and current practices; and

11

WHEREAS, The North Carolina Treasurer's report on the 340B
12
Program found that individual 340B hospitals collected as much
13
as $6,026 in average profits per claim by charging up to 12.7
14
times their 340B acquisition costs for oncology drugs when
15
treating North Carolina state employees with outpatient
16
oncology infusion drugs; and

17

WHEREAS, That same report stated, based on its findings,
18
at the very least, policymakers should consider strengthening
19
public oversight of the 340B Program by introducing
20
transparency requirements and bolstering accountability for
21
the charitable mission of hospitals; and

HR0158
- 4 -
LRB104 12436 ECR 22753 r
1

WHEREAS, The report also stated, based on its findings,
2
ultimately, the 340B Program's systemic lack of accountability
3
has hurt those 340B hospitals and other safety-net providers
4
that operate in good faith to provide lifesaving care to
5
disadvantaged patients; and

6

WHEREAS, Ensuring the transparency and accountability of
7
the 340B Program is important to understanding the potential
8
long-term costs to taxpayers, including self-insured
9
employers, because of its impact on incentivizing increasing
10
provider consolidation, distorting incentives for efficient
11
care, and impacting overall utilization; and

12

WHEREAS, Increasing the transparency and accountability
13
within the 340B Program can foster better health outcomes for
14
our most vulnerable patients and ensure taxpayer funding is
15
utilized responsibly and effectively; and

16

WHEREAS, Improving the transparency and accountability
17
within the 340B Program will ensure those 340B hospitals
18
providing needed support to our most vulnerable patients will
19
continue to access discounted medicines, and that any benefit
20
stays with vulnerable patient populations and not with large,
21
wealthy hospital systems and PBM contracted pharmacies;
22
therefore, be it

HR0158
- 5 -
LRB104 12436 ECR 22753 r
1

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE ONE
2
HUNDRED FOURTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that
3
we direct the Auditor General to conduct a comprehensive
4
investigation of the utilization of the 340B Drug Pricing
5
Program by covered entities within Illinois; and be it further

6

RESOLVED, That this investigation shall assess the amount
7
of 340B profit, defined as total patient and payer
8
reimbursement less the total 340B acquisition cost, generated
9
by 340B covered entities from both self-administered and
10
physician-administered drugs, the amount spent on third party
11
administrators for the management of the 340B Program, the
12
amount going to pharmacy benefit managers (PBM) in contract
13
pharmacy arrangements, the amount going to contract
14
pharmacies, whether covered entities maintain title to 340B
15
drugs in contract pharmacy locations, the average mark-up
16
imposed by covered entities on 340B priced drugs, and the
17
extent to which 340B entities pass 340B discounts to
18
vulnerable patients at the point of sale for both in-house and
19
contracted pharmacies; and be it further

20

RESOLVED, That this investigation shall also examine the
21
impact of these practices on state health programs, such as
22
Medicaid and the State Employees Group Insurance Program, and
23
to make recommendations for improvement; and be it further

HR0158
- 6 -
LRB104 12436 ECR 22753 r
1

RESOLVED, That suitable copies of this resolution be
2
delivered to the Illinois Auditor General Frank J. Mautino,
3
Governor JB Pritzker, Secretary Dulce M. Quintero of the
4
Illinois Department of Human Services, Director Kelly
5
Cunningham of State Medicaid and CHIP, and the respective
6
directors of each of the State Employees Group Health
7
Insurance Program plans to emphasize the State's commitment to
8
improving the transparency of the 340B Program and ensuring
9
that it effectively and efficiently serves the healthcare
10
needs of all Illinoisans.

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