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Office of the
Illinois Attorney General
Kwame Raoul

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July 31, 2023

Chicago – Attorney General Kwame Raoul, as part of a coalition of 23 attorneys general, urged a bipartisan group of United States senators to reform and strengthen the 340B Drug Pricing Program to ensure that essential “safety net” health providers can more effectively provide affordable medicines and a comprehensive range of health-related services to financially vulnerable patients. The attorneys general sent a letter in response to a Request for Information (RFI) issued by the senators last month seeking to improve the integrity and sustainability of this vital affordable drug and health care program.

Created in 1992 with bipartisan support in Congress, the 340B Program has been a lifeline to low-income patients and the community-based health centers, clinics, and hospitals that serve them by ensuring access to care and medication that might otherwise be unaffordable. Overseen by the Health Resources Services Administration (HRSA) operating within the United States Health and Human Services Department (HHS), the 340B Program requires drug manufacturers participating in Medicare and Medicaid to provide discounted drugs to eligible health centers and hospitals, including community health centers, nonprofit and public hospitals, and Ryan White HIV/AIDS clinics. These “covered entities” can dispense discounted drugs to low-income patients through either their in-house pharmacies or outside pharmacies with which they contract.  

In their letter, Raoul and the attorneys general call on Congress to reaffirm its historically strong support for the 340B Program and to provide HRSA the authority necessary for effective oversight of the program.

“No one should have to choose between paying for basic necessities or costly but essential medications,” Raoul said. “That’s why I am proud to join my fellow attorneys general in urging Congress to make reforms to the 340B Drug Pricing Program. The recommended statutory, regulatory and budgetary changes will strengthen the 340B Program in critical ways and allow patients greater access to the medicine they need.”

In recent years, drug makers who have voluntarily agreed to participate in the 340B Program and state Medicaid programs have undermined the integrity and efficient operation of the program by flouting federal requirements. 

The ability of patients - who may have limited access to transportation, live in remote or rural areas, or are confined to their homes - of 340B covered entities to obtain expensive but medically necessary drugs at an affordable cost, often depends on the use of outside “contract” pharmacies. The attorneys general argue in their letter that such contract pharmacies enable federally qualified health centers (FQHCs), other community health centers, clinics, and public hospitals to carry out their critical role by increasing patient access to the benefits of the 340B Drug Pricing Program and allowing their patients to obtain medications at accessible and convenient locations.

According to the coalition, manufacturers have justified unilaterally imposing restrictions on 340B covered entities’ use of contract pharmacies to dispense medications on exaggerated claims that either duplicate discounts could be applied, or that contract pharmacies are selling discounted 340B drugs to ineligible patients. The 340B statute already bans such duplicate discounting and diversion. The letter states that these unilaterally imposed conditions by drug manufacturers have created enormous barriers to the purchase of common, yet lifesaving and life-sustaining drugs.

The letter also calls for more transparency in the program and recommends that Congress grant HRSA clear statutory authority to harmonize existing reporting requirements for each type of 340B covered entity. The attorneys general suggest that Congress mandate that all 340B covered entities minimally report the aggregated acquisition costs for purchasing drugs under the 340B Program, the aggregated payment amount received for drugs obtained under the 340B Program, and the aggregated payment made to contract pharmacies to dispense drugs obtained under the 340B Program. 

Raoul was joined in signing the letter by the attorneys general of Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Kansas, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont and Wisconsin.