Red States Push Back Against Big Pharma, Fight to Protect Drug Discount Program

(AP Photo/Mark Lennihan)

The Louisiana House of Representatives voted 97-2 to pass a bill that would protect rural and other critical care hospitals from paying inflated prices for prescription drugs, defying an effort by Big Pharma and its top lobbyist to block the bill.


Louisiana is joining a number of mostly-red states in pushing back against attempts by Pharma to raise prescription drug prices. These states are passing — or trying to pass — legislation that would prevent pharmaceutical makers from interfering with hospitals and pharmacies that participate in the federal 304b discount program.

340b is a federal program that requires drug companies to offer their products at deeply-discounted prices to hospitals and clinics that predominantly serve working-class, rural patients. Without these discounts, many of these so-called critical access providers would not be able to stay in business or provide the same level of care that they currently do.

The reason that 340b hospitals and clinics might be in trouble without the discounts is that while these providers get to buy their drugs at discounted prices, they are allowed to receive full reimbursement from insurance companies and wealthier patients for providing the drug — an arrangement that provides critical revenue for hospitals and clinics that are often strapped for resources.

Louisiana’s move comes in stark contrast to the policies of places like New York state, where Governor Kathy Hochul (D) has pushed ahead with new regulations originally proposed by disgraced former Gov. Andrew Cuomo that would have the state government take over all drug purchasing and suspend 340b. Connecticut Governor Ned Lamont has also been attacking the 340b program, which benefits patients mostly not comprising his political base, through a bill he personally has sponsored in the state legislature (despite being a governor).


Louisiana is joined in protecting 340b by other states, such as Arizona, which recently passed a law that outlawed any kind of discrimination against hospitals that participate in the 340b program.

Neighboring Arkansas is currently battling Pharma’s lawyers in federal court over similar legislation to the bill currently working its way through the Louisiana legislature.

Pharma even sent its top corporate lobbyist, Corbin Santo, to pressure the legislature into blocking the bill.

“Unfortunately, more often than not, the 340B program of today is doing a disservice to [low-income and vulnerable patients] and our broader healthcare system,” Santo said during an April 20 hearing on the Louisiana bill, HB548.

Any reforms to the 340b program “…must occur at the federal level” because of “systemic problems that have permitted the program to stray from its original intent.”

Santo must have missed the federal efforts happening that would further protect 340b and stop Pharma’s efforts to kill the program.

new bill proposed by Reps. Dusty Johnson (R-S.D.) and Abigail Spanberger (D-Va.) — the PROTECT 340b Act — would stop insurance companies from colluding with Pharma to deny 340b hospitals the full reimbursement for the medications they prescribe.


“Specifically, the Spanberger-Johnson legislation would prevent companies from treating 340B providers differently with regards to reimbursement of fees, participation in standard or preferred networks, or inventory management systems — and it would block them from interfering in a patient’s choice to receive drugs from a 340B pharmacy,” Reps. Johnson (R-S.D.) and Spanberger (D-Va.) said in their announcement of the bill.

Louisiana’s bill has been sent over to the State Senate, where it is awaiting more hearings and a full vote.


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