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The federal 340B program allows drug manufacturers that take
part in Medicaid to provide discounts to participating clinics
and hospitals, often rural, who in-turn are supposed to use
savings to reduce costs for patients, provide charity healthcare
and more.
State Rep. Anna Moeller, D-Elgin, sponsored the legislation and
in May explained her reasoning.
“Since 2020, changes in how the program operates have created
significant challenges for providers across Illinois. Federally
qualified health centers in Illinois have lost at least $60
million because of restrictions,” Moeller said.
North Chicago-based Abbvie led a group of drug makers in a
lawsuit filed earlier this month in federal court in the
Northern District of Illinois.
The lawsuit contends the Illinois law conflicts with what
Congress intended for the program to be by loosening
restrictions and requiring drug companies to sell their drugs at
the statutorily reduced price to safety-net hospitals, clinics,
and their chosen contract pharmacies with no restrictions.
Moeller explained the law differently than how manufacturers
presented in the lawsuit.
“The pharmaceutical industry restricted the number of contract
pharmacies that 340B covered entities could contract with to
dispense 340B medications. This bill would lift that
restriction,” Moeller said.
In May when the legislation was being considered, Illinois’
Central Management Services raised concern the program’s
expansion could increase costs for commercial and state employee
health insurance due to lost rebates and high drug markups
imposed by manufacturers to offset the expansion.
CMS released a memo that detailed costs of the program to
Illinois employers, including the state for its employee
insurance benefits.
Rep. Patrick Windhorst, R-Metropolis, questioned the law before
it was passed, on the grounds of increased insurance rates for
state employees.
Moeller said the CMS memo was presented to the agency by the
pharmaceutical industry and the situation could be different.
“It outlined the potential impacts to the state group health
insurance program. I think there is some dispute and discussion
as to the veracity and integrity of that report,” Moeller said.
In a statement when the law was signed, Will May, the senior
director of public affairs for Pharmaceutical Research and
Manufacturers of America said the 340B program is driving costs
up for Illinoisans, and PhRMA intends to work with lawmakers to
find a better solution.
The group of drug manufacturers are seeking to block the law
from taking effect until a judge rules on its constitutionality.
Otherwise, the law came into effect upon the governor’s signing.
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