State bill would help make drugs more affordable

In Goodland, El Dorado, and towns across the state of Kansas, families are struggling to make ends meet.

Access to affordable healthcare is a pressing concern for many, especially the more than 10% of Kansans living below the poverty line and uninsured individuals who rely on government programs to help cover the cost of essential medications.

But when those safety nets fail to serve Kansans in need, our state shouldn’t fuel the problem.

Unfortunately, the Kansas Legislature originally sent a budget bill to the governor that will allow unscrupulous hospitals and pharmacy middlemen to exploit the 340B Drug Pricing Program for profits without making medicines more affordable for our neighbors.

A follow-up appropriations bill passed by the Legislature, House Bill 2551, would help limit that damage, and Gov. Laura Kelly should sign it into law.

PHANTOM DISCOUNTS

The 340B is a federal program that was designed to help low-income, underinsured, and uninsured patients access their medicines.

The program requires drug manufacturers to provide discounts on prescription medicines to certain safety-net, 340B hospitals, for-profit “contract pharmacies,” and federally-funded clinics.

The intent is that those 340B hospitals, pharmacies, and clinics will pass the savings they receive onto Kansas patients to help them afford their medications, but nothing in the federal law requires them to do so.

To make matters worse, 340B hospitals, pharmacies, and clinics in Kansas don’t even have to report on how they use drug discounts to benefit patients.

In the absence of those common-sense guardrails, 340B has exploded in Kansas and become a cash crop for big pharmacies and the nearly 100 340B hospitals in our state.

Today, only 49% of contract pharmacies in Kansas are situated in medically underserved areas.

More than half of Disproportionate Share Hospitals (DSHs) in

Kansas – or those serving a certain number of lowincome Medicare and Medicaid beneficiaries – earn more in estimated 340B profit than they spend on charity care.

Statewide, 80% of 340B hospitals in Kansas are below the national average for charity care levels.

Big pharmacy chains like CVS have even admitted that the 340B program is a significant revenue driver. Meanwhile, one study revealed that most patients received 0% discounts even after the drug was purchased by providers at a discounted rate.

In rural Kansas, the exploitation of 340B is worse.

A “Rural Referral Centers” designation within the 340B program seeks to enable rural providers to expand health care services in rural areas.

However, Rural Referral Centers do not have to be in rural areas or treat rural patients to qualify as 340B eligible.

In fact, a new study shows 82% of active 340B Rural Referral Centers are in urban areas, and 77% of their patients reside in urban areas.

This loophole is further compounding challenges for the 57% of rural hospitals in Kansas that are on the brink of closing.

Rather than exacerbating existing challenges, Kansas legislators and

Gov. Kelly should prioritize reforms that genuinely make medicines more affordable for vulnerable patients.

Signing H.B. 2551 into law would be a start