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State House committee considers drug pricing legislation

Interior of the state Capitol's rotunda.
Lester Graham
Michigan Public

A federal prescription drug program could see a boost under a Michigan bill heard in committee Wednesday.

The 340B Drug Pricing Program requires drugmakers that take part in Medicaid to provide eligible groups with discounted medications. Those health care-providing entities can contract with pharmacies to get that medicine to patients.

The bill would prevent drug manufacturers from choosing to not work with or not provide those pharmacies that the entities contract with.

Representative Alabas Farhat (D-Dearborn) sponsors the legislation. He said preventing that discrimination will expand access to the program.

Farhat said that could free up money for care providers to create more programs like health care screenings, mobile clinics, or other efforts to treat patients in underserved areas.

“It’s capturing the exorbitant profits that PhRMA is making,” Farhat said, referring to the Pharmaceutical Research and Manufacturers of America, the main industry lobbying group for pharmaceutical companies. “And it puts those profits back into the Michigan hospital health care ecosystem to go towards, again, this is federally required, community benefit.”

The 340B program aims to help groups that serve marginalized communities, like cancer centers, children’s hospitals, and rural care providers.

During Wednesday’s hearing, representatives from PHRMA shared concerns that larger health care systems are taking advantage of 340B eligibility and the ability to contract with many pharmacies to pad their profits.

Kristin Parde is deputy vice president of state advocacy with PHRMA.

“This bill would have the unintended consequence of codifying one of 340B program’s major flaws. A lack of accountability to patients while benefiting the bottom lines of large hospital systems, chain pharmacies and pharmacy benefit managers,” Parde said.

The bill remains before the House Insurance and Financial Services Committee.