The House Health & Human Services Committee advanced a package of measures aimed at increasing transparency and restricting uses of net revenue from the federal 340B Drug Pricing Program, adopting several sponsor amendments after extended testimony from hospitals, rural providers, pharmacies, patients and labor representatives.

Representative Brown and Representative Martinez, co-prime sponsors, framed the effort as an attempt to ensure that 340B savings intended to support low-income and uninsured patients are spent on direct patient services. Brown described key provisions added in committee: an 80% floor requiring that at least 80% of 340B net revenue be used for direct patient services or capital projects that maintain or increase access for low-income populations; exemptions for independent nonprofit hospitals under 50 beds; prohibitions on using 340B revenue for board compensation and for certain executive pay; and expanded reporting requirements modeled on another state’s approach.

Stakeholders offered sharply divergent testimony. Hospital systems and some industry groups warned that too-rigid restrictions could disrupt safety-net operations and questioned the feasibility of payer-specific reporting; hospital representatives also noted statutory community-benefit reporting that has been in place and a 2023 statute requiring community meetings on community benefits. Rural hospitals, community health centers and pharmacists emphasized that contract pharmacies and local access matter in geographically large areas and argued against restrictions that would limit where patients can fill prescriptions.

Representative Taggart and others stressed the program’s statutory origin: 340B is a federal program established to help low-income and uninsured patients, and state policy should preserve access for those populations. Sponsor amendments narrowed or clarified reporting fields to remove payer-specific data that hospitals said they could not reliably report, while retaining counts of prescriptions, aggregated acquisition cost of 340B drugs, aggregate payments received and aggregated contract-pharmacy overhead costs. An amendment also increased statutory protections for contract pharmacies and exempted very small nonprofit hospitals.

Committee members debated enforcement language and how the state would collect and publish data. Sponsors said much of the operational work would be managed by the Department of Health Care Policy and Financing (HCPF) under existing authority and that the Joint Budget Committee could request aggregated reports. Some members sought clearer public reporting to the General Assembly and a publicly accessible website; sponsors said they would work to restore or clarify public-reporting lines in follow-up drafting.

After votes on technical amendments and a procedural consolidation motion related to overlapping bills, the committee advanced the amended language to the Committee of the Whole. Sponsors and some members described the result as a compromise that increases transparency and sets spending expectations while preserving rural access; others on the committee objected that enforcement language had been pared back and said additional work is needed.