HB 6097, An Act Concerning Prescription Drug Discount Transparency

TESTIMONY OF THE CONNECTICUT HOSPITAL ASSOCIATION
SUBMITTED TO THE HUMAN SERVICES COMMITTEE

Thursday, February 20, 2025

The Connecticut Hospital Association (CHA) appreciates this opportunity to submit testimony concerning HB 6097, An Act Concerning Prescription Drug Discount Transparency. CHA opposes the bill.

Connecticut hospitals and health systems care for patients, strengthen the state’s economy, and support vulnerable communities across the state. Every day, they work to improve healthcare access, affordability, and health equity. Even as they face ongoing challenges, hospitals provide world-class care to everyone who walks through their doors, regardless of their ability to pay. Hospitals also support an exemplary workforce as the largest collective employer in the state, contribute significantly to the state’s economy, and invest in their communities addressing social drivers of health.

HB 6097 requires “pharmacy benefit managers, pharmacies, insurers and hospitals that dispense, prescribe or provide coverage for prescription drugs discounted under Section 340B of the Public Health Service Act to file a report with the Office of Health Strategy on the cost charged to a consumer for any such discounted drug.”

Unfortunately, this legislation seeks impractical reporting on a federally regulated program to the state government for no identified public policy purpose. This proposed reporting is unnecessary, unworkable, burdensome, and will add to the costs of providing care by hospitals and pharmacies.

It is unclear, in fact, what reporting hospitals could meaningfully provide if the legislation were adopted, and whether the benefit of any such reporting would outweigh the associated costs. When drugs are dispensed through hospital outpatient pharmacies, patients are required to pay the cost-sharing applicable to their insurance, regardless of whether the insurance coverage is commercial, Medicare, Medicaid, or some other program. Beyond this cost-sharing, a claim is made to the patient’s insurer for reimbursement related to procuring and dispensing the prescription.

The assistance made possible by the federal 340B program supports communities across our state. In Connecticut, hospitals that are eligible for the federal 340B program qualify by meeting a disproportionate share hospital percentage. Meaning these hospitals are treating a disproportionately high percentage of low-income or uninsured patients for whom hospitals subsidize care.

The 340B program was established more than 30 years ago by the federal government to allow hospitals and other covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Access to drug discounts provided through the 340B program assists hospitals in meeting the needs of their patients in vulnerable communities. In many instances, the availability of 340B pricing is what allows a hospital to provide certain services at all. Without the program, many patients would need to seek care elsewhere or would receive no care at all.

The savings derived from the 340B program — meaning the difference between the discounted price at which covered entities are able to purchase 340B drugs and the non-discounted costs a covered entity would otherwise incur — supports the $1.4 billion in unreimbursed care for low-income Medicaid beneficiaries provided each year, the nearly $271 million in uncompensated care (charity care/bad debt) provided each year, and the millions in community investments provided each year by hospitals across the state.

The purpose of the federal 340B program is for covered entities to use the program broadly to reach more eligible patients and offer more comprehensive services. Hospitals are able to support their critical financial assistance policies, which provide free and reduced-cost care, in part due to 340B program savings. Connecticut hospitals strive to ensure that inability to pay for services does not deter anyone from seeking needed medical care, and 340B program participation helps support the ability of hospitals to offer financial assistance policies beyond statutory requirements, helping to ensure more patients can afford their medical care.

A well-functioning 340B program is essential to hospitals that serve vulnerable communities and, as the statute describes, stretch scarce federal resources as far as possible to support essential services for their communities.

Unfortunately, this legislation adds unnecessary burden to 340B covered entities with no benefit to patients.

Thank you for your consideration of our position. For additional information, contact CHA Government Relations at (203) 294-7301.