Michigan HB 5350: Another Health Care Bailout?

Mike Kowall term limited out of the Michigan Senate in 2018. He served as the (Republican) Majority Floor Leader.  He believes that Michigan HB 5350 will subsidize hospitals at the expense of prescription drug consumers.  HB 5350 would amend the Public Health Code to prohibit pharmaceutical manufacturers from denying drug access to certain organizations that participate in the HRSA 340B Drug Pricing Program.

Specifically, the bill would prohibit pharmaceutical manufacturers from:

• Denying, prohibiting, discriminating against, refusing or withholding pricing for - or otherwise limiting the dispensing, purchase, ordering, delivery, or receipt of - a drug purchased by a 340B entity, including a drug purchased to be dispensed or administered
under a contract pharmacy arrangement.

• Prohibiting a pharmacy from contracting or participating with a 340B entity by denying 340B pricing on, or the pharmacy's access to, a drug that is manufactured by a manufacturer or based on a pharmacy's relationship with a 340B entity.

HB 5350 would adopt the definition of a "340B entity" used in  42 U.S. Code § 256b.1

Mr. Kowall's opinion, as posted on RealClearHealth's blog:

https://www.realclearhealth.com/blog/2024/06/20/another_michigan_healthcare_bailout_1039369.html

Another Michigan Healthcare Bailout?
By Mike Kowall - June 20, 2024

Before the legislative session concludes on June 27, some Michigan lawmakers are working overtime to ram yet another healthcare giveaway through the statehouse. They should think twice before doing so because their bill represents as bad politics as it does policy.

The legislation in question, House Bill 5350, will expand 340B, a program that has for years given drugs to certain hospitals serving low-income Americans at sharply discounted prices. HB 5350 doubles down on a program rife with waste, fraud and abuse. It won’t help a single vulnerable Michigan receive the care they need. It will just allow very profitable hospitals and pharmacies to further line their pockets at the great people of Michigan’s expense.

Study after study shows that hospitals aren’t passing their 340B cost savings along to patients. One demonstrated that 98% of patients are not receiving any benefit from the 340B program. Another found that Medicare beneficiaries paid an eye-popping 48% more for certain prescriptions at 340B hospitals than non-340B ones.

Translation: the government is requiring pharmaceutical companies to provide hospitals drugs at sharply discounted rates, but instead of passing the cost savings to the vulnerable patients they serve, 340B hospitals are pocketing the cost savings while marking up our prescription costs even further. Why on earth would Michigan expand this disastrous program?

Some Michigan lawmakers might think few care about this program outside those hospitals and pharmacies who benefit. However, when voters learn how badly the program has drifted from its original noble intent, they aren’t happy.

According to a recent survey from Consumer Action for a Strong Economy, an organization that describes itself as “the nation's foremost non-profit, nonpartisan organization devoted to the singular cause of promoting consumer interests,” 78% of Michigan voters find it extremely or very concerning that Medicare beneficiaries are paying more at 340B hospitals than at other facilities. 81% also find it extremely or very concerning that patients are not receiving any benefit from the 340B program whatsoever.

While certainly concerned by this 340B giveaway, most of these Michigan voters would not characterize themselves as surprised. The Great Lakes State has authorized an incredible $4.4 billion in corporate handouts over the past year. The corporations feasting on taxpayer money even include companies with direct connections to the Chinese Communist Party.

It's one thing to play politics with standard government contractual awards; it’s quite another to play it with healthcare access. 78% of Michigan residents already worry about paying for their future healthcare bills. While the statehouse should be providing these vulnerable constituents with the healthcare relief they need and deserve, it’s busy tending to the affairs of high-priced healthcare lobbyists instead. Disenchanting is not a strong enough adjective to describe this sad state of affairs.

The United States Congress is already working on reforming the fraud-ridden 340B program. The Michigan legislature doubling down by expanding it would be the definition of tone deaf.

If state representatives have any political sense, they will choose to stand down on HB 5350 and let Congress lead. With consumer watchdogs publicly exposing this bill for what it is, our representatives can no longer pass it in the shadows. Voters are now watching closely, and if the last few years have demonstrated anything, it’s that they aren’t afraid to bring political consequences to the ballot box.