Bill to protect access to discounted drugs for low-income Marylanders headed to governor

In the hectic last days of the legislative session, it can be challenging to predict which bills will be successful and go on to become law, and which ones will get lost in the legislative shuffle.

One bill that got a boost of momentum right before the end of the 2024 legislative session is House Bill 1056, which tries to keep lower price prescription drugs accessible to lower income Marylanders across the state.

The bill, sponsored by Del. Pam Lanman Guzzone (D-Howard), passed unanimously in the House on March 18, but didn’t get Senate consideration until the weekend before the last day of session.

“This actually couldn’t get over the hill until…the Saturday before Sine Die,” Guzzone said.

The Senate Finance committee voted on the legislation on April 5 and it passed the full Senate on a 35-8 vote the following day. The 2024 session adjourned on April 8.

The legislation deals with a federal program called the 340B Drug Pricing Program. As a condition to participate in Medicaid, drug manufacturers are required to provide discounts on medications to certain qualifying hospitals that serve a high population of uninsured or underinsured patients to make those drugs more affordable.

The intention is for hospitals to charge uninsured or underinsured patients at a discounted rate or provide the medication at no cost to the patient.

In addition, hospitals under the 340B program can contract with pharmacies to extend the access for people who may not be able to travel to qualifying hospitals.

“When I started learning about this, from my point of view, it’s really about access and equity,” Guzzone said.

But a snag came up around 2020, when some big-name drug manufacturers restricted sales to hospitals that contracted with multiple pharmacies, denying the 340B discounts to those hospitals and reducing access to low-income patients.

Some drug manufacturers such as Eli Lilly restricted drug sales at 340B discounted prices if the hospital contracted with more than one pharmacy.

“Several of the large drug manufacturers… started to say ‘hey, qualified health centers, you can only contract with one pharmacy.’” Guzzone said about her bill. “So, this causes a problem primarily for the patients. The vast majority of patients are either uninsured or under insured, from low-income areas, probably working multiple jobs.”

“So its not going to be easy for them to get their medications, and they’re less likely going to be able to pay a full regular price for it,” she said.

Guzzone’s bill states that a drug manufacturer may not directly or indirectly restrict access to 340B drugs to a hospital that is under contract with pharmacies, in hope of prohibiting drug companies from continuing those practices.

“The main objective of the bill is to basically say ‘hey drug manufacturers, you can’t limit us to just one pharmacy,’” Guzzone said. With approval from the House and the Senate, the bill is off to Gov. Wes Moore’s desk for consideration.

Guzzone said that she notified the Moore administration about the bill in the final days of session, but has not had other conversations about the legislation with his team.

PhRMA, the trade group representing pharmaceutical companies, opposes the legislation. According to a PhRMA state-by-state breakout, there are 28 Maryland hospitals participating in the 340B program.

PhRMA argues that some hospitals participating in 340B pocket the profits instead of letting patients purchase discounted medications and that there is not enough oversight on the program.

“It’s disappointing some Maryland legislators are enabling hospitals, pharmacies and PBMs (Pharmacy benefit managers)  to take advantage of vulnerable patients. Concerns about lowering prescription drug costs for underserved patients should have been the priority rather than trading political blows,” according to Stami Williams, PhRMA spokesperson. “Instead, large hospitals, chain pharmacies and PBMs will continue to use the 340B program to profit handsomely at the expense of people who need assistance the most.”

The trade group says it supports the 340B program in general but would like to see reform legislation from Congress, rather than state efforts, to improve transparency, among other concerns.

The 340B program started in 1992 to “protect safety-net hospitals from escalating drug prices by allowing them to purchase outpatient drugs at a discount from manufacturers” and has gone through several changes since, according to the Association of American Medical Colleges.

There is a bipartisan interest in ensuring that the program has proper oversight and is working as intended. Some members of Congress are interested in improving the 340B program, including U.S. Ben Cardin (D-Md.).

In 2023, Cardin, two Democrat senators and three Republican senators sent a “Request for Information” letter to 340B stakeholders, saying that “while the program does not utilize federal taxpayer dollars, federal oversight is necessary to ensure the program functions as intended.”

“We are seeking information from stakeholders on bipartisan policy solutions that would ensure the program has stability and oversight to continue to achieve its original intention of serving eligible patients,” the letter continued.

Earlier this year, that same bipartisan group of six senators issued draft language for possible legislation to reform the 340B system.

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