Rhode Island House lights up to protect federal drug discount program from Big Pharma

Legislation to protect a federal drug discount program from drugmakers’ maneuvers passed the Rhode Island House of Representatives Wednesday. With more guardrails in place compared to the original draft submitted in April, the proposed shield drew few arrows during a floor debate.

After bill H5634A by Rep. Jon D. Brien, a Woonsocket independent, was introduced as item #10 on a 96-item-long docket, House Speaker K. Joseph Shekarchi looked at the array of glowing lights before him. Each one signaled a member of the House who wanted to speak. 

“I’ve got a lot of lights,” Shekarchi said.

Most of the lights ended up being in support of the bill, a pattern reflected in the 69-2 vote which secured the bill’s passage. Another 69-2 vote affirmed the Senate companion, S114A by Sen. Bridget Valverde, a North Kingstown Democrat. 

Reps. Nathan Biah and Ray Hull, both Providence Democrats, were the only ‘No’ votes.

“I was surprised that there was that much opposition,” Brien said in a conversation after the floor vote.

The bill aims to stop drug manufacturer discrimination against hospitals and health centers enrolled in the federal 340B Drug Pricing Program. 340B requires drugmakers to provide steep discounts on their products to program participants. Drugmakers absorb the discount, but insurers reimburse clinics and hospitals at full cost, and the savings can then be reinvested into patient care. 

In recent years, however, manufacturers have imposed restrictions on 340B participants that limit where prescriptions can be dispensed, especially those filled at contract pharmacies, like a patient’s local CVS or Walgreens, that fill prescriptions on a provider’s behalf. 

Manufacturers have tried to steer prescriptions to certain pharmacies, or limit the number of contract pharmacies a provider can use. But providers say these changes limit patient access, especially in more rural areas.

Rep. Susan Donovan, a Bristol Democrat who chairs the House Committee on Health and Human Services, said on the House floor that the legislation was tweaked to address numerous concerns that emerged earlier in the legislative session.

Who’s afraid of Big Pharma? Not the R.I. House’s lone independent

New in the amended version are requirements for 340B entities to submit annual reports detailing program savings and spending, including drug acquisition costs, payments to contract pharmacies, and details on how the money benefits patients. The bill also offers clearer definitions of contract pharmacies and pharmacy benefit managers. 

“We think we struck a good balance addressing the real needs and giving people access to their medications,” Donovan said.

Rep. Marie Hopkins, a Warwick Republican and co-sponsor of the bill, rose in support.

“The 340B program is sacrosanct,” she said. “It is a federal program. It is a needed program. It is a necessary program, and it is vital to the survival of our community health centers.”

Hull, who voted against the bill, offered the only firm rebuke. He cited longstanding concerns about transparency in the program, while acknowledging that the program benefits community health centers, which supporters rallied around as a major beneficiary of the legislation. 

“What actually is happening here is that the hospital systems are now gaming the system because they can,” Hull said, and added that pharmacies can establish locations in poor neighborhoods, but redirect those savings to richer neighborhoods. 

“All I’m asking for is some transparency,” Hull said.

The 340B program has been subject to scrutiny in recent years, and research has found that an absence of rigorous reporting standards can obscure the inner workings of providers’ 340B participation. That’s one of the reasons Minnesota installed oversight requirements in its 2023 legislation defending 340B providers.  

But Hull’s comments set off a chain reaction among supporters who rose to defend the bill, including Brien, who asked, “If the hospitals were truly gaming the system…why have hospitals lost over $259 million over the last three years here in the state of Rhode Island?”

After the floor vote, Brien cited Landmark Medical Center as an example of how the 340B program can stabilize struggling facilities

“Come to Landmark and take a look,” Brien said. “And you’re looking at a hospital that went from receivership to where we are today, with a cardiac center and a cancer center and a great maternity center and psychiatric services.”

The 340B program is also getting an additional boost in the fiscal 2026 budget, with a clause that proposes to use the state’s Executive Office of Health and Human Services to align itself with some of the same actions in Brien and Valverde’s bills, such as preventing manufacturer discrimination against contract pharmacies. The budget clause also asks for annual reports from 340B providers and oversight from the Auditor General.  

Brien told his colleagues on the House floor that the legislation, which had tripartisan support, “changed the way I look at everybody in this room.”

After the floor vote, he opined: “I guess the one thing I can say is: No one can say that the lone independent can’t get anything done.”

The Senate will need to pass Brien’s version of the bill for the legislation to proceed to Gov. Dan McKee’s desk.