MICHIGAN VOTE ALERT: Oppose Efforts to Expand 340B

Americans for Tax Reform strongly urges all Michigan Senators to oppose SB 1179, legislation to expand the second largest federal drug program: 340B. Expanding 340B would result in taxpayers footing the bill against costly lawsuits as well as a number of unintended negative consequences for patients across Michigan. 

The biopharmaceutical industry is already one of the most heavily regulated industries in the United States. The Food and Drug Administration (FDA) approval process for new drugs often takes more than a decade to complete and can cost upwards of $2.5 billion, creating significant delays and expenses in bringing life-saving treatments to market. 

While 340B was originally designed to help hospitals serve vulnerable populations, this is not the reality. Rather than directing the savings towards patient care, hospitals use 340B to buy drugs at discounted prices and then bill significantly higher amounts to patients with commercial and employer-based insurance. This system has led to inflated healthcare costs for both patients and their employers while also serving as a giveaway to pharmacy benefit managers, who negotiate deals with hospitals to secure greater profits from discounted prices. 

The continuous expansion of 340B well beyond its original intentions would leave manufacturers with even fewer resources available to invest in research and development for the next generation of lifesaving, life-improving medications. This change would jeopardize pharmaceutical innovation and lessen access to current medicines, leaving the people of Michigan with even fewer, lower quality choices. In the long term, expansion of 340B will actually lead to higher healthcare costs for Michiganders. 

Additionally, ongoing litigation is already pending in two other states that have passed similar legislation. Expanding 340B before there is a judgment on those other lawsuits would likely result in the hardworking people of Michigan footing the bill against similar lawsuits. 

Americans for Tax Reform strongly opposes efforts to expand 340B and urges all Michigan senators to vote no on SB 1179.