Bill co-sponsors Reps. Gina Johnsen (R-Lake Odessa) and Alabas Farhat (D-Dearborn) are urging their legislative colleagues to support House Bill 5350, a bill to prioritize supporting hospital community need programs over pharmaceutical manufacturer profits. They represent two of the 19 bipartisan co-sponsors of the bill.

The bill would protect healthcare cost-savings received by hospitals through the federal 340B drug pricing program, which allows covered safety net hospitals and other community care organizations to access certain outpatient prescription drugs at discounted prices. Numerous pharmaceutical manufacturers have attempted to place arbitrary limits on hospitals that have been ruled unlawful by federal agencies.

“During the final days of session, we have the opportunity to prioritize people’s needs ahead of big pharma’s profits,” Farhat said. “This bipartisan plan has the potential to expand and protect life-saving services in hospitals across our state. Services such as cancer care, prevention, and treatment.”

“The cost savings offered by 340B is vital for small rural hospitals like those in the area I represent,” said Johnsen. “Protecting this program is crucial to maintaining access to care for my constituents. We will lose services if it goes away, and rural Michigan cannot afford that.”

The 340B drug pricing program, created by Congress, has been an integral part of the fabric of healthcare financing since its inception in 1992 and does not rely on taxpayer dollars. Covered safety net providers have been able to drive savings from the program into their communities for more than 30 years, supporting access to care to Michigan’s most vulnerable patients.

“We thank Rep. Farhat for being a champion for our patients. This legislation will have a meaningful impact for Dearborn and all of Michigan,” said Debra Guido-Allen, president of Corewell Health Dearborn Hospital. “As a safety net hospital, the 340B program is a lifeline for affordable medicines as drug makers continue to target this vital program through lawsuits and restrictions, while also raising their prices.”

The 340B drug pricing program was designed to support the healthcare providers who serve patients in the most vulnerable communities with the ability to stretch scarce state and federal resources. Covered entities include cancer hospitals, children’s hospitals, community health centers and specialty clinics, rural referral centers and sole community hospitals.

“340B savings are incredibly important for the viability of rural healthcare providers,” said Margaret Dimond, regional president of University of Michigan Health, which includes hospitals in Carson City and Ionia. “We appreciate Rep. Johnsen championing this cause and protecting rural healthcare in our community, and we are proud to provide access to care for underserved communities and to share how we are using our 340B funding.”

Pharmaceutical drugs are the most rapidly growing expense for hospitals. As major purchasers of drugs, hospitals are forced to bear a significant burden of the rising costs. For the first time in history, the median price of a new drug is $300,000 – more than four times the median annual household income in the U.S. The costs for new drugs launched by pharmaceutical companies rose by 35% from 2022 to 2023.

HB 5350 is awaiting consideration in the House Insurance and Financial Services Committee.

The bill sponsors encourage Michigan citizens to contact their state elected officials to encourage them to support HB 5350 and prioritize community-based healthcare services over pharmaceutical profits.

###