May 31, 2024
Momentum Continues in States on Contract Pharmacy Access
While Lowball Tactics Persist and Have Some Impact, Many States March Forward
By Ted Slafsky
In last month’s column, I wrote about a reprehensible campaign by 340B opponents to tie this critically important drug discount program to the contentious issue of immigration. A dark money campaign started to pour money into red states to try to stall the effort to restore access to 340B discounts in the contract pharmacy setting.
As I said last month, it would be tempting to ignore or dismiss the effort as a cynical or even laughable stretch to tie the 340B program to the immigration matter, but unfortunately the strategy actually has been somewhat effective. In my own state of Virginia, Governor Glenn Youngkin (R) caved into pressure by dark money groups to kill a contract pharmacy access bill that had unanimously passed the Virginia Senate and cleared the House by 95-3 margin. Both chambers are narrowly divided by party so there should be no question that any bill that makes it through the legislature by such margins should be signed by the governor.
However, soon after the legislature passed the bill, a dark money group that most recently had orchestrated a pro-tobacco campaign effort released an advertising and media outreach campaign to pressure Gov. Youngkin to veto or stall passage of the bill. As we first reported in 340B Report, a 501(c)(4) non-profit calling itself Building America’s Future (BAF) released an ad titled “Healthcare for Illegal Immigrants.”
In an ominous tone, with video images of activity allegedly being conducted by immigrants lacking permanent legal status, the announcer says: “The border is broken. Millions illegally pouring into our country. But it’s not just the border: Your tax dollars are at work for illegal immigrants. The more we look, the more we find…And free healthcare? They’re using a program currently under investigation called 340B to launder your money and provide free healthcare for illegal immigrants. The more we look, the more we find. We need Republicans to stand up for us.”
Days later, more stories were published in conservative news outlets specifically targeting Gov. Youngkin (R-VA), warning him that “GOP voters in Virginia now say they will hold Gov. Youngkin responsible if a bill like S.B. 119 is signed into law.”
Soon after, Youngkin announced he would amend the bill so it would be delayed by a year and require the legislature to vote again on the measure. The amendment also would have established a commission made up of drug manufacturers, health plans, health centers, pharmacists and consumers to study a host of issues including “whether the current 340B program includes a risk of Medicaid dollars going toward non-Medicaid eligible populations.”
When 340B Report asked for comment on the amendment, the governor’s spokesperson said he “is deeply concerned about the federal 340B program and how it could be exploited to provide taxpayer subsidized healthcare to illegal immigrants.” Suddenly, a bill that had passed the Senate unanimously and the House by a huge margin was sent back to the legislature for further action. The Senate rejected the governor’s amendment on a party line vote with all Democrats supporting enactment of the contract pharmacy protections and all Republicans backing the governor’s amendment.
Under the state legislative rules, the ball was now back in the governor’s court and on May 20th he ignored the state Senate’s effort to overturn his amendment and proceeded with vetoing the bill, effectively killing the legislation at least for 2024. Tracy Douglas, CEO of the Virginia Community Health Center Association (VCHA), told 340B Report that her organization is “deeply disappointed” by Youngkin’s “unconscionable” decision to veto the legislation.
After Gov. Youngkin’s move to stall the legislation, BAF ran a new ad urging Republican leaders in Kansas, Mississippi and Missouri to “follow Youngkin’s lead” and reject 340B legislation. Soon enough, the Kansas legislature reversed course and decided to delay its own contract pharmacy access legislation that had easily passed the legislature just two week earlier. The legislature narrowly passed a bill that would prevent enactment of a contract pharmacy protection law until the U.S. Supreme Court decides on the matter. Now, of course, we have no idea if the Supreme Court will ever take up the issue which has already been decided in favor of the state of Arkansas—the first state to pass a contract pharmacy protection law—at both the federal district and appeals court levels.
Fortunately, Kansas Gov. Laura Kelly (D) did not fall for this tactic. On May 16, she vetoed the delay and, as of now, it is set to go into effect on July 1. State health care advocates fear that the drug industry will try to convince the legislature to once again delay the measure during a special session that may occur this summer to address tax legislation. But for now, the Kansas contract pharmacy protections look to be moving forward.
Many Lawmakers Stay Strong
Fortunately, not all Republican lawmakers are falling for the scare tactics being used by 340B opponents. Despite the negative ad campaign and heavy lobbying by the drug industry, Mississippi and West Virginia lawmakers easily passed contract pharmacy bills that were soon signed into law by their respective GOP governors.
Additionally, Missouri legislators refused to back down despite efforts trying to tie 340B to the immigration matter as well as to abortion politics. The Missouri Scout, a news service covering local politics, wrote about Senate Majority Floor Leader Cindy O’Laughlin (R) challenging 340B critics in a Facebook post and expressing strong support for the bill. Days before a final vote, she criticized the pharmaceutical industry for making an “astronomical profit.” “This last-minute effort to kill the bill is nothing more than greed. Pure and simple,” she said.
As Missouri state Senator Justin Brown (R) aptly put it to his fellow lawmakers, “This program has been important to the financial viability of many of our rural providers. In the past decade, 10 (Missouri) hospitals have closed and many others have operated a loss. My legislation can mean the difference between whether or not a hospital stays open or closes.” On May 17th, the final day of Missouri’s legislative session, the Missouri House voted, 133-18 to pass the contract pharmacy bill that had already easily passed the Missouri Senate. It is now headed to Gov. Mike Parsons (R) who has until June 2 to act on the bill.
Nonetheless, 340B opponents have not given up and are employing new tactics to threaten Republican lawmakers. As 340B Report first reported, a new Super PAC has emerged called “Stand for Us.” The group, which has connections with the dark money group running 340B-immigration messaging and a public relations firm in Washington, D.C involved in the effort, is claiming credit for the May 14 primary loss of West Virginia Senate President Craig Blair (R).
Stand for Us spent over $400,000 on messaging that attacked Blair primarily over his support for the 340B program, which the PAC described as a “federal program that uses taxpayer dollars to subsidize health care for illegal immigrants,” according to a May 15 memo outlining the group’s strategy. The PAC also targeted his opposition to legislation to ban medical interventions for gender-affirming care for minors in the state.
The group, which has the same high-profile spokesperson as Building America’s Future, warns: “Republicans are now on notice that they support 340B or non-citizen voting at their own political peril.”
Claims of Success Disputed
Interestingly, Senate President Blair did not lead the effort to enact the 340B protection legislation and West Virginia political experts point out that he had been subject to a highly publicized ethics scandal over allegedly overbilling the state for work and travel expenses. In addition, Blair was one of several lawmakers to lose election in a particularly volatile year for incumbents. Therefore, the Super PAC’s efforts may not have had any effect. In addition, Gov. Jim Justice (R), who signed the 340B law, easily won his primary bid for the U.S. Senate.
While the efforts to undermine the 340B program have had mixed success at best, it is an important reminder for 340B stakeholders to work very closely with your state and federal representatives to counter these unfortunate attacks on this vital program. Staying engaged and being proactive is more important than ever.
