SB 533 Protects drug price fixing

340B drugs are outpatient prescription medications that are provided to eligible covered entities at significantly reduced prices under the 340B Drug Pricing Program. Covered entities can dispense these discounted drugs to uninsured patients, as well as those covered by Medicare or private insurance. In cases where the covered entity treats an insured patient with discounted medication, the federal government or the patient’s private insurance typically reimburses the entity for the full price of the medication, allowing the entity to retain the difference between the reduced price and the full amount reimbursed. The program’s growth has been significant, with the number of covered entity sites increasing from 8,100 in 2000 to 50,000 by 2020.

SB 533 Protects drug price fixing. Covered entities, such as hospitals and their off-campus facilities, have a competitive advantage as they can purchase drugs at a 20-50% discount through their 340B status, while imposing markups on the reimbursement they submit to private insurance. This program protects the racket that is keeping drug prices high.