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6/20/2025
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Assembly protects 340B discount prescription program
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 STATE HOUSE – The General Assembly today approved legislation sponsored by Sen. Bridget Valverde and Rep. Jon D. Brien to protect a critical discount pharmaceutical program that enables safety-net hospitals, clinics and other health care agencies to provide care to the most vulnerable Rhode Islanders. The bill now goes to the governor.
The legislation (2025-S 0114Aaa, 2025-H 5634Aaa) prohibits insurers, pharmacy benefits managers and other payors from engaging in discriminatory practices against community hospitals, clinics and other health care provider agencies that purchase prescriptions through the federal 340B discount program.
Under the federal 340B program, in order to have a drug qualify for coverage by Medicaid and Medicare Part B, drug manufacturers must enter a pharmaceutical pricing agreement that discounts the drug for 340B-qualified agencies — community health centers, safety-net hospitals and rural clinics that serve a high percentage of poor and uninsured patients. Those agencies purchase the medications at reduced prices and reinvest those savings into direct patient care — providing services such as primary care, behavioral health, dental services and addiction treatment to tens of thousands of Rhode Islanders who would otherwise not be able to afford them.
But in recent years, some pharmaceutical companies and pharmacy benefit managers (PBMs) have undermined the intent of the program by reimbursing 340B-particpating agencies less, thereby reducing or eliminating the funding that the program is supposed to generate for patient services.
The legislation would prohibit that practice, as well as other discriminatory practices such as requiring the drugs to come from a particular pharmacy or placing any other restrictions solely on 340B entities.
“These discriminatory tactics are an assault on the health care system, and in particular on the programs that provide lifesaving services to people who can least afford health care,” said Representative Brien (I-Dist. 49, Woonsocket, North Smithfield), who noted that his city’s Thundermist Health Center and Landmark Medical Center are both 340B entities that serve thousands every year. “We must close the loopholes that allow this abuse to prevent our safety-net programs from being bled dry, leaving Rhode Islanders without the care they need.”
Said Senator Valverde (D-Dist. 35, North Kingstown, East Greenwich, South Kingstown), “The drug manufacturers and PBMs that have started reimbursing 340B entities at lower rates are undermining the program’s purpose and significantly harming those agencies’ ability to provide health services to those who can least afford them. We’re seeing the damage in Rhode Island; last month, Providence Community Health Centers announced it will have to lay off 70 employees in part because of lower reimbursement rates for 340B drugs. The integrity of this program is vital for protecting our community health centers and safety-net hospitals so they can continue to help the most vulnerable Rhode Islanders.”
Providence Community Health Centers, the state’s largest community health center, announced in May it would lay off 70 staff members due to low Medicaid reimbursements and a $9 million loss in 340B funding over the last three years.
“Rhode Island’s eight community health centers applaud Senator Valverde and Representative Brien for their leadership in sponsoring this very important bill and thank the General Assembly for its passage. The 340B program is a vital funding source for community health centers. This legislation protects the 340B program, ensuring community health centers can continue to provide all Rhode Islanders access to affordable medications and comprehensive health care services,” said Elena Nicolella, president and CEO of the Rhode Island Health Center Association.
The legislation, which takes effect Oct. 1, was amended from its original form to require every participating entity in Rhode Island to file annual reports with financial information about its use of the program. The reports would include information about their costs for obtaining drugs through the 340B program, the aggregated amount they received for dispensing or administering them, the names of vendors and contract pharmacies providing services related to their 340B activities and the ways in which they invested their savings from the program to benefit patients or the community. The bill also authorizes the state auditor general to investigate complaints and take action concerning compliance.
Said Lisa Tomasso, senior vice president of the Hospital Association of Rhode Island, “We applaud the General Assembly for advancing this critical legislation to protect the 340B program and the patients it serves. By prohibiting discriminatory practices by pharmaceutical manufacturers, insurers and PBMs, the bill safeguards the integrity of the 340B program and ensures that safety-net hospitals and health centers can continue delivering vital services in underserved communities. This is a meaningful win for patients, providers and the health care system as a whole.”
For more information, contact:
Meredyth R. Whitty, Publicist
State House Room 20
Providence, RI 02903
(401) 222-1923
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