ST. PAUL, Minn. — Today, the Minnesota Department of Health released a nation-leading report regarding the federal 340B Drug Pricing Program – The 340B Covered Entity Report. Senator Melissa H. Wiklund (DFL – Bloomington) applauds the Minnesota Department of Health’s work on the report and the participation rate from covered entities. As a result of legislation included in the 2023 Health and Human Services omnibus budget bill, this is the first time any state has been able to glimpse into the 340B program’s impact on its health care system. The report finds that the federal 340B Drug Pricing Program provides substantial subsidies to many health care providers across Minnesota who qualify to participate in the program.
“Today’s report highlights the importance of transparency in our health care system,” said Senator Wiklund, Chair of the Senate Health and Human Services Committee. “It will be critical for us to take time to understand this report’s full implications. The report sheds new light on the complex web of funding streams supporting our health care system, which make it more difficult to identify and implement needed reforms at the state level. I look forward to working with Minnesota’s health care experts as we analyze the information and determine our next steps.”
The federal 340B Drug Pricing Program allows qualifying hospitals and clinics to buy certain prescription drugs at a significant discount. The program is intended to help safety-net health care providers stretch their financial resources to provide care for low-income patients. There are no federal requirements for 340B providers regarding how they use the revenue gained from the program, and the extent to which the program improves access to care for patients remains unclear. There is also uneven distribution of the revenue between providers, with more money flowing to larger entities.
“During my time on the Health and Human Services Committee, hospital budgets and margins have been a frequent topic of discussion. As we seek to improve access to care, lawmakers can now consider a more holistic picture of the funding sources and ask better questions of our providers. Importantly, we must dig deeper into these findings to understand how 340B discounts are used by different types of providers, many of whom do not see significant net revenue from the program, according to the report. This nuance is important as we seek to understand how this program benefits Minnesotans.”
Notably, the report’s data are incomplete and likely represent a significant undercount. Several entities did not report information for office-administered drugs, such as chemotherapy infusions. The 2024 340B Covered Entity Report highlights that there are substantial costs of administering these “specialty drugs,” asserting the current report does not represent the full landscape of net 340B revenue in Minnesota. The legislature clarified reporting requirements during the 2024 legislative session, so the 2025 report should provide a more comprehensive picture of 340B drug pricing reimbursements.
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