340B State Legislation: Washington
Overview
Washington State lawmakers are weighing H.B. 2145 and S.B. 5981, which would expand the 340B program and intensify the program’s negative effects on employers and working families.
The 340B program allows participating hospitals to purchase prescription drugs at steep discounts, then charge plan sponsors the prevailing rate. While hospitals can retain the difference, there are few clear requirements to ensure those dollars directly benefit vulnerable patients in local communities. In practice, the program can distort incentives by rewarding higher drug markups, encouraging consolidation, and steering prescribing toward higher-priced medications instead of lower-cost biosimilars.
As hospitals shift more drug volume into the 340B program, manufacturer rebates that would have otherwise helped offset healthcare costs and reduce premiums are displaced. These lost rebates, combined with the “buy low, bill high” structure, shift savings away from the employers and working families while increasing overall system costs.
Analyses indicate the proposal could raise employer costs by about $11 per beneficiary, totaling roughly $43.5 million annually for Washington employers.
The National Alliance urges policymakers to prioritize reforms that strengthen oversight and accountability before considering measures that further accelerate 340B growth.
340B Employer Resources
Explore the resources below to learn more about how 340B, and the legislation under consideration, could affect Washington employers, unions, and working families.
340B Raises Healthcare Costs for Washington Businesses:
Learn more about how proposed 340B legislation could impact employers, unions, and working families across Washington.
The Impact of Proposed Legislation on WA Working Families
Read Shawn Gremminger’s testimony to the Health and Wellness Committee outlining employers’ concerns about the proposed legislation and its potential effects on working families.
