01-05-2025
Who's afraid of Big Pharma? Not the R.I. House's lone independent
Rep. Jon D. Brien, a Woonsocket independent, is seen on the floor of the Rhode Island House of Representatives on April 29, 2025, waiting for the day's session to begin. (Photo by Alexander Castro/Rhode Island Current)
When Big Pharma lobbyists came to the Rhode Island State House April 10 to oppose legislation that would hurt drugmakers' profits, Woonsocket independent Rep. Jon D. Brien was ready for them.
Brien, the sole independent in the 75 seats of the House of Representatives, was there to introduce his bill that would shield a federal drug pricing mandate from manufacturer intervention.
'They've come from far away to tell you, 'The sky shall fall in the state of Rhode Island if you pass this legislation,'' Brien told the House Committee on Health and Human Services. 'And I assure you … it will not.'
H5634 aims to stop drugmakers and pharmacy benefit managers (PBMs) from controlling patient access to discounted prescription drugs under the 340B Drug Pricing Program. Congress created the program in 1992 to help safety net clinics and hospitals 'stretch scarce federal resources as far as possible,' according to program overseer, the U.S. Health Resources and Services Administration (HRSA).
Under 340B, providers buy drugs from manufacturers or wholesalers at a federally set minimum discount of 23.1% off the average retail price, although the discount for providers is typically 25% to 50%. Providers are then reimbursed for the drug's standard price by insurers, and the clinic's savings are reinvested in more patient services.
The feds don't pay the difference — the manufacturer eats the discount. Drugmakers continue to participate so they can have their drugs covered by Medicaid and Medicare, but some have recently tried to block providers from contracting with multiple pharmacies to fill 340B prescriptions. Outsourcing dispensing, manufacturers argue, is the latest example of how providers are profiting off a system designed to reduce customer costs for outpatient drugs.
'This legislature needs to fight back,' Brien told the committee. 'Pharmacy benefit managers, insurers and drug manufacturers are bleeding our safety net providers dry with discriminatory, profit-driven tactics. They're slashing reimbursements, clawing back funds, and steering prescriptions to their own pharmacies, crippling health centers and hospitals that serve our most vulnerable residents.'
When Rhode Island Current caught up with Brien a week later, he remained firm on his bill's importance for protecting Rhode Islanders.
'Who are we going to prioritize this legislative session: Big Pharma or the people of Rhode Island?' Brien asked. 'It'll be hard to go back to them and tell them why this didn't pass, because I sure as hell am not going to sugarcoat it if it doesn't.'
He was glad to see testimony supporting the legislation far outweigh opposition at the hearing. The bill was held for further study, which happens to every bill upon its debut. But what makes Brien's bill unique is the list of strange bedfellows backing it. Co-sponsors include two Republicans, Reps. Marie Hopkins of Warwick and David Place of Burrillville, and two Democrats, Reps. Megan Cotter of Exeter and Jacquelyn Baginski of Cranston — a rare show of tripartisan teamwork.
'Without question, the most consensus building piece of legislation that I've ever submitted,' Brien tweeted about the bill on April 29.
Brien, who sports an image of Tulsi Gabbard being sworn in as director of national intelligence as his X header, won his House District 49 seat in 2022. Like Gabbard, Brien was once a Democrat. An attorney who specializes in personal injury, criminal defense, DUIs and expungements, Brien held the Rhode Island House District 50 seat from 2007 to 2013 when he lived in Woonsocket's Globe District, before moving to the city's North End. (The District 50 seat now belongs to Democratic Rep. Stephen Casey.)
'We are all of vast and varying ideologies, but we all believe the same thing,' Brien said over the phone. 'And the same thing is we got to get this bill passed.'
Last year, Brien introduced the same legislation, which died in committee. It's why Cotter, whose western, rural Rhode Island district spans 100 square miles of Richmond and most of Exeter, sought him out this year. Brien's bill, she said, could help local health clinics survive, especially those in the state's rural and underserved areas.
'This bill could be the difference between some of them staying open and some of closing,' Cotter said.
Across the rotunda, however, the Senate version of the bill remains firmly partisan. S0114, sponsored by Democratic Sen. Bridget Valverde of North Kingstown alongside seven Democrats, most of them progressives, was held for further study after its hearing on March 20.
Brien's fight for 340B comes from his own backyard. Thundermist Health Center in downtown Woonsocket in Brien's district is a federally qualified health center which serves over 63,000 patients annually, including low-income and uninsured people, and it participates in the 340B program. It then reinvests the savings into other services, like an onsite food bank.
Last year, Thundermist had to lay off 130 workers and eliminate its tobacco cessation program after losing roughly $5.6 million in 340B revenue, Matthew Roman, the center's chief operating officer, told the House committee. The loss came even after Thundermist worked with a national firm to recover maximum revenue from the program.
Thundermist staff said the patient experience has been affected by moves by manufacturers to refuse or heavily limit shipments of 340B discounted products to multiple pharmacies — a not uncommon request for providers, who will contract with multiple pharmacies so patients can fill their medicines closer to home. Some Thundermist patients now have to visit different pharmacies depending on which manufacturer made their medication, Chris Durigan, the health center's director of clinical pharmacy services, told lawmakers at the hearing.
Peter Bancroft, CEO of WellOne Primary Medical and Dental Care which has four locations in Rhode Island, shared a similar story. About a year and a half ago, WellOne used to subsidize about 40,000 $5 prescriptions monthly in its discount program. Now, the center is writing around 10,000 of those prescriptions a month, because of manufacturer restrictions that steer the discounted drugs toward one pharmacy.
'We had to pick one that was quote, unquote 'centralized,'' Bancroft said. 'Well, if you think there's a central pharmacy between Burrillville and North Kingstown and Scituate and Foster. We ended up going to the pharmacy in Chepachet. Our patients from North Kingstown are not driving to Chepachet to get their $5 prescription.'
Other community health clinics offered testimony in support of Brien's and Valverde's bills. Providence Community Health Centers lost $9 million in 340B revenue in four years. WellOne faces a $2.1 million deficit in fiscal year 2025, with $1.7 million tied directly to lost 340B earnings. Wood River Health, which has three locations across the state, reported a $1 million loss in revenue over two years.
CharterCARE doesn't yet benefit from 340B at its for-profit, safety net hospitals, but it wants the program intact as its properties — Our Lady of Fatima Hospital in North Providence and Roger Williams Medical Center in Providence — transition to nonprofit, 340B-eligible status after a protracted but soon-to-be-concluded change in ownership. Jeffrey Dandurand, the health system's pharmacy director, submitted written testimony that 'a key aspect of our strategic transition plan…is dependent on participation in the 340B program.'
The Hospital Association of Rhode Island supports the legislation and submitted written testimony, and the town of Burrillville passed a resolution in support.
Pharmaceutical manufacturers, however, are unhappy with the use of contract pharmacies, which can be any third-party drugstore including chains like CVS and Walgreens. In 2010, HRSA allowed providers to use unlimited contract pharmacies, fostering abundant growth. Since then, the number of contract pharmacies has grown 12,000%, and there were more than 200,000 contract pharmacy agreements inked between 2013 and 2024 — numbers that come from a report funded by PhRMA, a major pharmaceutical lobbying and trade group.
Brien's Republican co-sponsors on the House health committee were unmoved by the arguments of Brian Jordan, a lobbyist for PhRMA, that the root issue of 340B's problems 'always goes back to low Medicaid reimbursement.'
'It almost sounds like you just don't like the program, and you're trying to restrict the program as much as possible,' said Rep. David Place of Burrillville.
First-term Rep. Marie Hopkins of Warwick dug into Jordan's assertion that facilities are using 340B for profit. These are places already operating on 'shoestring' budgets, she offered, and 340B is a way to recoup costs.
'It's not how the program was originally intended,' Jordan said. 'I mean, it's a revenue source. Why not increase the sales tax, something like that?'
'When I go to the mechanic, and I pay the $299 for tires, I know that he got them for $100,' Hopkins said. 'But there is a cost associated with his providing the service. That's how business works. I see this the same way, and you're trying to scoop out their revenue source.'
Hopkins' arguments echoed those of hospital trade groups, like a 2024 American Hospital Association report that cited a $30 billion growth in the 340B program over five years, while the drug market grew $330 billion in that same time. Other sources like the Drug Channels Institute analyzed HRSA data to show that the 340B program grew $12.6 billion in a single year, accounting for $66 billion overall revenue in 2023.
'Everyone in the drug channel — hospitals, federal grantees, PBMs, pharmacies, plan sponsors, employers, insurers, wholesalers, technology vendors, consultants, and more — profits from the billions of 340B dollars that are sloshing around the system,' the institute's founder Adam J. Fein wrote in 2024.
PhRMA's Jordan and Rep. Hopkins did agree there should be more rigorous oversight of 340B. As drafted, the Rhode Island legislation does not permit audits beyond those already performed by the federal government. Cara Sammartino, an associate professor at Johnson & Wales who chairs the school's public health program, urged lawmakers in written testimony to strike that clause, as vagueness in federal audit laws allows 340B entities to audit themselves or hire contractors to do it.
'When I go to the mechanic, and I pay the $299 for tires, I know that he got them for $100. But there is a cost associated with his providing the service. That's how business works. I see this the same way, and you're trying to scoop out their revenue source.
– Rep. Marie Hopkins, a Warwick Republican, to a pharmaceutical lobbyist a House committee hearing
Brien told Rhode Island Current the idea that 340B providers aren't audited is an industry 'red herring…All the legislation says is that these institutions can't be audited more than the federal government requires them to be.'
In 2023, Minnesota became the first state to require annual reporting from 340B entities. A 2024 report found that 13% of providers — mostly large hospitals — earned 80% of 340B revenue, while safety net clinics earned the least. Meanwhile, $120 million went to contract pharmacies and third-party administrators, echoing drugmakers' assertions that the program is lucrative.
Similarly, a 2021 white paper by the Schaeffer Institute for Public Policy & Government Service found that hospitals represented 60% of 340B sites in 2020. Unlike non-hospital entities covered by the program, 340B hospitals 'are not required to use 340B savings to serve vulnerable populations, nor are they required to report how 340B revenues are used,' according to the report.
Johns Hopkins University Professor of Accounting Ge Bai wrote in a 2023 testimony before a U.S. Congressional subcommittee that 'many tax-exempt hospitals have been deviating from their original charitable pursuits to focus on expanding their market share and enhancing profitability,' a motive that also includes 340B, since 'eligible tax-exempt hospitals…can generate substantial profits by providing these drugs to well insured patients,' Bai wrote.
Asked about the Rhode Island bill, Bai said over email, 'The bill, if passed, would represent a win for 340B hospitals in RI and a loss for pharmaceutical companies.'
But, she added, 'the scale of the 340B program has been ballooning.' She pointed to an April 15 executive order from President Donald Trump likely to affect the program by requiring greater oversight and regulation of Medicare and Medicaid payments for drugs.
Brien and Valverde want Rhode Island to follow in the footsteps of 33 states that have passed laws to defend contract pharmacy use or prohibit PBM discrimination against 340B entities. The legislation has invoked both specific legal challenges and broader ones. Judges in the D.C. and Third Circuits ruled that the 340B statute says nothing about where or how drugs must be dispensed — ultimately a blow against contract pharmacies.
Conversely, it seemed as if the U.S. Department of Health and Human Services would resume the course set for HRSA under the Biden administration when, in March, HRSA continued litigation over drugmakers' Medicaid contracts if they offered alternative rebates in violation of 340B. An HHS spokesperson said via email that the agency does not comment on ongoing litigation, and would not provide an on-record comment about the future of the 340B program.
States have already been sued for trying to enshrine 340B protections, Brien said at the hearing, and some emerged victorious. The possibility of defeat in court was not enough to deter Brien. He cited lawsuits against proposals for truck tolls and high-capacity magazine bans filed before the relevant bills even hit the House or Senate floor.
Brien asked his colleagues: 'Since when does this institution not pass legislation for fear of a lawsuit?'
Over the phone, Brien remained hopeful.
'I intend to do a full court press on this thing. It's my number one priority. It's the number one priority of a number of legislators,' he said. 'It comes down to, 'Will leadership stand with Big Pharma or the people of Rhode Island?''
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