October 20, 2026
The Honorable Bill Sutton, Chairman
The Honorable Beverly Gossage, Vice Chairman
Special Committee on 340B Program
Kansas State Legislature
10th and Jackson
Topeka, Kansas 66612
Dear Chairman Sutton, Vice Chairman Gossage, and Members of the Special Committee on 340B Program,
My name is Leah Vukmir, and I am the senior vice president of state affairs for National Taxpayers Union, America’s oldest taxpayer advocacy organization. I am also a former pediatric nurse practitioner who worked with patients who benefited from the 340B drug pricing program. Prior to joining NTU, I served as a state senator in the Wisconsin state legislature.
From these three distinct lenses, I look at the 340B drug pricing program, and I thank you for the opportunity to share my insights with you today.
As you all know, the 340B drug pricing program was created in 1992 to help low-income and uninsured patients access affordable medications. The law requires pharmaceutical companies to sell certain outpatient drugs to eligible providers at a steep discount. The intent was for providers to pass the savings on to patients.
As with many federal programs, they begin with good intentions that often fall short because they lack clear guidelines to support the law's original intent. According to the U.S. GAO, the 340B drug pricing program “does not specify how drug discount revenue is to be used or whether discounts are to be passed on to patients.”
Due to Congress’ lack of clear expectations and guidelines, the 340B program has become an opaque revenue stream for hospitals and pharmacies, with little accountability to ensure savings benefit patients and taxpayers. The result is two-fold: patients lose, and taxpayers lose. The only winners are hospitals that turn 340B into a profit center by receiving reimbursements from insurers for discounted drugs at a higher price, with no requirement to show that the savings are used to reduce patient costs.
Why is this a concern for you as state lawmakers? Well, if I were to be completely honest, this should not be a concern for the state legislature. Congress failed by drafting ambiguous language in a federal law, and Congress needs to make the necessary changes to the program to avoid the unintended consequences of money shifting to hospitals rather than patients in need. Congress and the Administration are currently working on a fix to the federal program
In the meantime, many states are dabbling in the federal 340B drug program by expanding the number of covered entities that provide the discounted drugs. Any attempt to do so will only exacerbate the problems in the federal program and ensure that your state’s patients and taxpayers will not benefit from the 340B drug discounts. Instead, more hospitals and covered entities will benefit. Worse, any changes in state law you may enact will only codify the worst aspects of the federal law, forcing you to change state law when the federal law is fixed.
So why does this matter? How does expanding the program in Kansas hurt taxpayers? State taxpayers fund state employee health programs and the state’s Medicaid program. The lack of accountability and transparency directly affects these programs’ bottom line. With state and Medicaid budgets continually being strained, it would be helpful to know where the discount savings are flowing.
Two real examples that will highlight the extent to which the program is being abused and patients and taxpayers are being hurt:
- A report released by the North Carolina state treasurer found hospitals in the state charging cancer patients five times the actual drug cost, and as a result, patients were overwhelmed by bills and taxpayers were saddled with a $2 billion unfunded liability in the State Health Plan.
- The Minnesota Department of Health reported that 340B hospitals generated at least $630 million in net revenue, with little transparency as to whether low-income patients actually benefited.
Rather than expand the 340B Drug Pricing Program to more entities, the Kansas Legislature ought to support measures to increase transparency and accountability for participating pharmacies and hospitals—including those operating in your state health plan—and to share this information with members of your federal delegation. The 340B Drug Pricing Program is a federal program, and care should be taken not to codify state law to include aspects of a poorly designed federal program. Indeed, NTU is among many organizations that have advocated reforms to 340B through Congress.
Please do not hesitate to contact me if you have further questions or concerns.
Respectfully submitted,
Leah Vukmir
Senior Vice President of State Affairs
National Taxpayers Union
lvukmir@ntu.org