(July 2024) – Kansas hospitals play an essential role in the Kansas health care delivery system. For instance, there were more than 264,000 discharges in the 122 Kansas community hospitals in 2023. Kansas hospitals are committed to providing compassionate health care to all Kansans. While firm on that commitment, many challenges are starting to test every hospital's ability to maintain that promise.
It is well documented that Kansas hospitals, especially those in rural areas, are financially struggling. A recent study by the Center for Healthcare Quality and Payment Reform suggests that nearly 700 rural hospitals across the country are at risk of closure. Unfortunately, Kansas ranks second in the country with the number of at-risk hospitals (57), only trailing Texas (77). The causes of the financial struggles are multi-faceted and include soaring labor and supply costs, growing uninsured rates, stagnant reimbursement and reductions in important programs such as the 340B Drug Discount Program.
The 340B Drug Discount Program, started in 1992, requires drug manufacturers participating in the Medicaid program to offer discounted drugs to certain hospitals and federally qualified health centers. In Kansas, 94 hospitals participate in the 340B Drug Discount Program, of which 84 are small, rural hospitals. Congress created the program in 1992 to extend to safety-net providers the same kind of relief from high drug costs that Congress provided to the Medicaid program with the Medicaid rebate law, allowing these providers to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."
Unfortunately, drug manufacturers have recently started decimating the 340B Drug Discount Program by limiting the number of pharmacies a hospital may contract with. These actions are jeopardizing Kansans' ability to access needed prescriptions and other vital health services.
Fortunately, Kansas lawmakers recognized the drug manufacturers' harmful actions and have appropriately responded to ensure the further reduction of the 340B Drug Discount Program is paused. During the recent 2024 Kansas legislative session, the Kansas Legislature approved a budget proviso requiring drug manufacturers to honor 340B pricing at contract pharmacies under the Consumer Protection Act of Kansas. Kansas hospitals appreciate Governor Laura Kelly's and the legislature's actions in supporting their local hospitals, federally qualified health centers and independent pharmacies from the profit-padding drug manufacturers. Keeping programs like the 340B Drug Discount Program intact will benefit our Kansas health care system and Kansans.
On July 1, 2024, pharmaceutical companies Abbvie and AstraZeneca filed separate lawsuits against Kansas Attorney General Kris Kobach over the 340B protections passed during the 2024 Kansas legislative session. The lawsuits seek to prohibit Attorney General Kobach from enforcing violations of the Kansas Consumer Protection Act by drug manufacturers enrolled in the 340B federal drug discount program.
The Kansas Hospital Association is in close communication with the AG's office and works closely with the American Hospital Association, legal counsel and partners such as the Community Care Network of Kansas, Kansas Council of Health System Pharmacists and Kansas Pharmacists Association to defend 340B protections in Kansas.
Thank you for your ongoing support as we fight to protect 340B in Kansas.