Illinois Lawmakers Pass Dual 340B Bills: Pharmacy Protections and Transparency Audit Head to Governor

Illinois lawmakers concluded their 2025 legislative session by passing two intertwined bills addressing the federal 340B drug pricing program (search)Search drug, delivering wins to both hospitals and pharmaceutical manufacturers in a carefully balanced compromise that now awaits Governor JB Pritzker's signature.

House Bill 2371, sponsored by Rep. Anna Moeller (D-Elgin) and Sen. Dave Koehler (D-Peoria), prohibits drug manufacturers from interfering with the ability of 340B-qualified hospitals and clinics to acquire discounted medications. The bill also bars companies from restricting providers' use of contract pharmacies to dispense those drugs, and shields covered entities from requirements to disclose cost or income data beyond what state or federal law already mandates.

The measure cleared the Senate on a 55-0 vote on May 29 and ultimately passed the House 113-1 on June 1, after the inclusion of a companion transparency bill helped overcome opposition from the Pharmaceutical Research and Manufacturers of America (search)Search company (PhRMA).

"During a time when the federal government is cutting funding for healthcare for families across the state, we should be doing everything we can to bring vital resources to support patients and their healthcare providers — resources like 340B that cost nothing to taxpayers or the state of Illinois," Rep. Moeller said.

Transparency Audit Mandated

House Bill 4327, described as a "transparency" bill and sponsored by Rep. Camille Lilly (D-Chicago) in the House and Sen. Koehler in the Senate, directs the Illinois Department of Insurance (search)Search term to conduct an audit of the 340B program statewide. The audit will examine how much revenue hospitals and clinics generate through the program and how those funds are deployed.

Specifically, the bill requires covered entities to report what they pay for 340B-acquired medications versus what they are reimbursed, and how much of the resulting margin supports charity care or other unreimbursed or subsidized care programs. The audit will also gather demographic data on patient populations, including the percentage served who are uninsured, underinsured, Medicaid beneficiaries, racial and ethnic minorities, residents of rural or medically underserved areas, and other vulnerable groups defined in the legislation.

Additionally, the bill calls for an examination of how the 340B program affects costs for other healthcare programs such as Medicaid and state employee group health insurance plans, and requires manufacturers to report aggregate discount amounts provided under the program each year since 2020. HB 4327 passed the House 106-8 and the Senate 57-0.

A Program Under Scrutiny

The federal 340B drug pricing program (search)Search drug, launched in 1992, requires drug manufacturers participating in Medicaid to provide outpatient medications at substantial discounts to providers serving large numbers of uninsured, underinsured, and Medicaid patients. Those providers typically mark up the prices charged to patients and use the difference to support operations.

According to an analysis by KFF, the program has grown dramatically, from $2.4 billion in drug purchases nationally in 2005 to $66.3 billion in 2023. This expansion has fueled escalating tensions between hospitals and clinics on one side and the pharmaceutical industry on the other.

Testifying before a House committee on May 26, PhRMA lobbyist Peter Fotos argued that HB 2371 effectively made it "illegal to ask for receipts." He stated: "Lawmakers should demand real transparency, real accountability, and a full understanding of the financial impact on state programs. We believe those questions must be mentioned before considering a bill to prohibit guard rails."

PhRMA senior director of public affairs Will May later told WAND News that large tax-exempt hospitals and their for-profit partners are "exploiting the 340B program, buying medicines at steep discounts and marking them up by thousands of dollars." He added: "Across the country and here in Illinois, 340B is driving up costs for patients, taxpayers and employers instead of ensuring that these savings reach those who need them most."

Stakeholder Reactions

Hospital and community health center groups claimed victory following the bills' passage. Ollie Idowu, president and CEO of the Illinois Primary Health Care Association (search)Search term, said: "Today, our legislative champions stood strong in the face of intense industry pressure, to put patients first. Because of their courage and leadership, 1.5 million Illinoisans who rely on community health centers will continue to have access to the affordable medications and comprehensive services they need to live healthy lives."

A.J. Wilhelmi, who leads the Illinois Health and Hospital Association (search)Search term, noted: "Illinois now joins more than 20 other states that have enacted protections for the 340B program, safeguarding patients' access to 340B medications and the healthcare services those savings support in communities across the state."

However, some community voices expressed skepticism. Pastor Dr. Randall White from the Healthcare Equity and Affordability Alliance said: "Regardless of the fact of who thinks that this should be pushed forward, we the people are speaking up. We believe that we need more transparency. The hospitals are getting big discounts, but it's not touching the hands of those who need it the most."

PhRMA, which had urged passage of HB 4327 without HB 2371, maintained that broader national reforms are needed. "Across the country and here in Illinois, 340B is driving up costs for patients, taxpayers and employers instead of ensuring that these savings reach those who need them most," May said. "PhRMA will continue working with policymakers to advance solutions that protect patients."

Both bills now await action from Governor JB Pritzker.