March 5, 2025
Georgia House of Representatives
Committee on Health
Georgia State Capitol
206 Washington Street, SW
Atlanta, Georgia 30334
Dear Representative,
Today, the Committee on Health will hold a hearing on HB 139. On behalf of the 6,984 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Georgia, I urge you to oppose HB 139, which will change how the federal 340B Drug Pricing Program operates in Georgia and increase government waste and mismanagement.
To participate in Medicaid, Section 340B of the Public Health Service Act requires drug manufacturers to help federally funded clinics and public hospitals that serve a large uninsured population cover the cost of drugs and provide discounts to patients. However, the lack of a clear definition of an eligible patient, along with poor oversight, have led to the program being exploited by hospitals and contract pharmacies to generate millions of dollars in profit. A September 9, 2025, Congressional Budget Office (CBO) report showed how the nationwide costs of the 340B program rose from $2.4 billion in 2005 to $6.3 billion in 2023. The 340B program costs Georgia’s employers and workers $160 million in foregone rebates annually and costs Georgia’s taxpayer-funded public employee health insurance plans an additional $27 million per year.
A September 21, 2025, Wall Street Journal editorial described how well-financed 340B hospitals use 340B discounts to finance the acquisition of competing providers that are not eligible for 340B discounts, which increases healthcare market consolidation and raises costs for insurers and patients. A January 23, 2025, fiscal analysis of 340B contract pharmacy mandate legislation in Utah found that, “Enactment of this legislation could also increase pharmacy costs for the Public Employees Health Program (PEHP). Assuming ten percent more drugs are purchased through 340B pricing, PEHP statewide costs could increase by $1,987,700, ongoing in FY 2026 from the General Fund, Income Tax Fund and Other Financing Sources.” There is no reason to risk Georgia taxpayers’ money by enacting HB 139.
On November 25, 2024, the Minnesota Department of Health (DOH) issued the first report on how 340B works in a state. The hospitals received at least $630 million in 340B revenue in 2023, which may only be half of the total. The largest hospitals, or 13 percent of participating hospitals, received more than $500 million, or 80 percent of the revenue. The highest profit was $129 million at M Health Fairview University of Minnesota Medical Centers while federal safety-net grantee clinics generated the least revenue. The Minnesota DOH report should be a wake-up call not only for Congress to move forward with 340B reform as CCAGW has recommended, including defining a patient as indigent, not eligible for Medicaid, and lacking insurance, as well as verification of patient eligibility by covered entities, but also for states like Georgia to forgo changes to the program at least until they analyze how it is impacting patients and taxpayers within their borders. Georgians deserve at least the same level of transparency provided by the Minnesota DOH, which would not be provided by HB 139.
Rather than expanding 340B and increasing wasteful spending in Georgia, I urge you to contact your congressional delegation and ask them to reform the program. Again, I ask that you oppose HB 139.
Sincerely,
Tom Schatz
President, CCAGW