Bill Text: IL HB5421 | 2025-2026 | 104th General Assembly | Introduced

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Bill Title: Creates the 340B Integrity Act. Defines terms. Provides that, beginning January 1, 2027, 340B covered entities shall not bill any medical assistance fee-for-service or medical assistance managed care programs under the Illinois Public Aid Code for 340B drugs. Provides that, beginning July 1, 2026 a 340B covered entity shall use 80% of 340B profits from the prior year to decrease at the point of sale, including at the 340B contract pharmacy, the out-of-pocket costs paid for 340B drugs that are dispensed or administered to low-income patients of the 340B covered entity. Provides that, on or before September 1, 2026, and on or before September 1 of each year thereafter, each 340B covered entity shall annually report to the Department of Insurance, with respect to the 340B covered entity and separately for each offsite outpatient facility associated with the 340B covered entity, the specified information about the prior year. Provides that, on or before December 31, 2026, the Department of Central Management Services shall submit a report to the General Assembly on any impact to the State employee health plan arising from 340B covered entity purchases, 340B contract pharmacy arrangements, and general practices related to 340B drugs, regardless of whether the 340B drugs were self-administered or provider-administered. Provides that the report shall include, but not be limited to, an analysis of foregone rebates, the impact on premiums, and the impact to State employee out-of-pocket costs. Provides that, on or before December 31, 2026, the Department of Healthcare and Family Services shall report to the General Assembly on certain items for total aggregated covered outpatient drug units dispensed or administered in the State for the prior calendar year in connection with the medical assistance program under the Illinois Public Aid Code, broken out by fee-for-service and by each managed care plan. Makes other changes. Effective immediately.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced) 2026-02-13 - Referred to Rules Committee [HB5421 Detail]

Download: Illinois-2025-HB5421-Introduced.html

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104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026HB5421 Introduced , by Rep. Bob Morgan SYNOPSIS AS INTRODUCED:
New Act
Creates the 340B Integrity Act. Defines terms. Provides that, beginning January 1, 2027, 340B covered entities shall not bill any medical assistance fee-for-service or medical assistance managed care programs under the Illinois Public Aid Code for 340B drugs. Provides that, beginning July 1, 2026 a 340B covered entity shall use 80% of 340B profits from the prior year to decrease at the point of sale, including at the 340B contract pharmacy, the out-of-pocket costs paid for 340B drugs that are dispensed or administered to low-income patients of the 340B covered entity. Provides that, on or before September 1, 2026, and on or before September 1 of each year thereafter, each 340B covered entity shall annually report to the Department of Insurance, with respect to the 340B covered entity and separately for each offsite outpatient facility associated with the 340B covered entity, the specified information about the prior year. Provides that, on or before December 31, 2026, the Department of Central Management Services shall submit a report to the General Assembly on any impact to the State employee health plan arising from 340B covered entity purchases, 340B contract pharmacy arrangements, and general practices related to 340B drugs, regardless of whether the 340B drugs were self-administered or provider-administered. Provides that the report shall include, but not be limited to, an analysis of foregone rebates, the impact on premiums, and the impact to State employee out-of-pocket costs. Provides that, on or before December 31, 2026, the Department of Healthcare and Family Services shall report to the General Assembly on certain items for total aggregated covered outpatient drug units dispensed or administered in the State for the prior calendar year in connection with the medical assistance program under the Illinois Public Aid Code, broken out by fee-for-service and by each managed care plan. Makes other changes. Effective immediately.
LRB104 20390 BAB 33850 b
A BILL FOR
HB5421 LRB104 20390 BAB 33850 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the 340B
Integrity Act.
Section 5. Definitions. In this Act:
"340B contract pharmacy" means a pharmacy with which a
340B covered entity has contracted to dispense 340B drugs on
behalf of the 340B covered entity to patients of the 340B
covered entity, regardless of whether the 340B drugs are
distributed in person, via mail, or by other means.
"340B covered entity" has the meaning given to that term
in 42 U.S.C. 256b(a)(4).
"340B drug" means a covered outpatient drug, as defined in
42 U.S.C. 1396r-8(k)(2), that has been subject to any offer
for reduced prices by a manufacturer pursuant to 42 U.S.C.
256b(a)(1) and is purchased by a 340B covered entity.
"340B drug discount program" means the federal drug
pricing program described in 42 U.S.C. 256b.
"340B profits" means the difference between the aggregated
payments received from insurers, payers, or self-paying
patients for all 340B drugs and the aggregated acquisition
cost paid for all 340B drugs.

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"Charity care" has the meaning given to that term in line
23 of worksheet S-10 to the Medicare cost report or in any
successor form.
"Covered outpatient drug" means a covered outpatient drug,
as defined in 42 U.S.C. 1396r-8(k)(2).
"Low-income patient" means a patient of a 340B covered
entity with a family income below 200% of the poverty
guidelines updated periodically in the Federal Register by the
U.S. Department of Health and Human Services under the
authority of 42 U.S.C. 9902(2).
Section 10. Medical assistance carveout. Beginning January
1, 2027, 340B covered entities shall not bill any medical
assistance fee-for-service or medical assistance managed care
programs under the Illinois Public Aid Code for 340B drugs,
including, but not limited to, billing for any 340B drugs
dispensed at a 340B contract pharmacy.
Section 15. Use of 340B profits.
(a) Beginning July 1, 2026, a 340B covered entity shall
use 80% of 340B profits from the prior year to decrease at the
point of sale, including at the 340B contract pharmacy, the
out-of-pocket costs paid for 340B drugs that are dispensed or
administered to low-income patients of the 340B covered
entity.
(b) A 340B covered entity shall use any remaining 340B

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profits, after spending 340B profits in accordance with
subsection (a), on free and discounted care for low-income
patients of the 340B covered entity.
Section 20. 340B drug discount program reporting.
(a) On or before September 1, 2026 and on or before
September 1 of each year thereafter, each 340B covered entity
shall annually report to the Department of Insurance, with
respect to the 340B covered entity and separately for each
offsite outpatient facility associated with the 340B covered
entity, the following information about the prior year, in a
form and manner determined by the Department:
(1) delineated by form of insurance or payor type,
including, but not limited to, Medicaid, Medicare,
commercial insurance, and uninsured:
(A) the aggregated acquisition cost paid for all
340B drugs;
(B) the aggregated payments received by insurers
or payors for all 340B drugs; and
(C) the total number of prescriptions and
percentage of the 340B covered entity's prescriptions
that were filled with 340B drugs;
(D) the percentage of patients served by a sliding
fee scale for 340B drugs at the point of sale for
patients with family incomes less than 200% of the
Federal Poverty Guidelines;

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(2) the total operating costs of the 340B covered
entity and itemized costs for:
(A) implementing direct pass-through of 340B
program discounts to patients in the form of lower
cost sharing for 340B drugs at the point of dispensing
or administration;
(B) implementing a sliding fee scale for 340B
drugs at the point of sale for patients with family
incomes less than 200% of the poverty guidelines
updated periodically in the Federal Register by the
U.S. Department of Health and Human Services under the
authority of 42 U.S.C. 9902(2); and
(C) charity care;
(3) the total payments made to:
(A) 340B contract pharmacies for 340B
program-related services and other functions;
(B) third-party administrators for managing any
components of the 340B covered entity's 340B program;
and
(C) any other third parties in connection with
340B program-related compliance, legal, educational,
or administrative costs;
(4) the total number of 340B contract pharmacies and:
(A) the number of 340B contract pharmacies located
out-of-state and the states in which the out-of-state
340B contract pharmacies are located;

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(B) the total number of prescriptions and the
percentage of the 340B covered entity's prescriptions
that were filled at 340B contract pharmacies,
delineated by in-state and out-of-state 340B contract
pharmacies;
(C) the total remuneration paid to or retained by
340B contract pharmacies or their affiliates for any
340B program-related services performed on behalf of
the 340B covered entity; and
(D) the percentage change in paragraph (3) of
subsection (a) compared to the prior year.
(b) An officer of the 340B covered entity shall certify
the completeness and accuracy of the report submitted pursuant
to subsection (a).
(c) On or before December 31, 2026 and on or before
December 31 of each year thereafter, the Department shall post
all reports submitted by 340B covered entities pursuant to
subsection (a) on a publicly accessible website.
Section 25. Employer study. On or before December 31,
2026, the Department of Central Management Services shall
submit a report to the General Assembly on any impact to the
State employee health plan arising from 340B covered entity
purchases, 340B contract pharmacy arrangements, and general
practices related to 340B drugs, regardless of whether the
340B drugs were self-administered or provider-administered.

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The report shall include, but not be limited to, an analysis of
foregone rebates, the impact on premiums, and the impact to
State employee out-of-pocket costs.
Section 30. Medical assistance study.
(a) On or before December 31, 2026, the Department of
Healthcare and Family Services shall report to the General
Assembly on the following for total aggregated covered
outpatient drug units dispensed or administered in the State
for the prior calendar year in connection with the medical
assistance program under the Illinois Public Aid Code, broken
out by fee-for-service and by each managed care plan:
(1) the number of dispensed or administered covered
outpatient drug units;
(2) the number of dispensed or administered covered
outpatient drug units that were subject to a rebate under
42 U.S.C. 1396r-8;
(3) the number of dispensed or administered covered
outpatient drug units where for which pricing was obtained
by the 340B covered entity and the number of units billed
by 340B contract pharmacies; and
(4) the reasonable estimate of net costs or savings to
the State's medical assistance program due to 340B covered
entity purchases of covered outpatient drug units at 340B
pricing.
(b) To the extent the Department lacks a required item

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under subsection (a), the Department shall provide a
reasonable estimate based on all available information and an
explanation of the information that the Department lacks.
Section 35. Claims data. Nothing in this Act shall deny,
restrict, or prohibit a manufacturer from requiring a 340B
covered entity to provide claims information for the
manufacturer's 340B drugs.
Section 99. Effective date. This Act takes effect upon
becoming law.