SB 2385 by State Sen. David Koehler would provide greater legal protections to pharmacy benefit managers, hospitals and major corporate pharmacy chains that exploit the 340B Program, a prescription drug discount program intended to help patients in poor, low-income and rural communities.

“SB 2385 will boost profits for hospitals and pharmacy benefit managers at the expense of vulnerable patient communities,” said Terry Wilcox, Co-Founder and Chief Mission Officer at Patients Rising. “This poorly-drafted bill fails to include any accountability for how 340B funds are spent.”

“When hospitals receive federally-mandated drug discounts, those savings should be passed on to patients,” Wilcox said.

340B Program Exploited by Billion-Dollar Healthcare Corporations

Created in 1992, the 340B Drug Pricing Program helps low-income and rural patients access discounted medications through hospitals and clinics. Yet, many hospitals don’t pass those savings on to patients. Instead, hospitals keep the money for themselves while charging patients full price.

A recent investigation by the U.S. Senate Health, Education, Labor, and Pensions Committee identified rampant abuses by hospitals and pharmacy benefit managers of the 340B Drug Pricing Program. Over a five-year period, just two hospitals brought in more than a billion dollars of revenue from the 340B Program without passing those savings on to their patients, the HELP Committee report found.

In Illinois, covered entities are using the 340B Program to expand pharmacy services in wealthy communities, where they can charge higher prices for prescription services. Half of 340B pharmacies supposedly serving poor and working families in Illinois are located in affluent neighborhoods.

Even more demonstrative of the program’s abuses, nearly a quarter of 340B pharmacies in Illinois are located outside the state. Hospitals participating in the program are selling these discounted drugs to pharmacies in 35 other states.

Rather than fix the problem, SB 2385 protects these profit-sharing agreements under state law. Among the major health care corporations benefiting from this bill are for-profit chain drug stores, including Walgreens, CVS, and Walmart.

Higher Health Care Costs for Insured Patients

Insured patients in Illinois are likely to pay more for their healthcare as a result of SB 2385.

A recent 2025 analysis by IQVIA found that insured patients in Illinois lose out on $84 per year on prescription drug rebates that are going to hospitals and PBMs. In total, Illinois patients and employers are paying an additional $533 million per year in higher health insurance costs from lost rebates. If SB 2385 becomes law, insured patients in Illinois would see their healthcare costs increase by $171 million.

“Today, the program operates as a “buy low and sell high” mechanism, allowing more than half of hospitals in Illinois to charge employers and working families the full commercial price for medications, with hospitals pocketing the difference,” explains Cheryl Larson, president and CEO of the Midwest Business Group on Health.

The Patients’ Right to Know Campaign:

To ensure the 340B program fulfills its mission, patient advocates are calling for state reforms that enhance accountability, mandate transparency, and guarantee protections for patients. For more information on the Patients Right to Know Campaign and 340B in Illinois, check out our one-pager.

Patients Rising has launched a Patients’ Right to Know Campaign that urges Illinois lawmakers to adopt reforms, including:

• Better Oversight: Policymakers should require clear reporting on how program funds and savings are used.
• Focus on Low-Income Communities: Set guidelines to ensure 340B pharmacies prioritize underserved areas.
• Accountability: Establish measures to track how savings from the program directly benefit patients in need.