Pharmaceutical firms imperil Florida’s healthcare safety net
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Nonprofit rural healthcare providers in Florida are facing potential financial hardship due to drug companies’ plans to convert the current 340B payment model. The new model would change the upfront savings on drug purchases to rebates on the backend of transactions, which could leave providers with resource deficits they can’t overcome. The article suggests that the Florida Legislature should protect these providers by codifying the process by which they attain critical savings under the 340B Drug Pricing Program and preventing drug companies from expanding their rebate scheme.
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Facing a New Chapter of Bailouts, Nonprofit Rural Healthcare Providers Seek Support
As discussions around another round of bailouts start circulating, nonprofit rural healthcare providers are waiting in the wings. Unlike the Wall Street executives who relied on government help during their financial crisis, these providers have not mishandled their resources. They need support and, luckily, this doesn’t have to come in the form of a bailout. The Florida Legislature and Governor DeSantis have the power to intervene and safeguard these providers who are crucial to many underserved Floridians. The solution lies in streamlining the process for these providers to benefit from the 340B Drug Pricing Program.
The Threat from Drug Makers
Pharmaceutical companies pose a risk to Florida’s healthcare safety net. Under their new plan, they aim to switch the current 340B payment model from providing immediate savings on drug purchases to offering rebates after transactions. However, this could have a negative impact on nonprofit healthcare providers. These entities depend on the savings obtained through the 340B program to balance the cost of delivering high-quality care at prices often below the cost of services.
Drug companies seem to be playing a waiting game. Their objective is to reimburse providers at a future date determined by their terms, leaving every 340B claim open to dispute and deferred payment. This strategy would place rural providers, who already operate on tight budgets, in a precarious position where a lag in receiving 340B savings could result in insurmountable resource deficits.
These changes could severely impact the clinical outcomes of millions of rural Americans who rely on their local providers, often the only ones accessible to them. A delay in upfront 340B savings could lead to many providers being unable to continue their operations.
Rebate Model Pilot Program: A Cause for Concern
In August, the Trump administration released a guidance for a rebate model pilot program that has not sat well with both providers and pharmaceutical manufacturers. Providers are worried that they won’t receive savings from rebates promptly, while drug companies are displeased with what they perceive as a half measure, applicable only to a specific group of prescription drugs.
Florida’s Legislature Can Step In
The pilot program extends rebate benefits only for the ten drugs chosen for the Medicare Drug Price Negotiation Program, under the Inflation Reduction Act. Florida Legislature has the power to enact laws that safeguard prescriptions paid by private payers and the state Medicaid fund. This would limit the conversion of 340B to discounted prices only for these ten drugs. This measure won’t infringe on federal prerogatives since states have the authority to regulate the distribution of prescription drugs within their borders when they or private entities are the payers.
There is an urgent need for Florida to act against drug companies attempting to turn all 340B savings into rebates, regardless of the payer. If the state’s lawmakers remain inactive, negative repercussions are inevitable.
The Current State of Rural Hospitals
Since 2010, 89 rural hospitals have shut down, including five in Florida. Another 65 have undergone “converted closures” — reducing or eliminating services, changing locations, or closing facilities. According to a 2025 analysis from the Center for Healthcare Quality and Payment Reform, 760 rural hospitals are at risk of closure, with 40% close to immediate risk. In Florida, nine rural hospitals (41%) are at risk of closure, with two hospitals in immediate danger. This situation would have arisen even with the critical savings provided by the 340B program.
Florida’s Response
In 2023, Governor Ron DeSantis signed significant pharmacy benefit reform legislation – the Prescription Drug Reform Act. This law lessened the control Pharmacy Benefit Managers had over the state’s prescription drug supply chain. However, the state has yet to shield 340B providers from drug companies determined to limit the number of discounted prescriptions. Florida is one of five states where contract pharmacy protection legislation failed in the Legislature in 2025. HB 1527 would have barred drug manufacturers from interfering with how 340B providers acquire drugs and prohibited PBMs from discriminatory reimbursements to said providers.
Moving Forward
Florida should not leave its rural 340B providers at the mercy of national politics. Federal resolutions often take too long to manifest, if they do at all. The Attorney General should sue any drug company trying to expand rebate conversion beyond the pilot program’s parameters. HB 1527 should be reintroduced with an added clause prohibiting drug companies from expanding their rebate scheme. It is time for the Florida Legislature to step up and protect rural nonprofit providers from the ongoing effort by drug companies to dismantle the 340B program.
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This article has been prepared by John Arcano, senior manager of policy and government affairs at the AIDS Healthcare Foundation.
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