Andrew Berger: Health Care Transparency Means Fixing Drug Program

The following Op-Ed appeared in the Indianapolis Business Journal on 10/16/26 and was written by IMA President/CEO Andrew Berger.

Indiana manufacturers employ thousands of Hoosiers and provide the health care coverage their workers and families depend on. But rising health care costs are putting that commitment under strain. When costs climb without clear explanation, it holds our member companies back from growing and investing in high-quality jobs and wages.

Indiana also makes more pharmaceutical products than any other state in the country. As a leader in this globally critical industry, Indiana should demonstrate its willingness to tackle reforms that help businesses, employees and their families in a policy area in which we are so deeply invested as a state.

If lawmakers are serious about making health care more affordable for Hoosiers and all Americans, transparency must come first. That starts with the 340B Drug Pricing Program.

Created in 1992, the 340B program was designed to help safety-net institutions that serve low-income and rural patients by allowing certain qualified organizations to purchase medication at discounted prices. That mission remains important, but the program’s rapid expansion into large health care systems and retail contract pharmacy networks has created an unintended cost burden for employer-sponsored health plans. Now an $81 billion system, 340B still offers limited visibility into how discounts are used or whether the savings are consistently reaching the patients the program was intended to help.

That lack of transparency has real consequences for Hoosier employers and workers. A new 340B Employer Cost Impact Calculator from the National Alliance of Healthcare Purchasers estimates that the program adds $282 per covered life to employer-sponsored health plans in Indiana, totaling more than $331 million annually. For manufacturers competing in a global economy, those are dollars that could otherwise support hiring, workforce training or capital investment.

At its core, the issue is not the intent of 340B. The real issue is the absence of accountability and transparency for how the program is run. There is currently no comprehensive mechanism to track how program savings are distributed, prevent duplicate discounts or confirm that financial benefits are passed on to patients at the pharmacy counter. Without that transparency, employers and patients are left to question whether the program is working as intended.

A growing body of research has pointed to unintended consequences, including incentives for care to shift to higher-cost hospital settings and increased market consolidation that can drive up costs. For Indiana manufacturers already navigating supply chain pressures and workforce challenges, these hidden costs make it harder to stay competitive.

One promising path forward is a federal rebate-based reform model. Under this approach, 340B-eligible hospital systems would still receive the value of 340B discounts, but through a process that verifies eligibility before funds are finalized. This structure would improve visibility and reduce the risk of duplicate discounts while better aligning savings with patient care. Importantly, this model has been developed to maintain cash flow for health systems and hospitals, ensuring that access to care is not disrupted.

This type of reform reflects the simple fact that transparency should benefit everyone. Our workers deserve to know if program savings are lowering their out-of-pocket costs, and our employers deserve clarity on what is driving their health care spending. With reliable data, lawmakers can assess whether the program is actually meeting its intended goals.

Indiana is already making strides to bring greater transparency to 340B. In 2025, the Indiana Manufacturers Association supported Senate Enrolled Act 118, which requires 340B-participating entities to report annually to the Indiana Department of Health on how they use discounted drug pricing to benefit patients and their communities. That data is then aggregated into a public report, giving Hoosier employers and workers concrete visibility into whether the program’s savings are reaching the people it was built to serve. It is a model for the kind of accountability federal reform should follow.

Hoosier manufacturers support practical reforms that hold the 340B program accountable and ensure its savings are directly benefiting patients. With the right updates, the program can continue to serve vulnerable communities while also helping reduce the broader cost burden on employers and workers.

Health care transparency is an essential part of driving down costs. Reforming 340B is a critical step toward a system in which every dollar is accounted for and every intended benefit reaches the patients who need it most.