Bridge Michigan recently published a story about prescription drug markups happening at Michigan hospitals, and it did an incredible job introducing readers to an incredibly expensive problem for Michigan patients. (Michigan may force hospitals to disclose savings from drug cost program, Bridge Michigan, May 5, 2026.)

Robin Erb spoke to patients, lawmakers, hospital industry insiders and affordability advocates and unpacked challenges connected to the federal 340B drug discount program that have been driving up patient costs for decades.

For physicians who spend our lives and careers caring for Michigan patients — including those who have the toughest time affording their care and treatment — it can be hard to wrap our minds around the idea that a prescription drug discount program actually raises costs for our patients, but that’s the reality.

Thirty years ago, the federal government created something called “the 340B program” to get low-income patients and patients like mine the medicine they need at steeply discounted prices. Drugmakers are required to provide the prescriptions to hospitals — and the pharmacies and clinics they purchase all over the country — for pennies on the dollar.

Unfortunately, we’ve learned that instead of passing those savings on to low-income patients for which they’re intended, Michigan hospitals, according to a report, have been marking up the drugs by as much as 800% and simply pocketing hundreds of millions of dollars in extra cash.

Data from IQVIA shows that only 1.4% of patients who should get a discount on their medicine under the program actually do. Nationally, it’s a system that’s translated to an estimated $50 billion in overcharges for patients every year.

Ms. Erb provided readers a remarkable introduction to the costs and challenges facing patients because of the program, and she highlighted legislation in the state House that the bill sponsor claims will increase transparency.

Physicians and patient advocates have looked closely at the legislation, though, and it isn’t the solution the sponsor claims it is. It isn’t really even a transparency bill.

House Bill 4878 relies on aggregated, hospital-controlled reporting that actually (and intentionally) obscures system-level accountability, it excludes charity-care comparisons, and it fails to show whether savings ever reach patients.

In simpler terms, it’s like hiring the fox to guard the henhouse, and then pretending the fox is telling the truth when it says all the missing chickens simply walked away. In this case, though, it isn’t hens who are being harmed, it’s sick and injured moms, dads, children, cancer patients and Michigan’s poorest residents.

This bill isn’t about transparency. It’s running cover for hospitals and PBMs that are taking discounts intended for low-income patients, charging low-income patients massive markups, and then pocketing the profits.

The bill is written in a way that would let hospitals claim they’re being “transparent” without actually coming clean about the details that matter.

It gets worse, though. The same bill actually includes mandates that expand the federal 340B program through Michigan state law. 

HB 4878 isn’t part of the solution. It’s part of the problem, and Michigan patients have enough of those already.

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