iBIO Statement on Illinois CMS Memo: State’s Own Analysis Shows 340B Expansion Would Add Hundreds of Millions in Costs Without Evidence of Patient Savings

iBIO Statement on Illinois CMS Memo: State's Own Analysis Shows 340B Expansion Would Add Hundreds of Millions in Costs Without Evidence of Patient Savings

by John Conrad | May 15, 2026 | Policy News

CHICAGO - The Illinois Biotechnology Innovation Organization (iBIO) today responded to a May 12, 2026 memorandum from the Illinois Department of Central Management Services (CMS) - the state agency that administers the State Employees Group Insurance Program (SEGIP) - to Illinois State Representative Travis Weaver. The memo answers follow-up questions raised at the April 14 hearing of the Commission on Government Forecasting and Accountability (COGFA) on how the federal 340B Drug Pricing Program is affecting Illinois state employees, retirees, and taxpayers.

What the CMS memo says

The memo's findings are direct, specific, and significant:

• The current 340B program costs Illinois employers approximately $224 million annually. Legislation to expand 340B is projected to add another $89 million on top of that.
• For SEGIP specifically, lost rebates are estimated at $31 million annually, with an additional $12.4 million projected impact under the proposed expansion.
• Illinois hospitals generate more than 2.5 times as much 340B-related profit as they spend on charity care, and allocate less than 2% of operating revenue to charity care overall.
• Large 340B hospitals charge, on average, 7% more than comparable non-340B hospitals, with outpatient service prices nearly 20% higher.
• More than half of Illinois hospitals already qualify for 340B participation - with 427 eligible hospital locations listed by HRSA - and CMS expects continued growth.
• Plan participants in QCHP, CDHP, and OAP Tier II and III plans would feel a direct financial impact through deductibles and coinsurance. Retired teachers (TRIP) and retired community college employees (CIP) would see their premiums rise, because their premiums are calculated as a percentage of the cost of coverage. Where premiums are collectively bargained, the increased cost would be borne by the State - meaning Illinois taxpayers.

CMS concludes that "available data suggests that the 340B program has not reduced patient out-of-pocket costs for 340B-related services and may contribute to higher costs across a broader range of healthcare services."

Statement from John Conrad, President and CEO of iBIO

"This memo is a wake-up call. The state agency that runs health coverage for hundreds of thousands of Illinois employees, retirees, and their families is telling legislators, in writing, that expanding 340B will cost Illinois hundreds of millions of dollars - and that there is no evidence the savings reach patients," said John Conrad, President and CEO of iBIO.

"The numbers in this memo are staggering. $224 million a year already, $89 million more if expansion passes, $31 million in lost SEGIP rebates today, $12.4 million more on the way, and Illinois 340B hospitals collecting more than two and a half times as much 340B-related profit as they spend on charity care. Patients are not seeing those dollars. State employees and retirees are not seeing them. Taxpayers are not seeing them."

"iBIO's position has always been straightforward: before Illinois mandates or significantly expands 340B through legislation like HB2371 (Moeller), lawmakers need to know where the dollars are going and whether the program is actually helping the patients it was designed to help. CMS's memo confirms that, in Illinois today, the answer is no."

"That is why we strongly support HB4954 (Deuter) and SB3146 (Johnson). These reporting and transparency measures are the essential first step. Patients deserve real affordability and access. Retired teachers, state employees, and the taxpayers who fund SEGIP deserve a program that does not raise their costs without delivering on its promise. And the General Assembly deserves the facts before it considers any mandate."

"We urge legislators to advance HB4954 and SB3146 - and to hold any mandate legislation, including HB2371, until Illinois has the transparency the CMS memo makes clear is missing today."