BISMARCK — A political group backed by billionaire Elon Musk is targeting North Dakota lawmakers with TV ads, robocalls and a truck-mounted billboard campaign, attacking a federal program that helps hospitals buy discounted prescription drugs to serve low-income and rural communities.
For nearly two weeks, Building America's Future, a nonprofit organization that spends millions of dollars to boost Republican candidates during elections, has aired ads against supporters of the 340b drug pricing program, specifically state Rep. Jon Nelson, R-Rugby. They claim the program subsidizes gender transition procedures for minors. A video can also be found on the group’s YouTube channel with the title “Trump Underminers.”
Reuters reported in October 2024 that a handful of people familiar with how the group is funded confirmed it receives financial contributions from Musk, billionaire and senior adviser to President Donald Trump.
Nelson dismissed the ads as misleading.
“The one thing that's consistent in those ads is there's absolutely no truth in any of the messaging in the ad,” he said.
What is the federal 340b program?
The federal 340b program allows hospitals or health centers to receive prescription medications at discounted prices if they serve low-income communities, rural or isolated communities, or focus on children’s or cancer patient care.
Whatever profit is made from the markup hospitals charge on 340b discounted drugs goes back to the hospital to offset the cost of services they must provide but lose money on.
As an example, in some rural hospitals, it is not cost-effective to operate an emergency room — the hospital loses money doing so. Yet, for certain populations, it may be the only ER within hours, making it an essential service.
If that hospital is participating in the 340b program, it can use some of the savings the program provides on prescription drugs to offset the financial loss it takes by operating an emergency room.
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Why is Building America's Future targeting North Dakota lawmakers?
The group posted in early February about a truck with a message plastered on its side in capital, bold lettering: “340b is subsidizing gender transitions for kids."
The matte-black truck, with what appeared to be out-of-state license plates, looped around North Dakota’s Capitol building on the morning of Feb. 10.
There was a similar message on the back in all capital letters: "Tell North Dakota Republicans: stop subsidized gender transition for kids."
Since the recent general election, the organization has been sending a fleet of similar trucks with digital billboards across mostly Midwest states bolstering policies set forth by the Trump administration and making accusations against lawmakers who oppose them.
Nelson said there are no transgender surgeries happening in North Dakota, let alone any subsidized by the 340b program.
“We do not — I've asked every facility, health care facility ... in North Dakota — we do not do transgender surgeries,” he said. “I'm sure it's the same ad that they run in every state, and they use this ... and expect people not to see through it.”
Nelson said the ad attack is “unfortunate” but said “that’s politics today.”
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“I would say this,” he said. “It hasn't endeared me toward buying a Tesla vehicle.” (Musk is the car company's CEO.)
Nelson's bill aims to expand 340b pharmacy contracts
Nelson said his bill — House Bill 1473 — helps provide access to prescription medication and supports rural health care centers, so he is “proud to sponsor this bill.”
Currently, hospitals or federally qualified health centers that partake in the 340b program can only provide the drugs they receive at discounted rates through one contracted pharmacy.
Under Nelson’s bill, North Dakota health centers participating in the 340b program would be able to contract with more than one pharmacy to provide the medication, allowing for greater access to 340b discounted medication.
“For example, Coal Country Health Center has locations in Beulah, Hazen, Killdeer and Center,” said Shelley Ten Napel, CEO of the Community Health Care Association of the Dakotas. “If they were to choose Beulah as their only 340b contract pharmacy — just choosing the one — that would leave their Killdeer patients to have to travel an hour to Beulah for discounted medications.”
Those in opposition to the bill say the 340b program incentivizes the use of more and higher-cost medications, does not pass discounted prices on to patients, and there is not enough oversight to ensure health centers are using the profits generated by the 340b program on patient care.
Instead, they say the expansion of the 340b program is driven by pharmacies looking to increase their profits.
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“What pharmacies want access to are the hospital profits,” said Jessica Lynch, a lobbyist for the Pharmaceutical Research and Manufacturers of America. “Pharmacies generally make 25% to 35% off of the hospital profits ... That total profit that contract pharmacies made last year was $6 billion in profit.”
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