/>iOnly a few days remain for stakeholders—which includes drug manufacturers, patients, health care providers, pharmacies and others— to take advantage of a rare opportunity to influence the statutory contours of the 340B Drug Pricing Program (the “340B Program” or the “Program”). Specifically, industry stakeholders have until April 1st to submit comments to legislators regarding the Discussion Draft Explanatory Statement and Supplemental RFI (the “RFI”) of the “Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now and for the Future of 340B Act” (the “Sustain 340B Act”). This bipartisan legislative discussion draft was released by the Senate 340B Working Group (the “Working Group”) earlier this year, to update the 340B Program.
Following significant and polarizing stakeholder disagreements over fundamental but statutorily ambiguous aspects of the 340B Program in recent years, the bipartisan Senate 340B Working Group issued the Sustain 340B Act legislative discussion draft and the RFI to “provid[e] clarity in statute about Congress’s intent for the 340B program”—as Congress’ intent had “previously only [been] expressed in report language.” As such, the Sustain 340B Act legislative discussion draft and RFI address notable aspects of the 340B Program, including the scope of the term “patient”, the acceptable parameters for the use of contract pharmacies, and the ownership and integration of so-called “child sites” into covered entities. More broadly, the legislators solicit specific comments to a wide range of questions from stakeholders across the industry.
The Growing Need to Improve Ambiguity, Oversight, and Transparency in the 340B Program
The 340B Program requires drug manufacturers whose drugs are reimbursed under Medicaid to provide a discount on outpatient drugs to certain categories of health care providers, including, but not limited to, certain types of hospitals and federal grantee clinics. Since its creation through Section 340(b) of the Public Health Service Act in 1992, the 340B Program has continued to evolve organically with few, limited amendments to the statute. Stakeholder concerns have grown over the years. In 2023, the Working Group—comprised of Senators John Thune (R-S.D.), Debbie Stabenow (D-Mich.), Shelley Moore Capito (R-W.Va.), Tammy Baldwin (D-Wis.), Jerry Moran (R-Kan.), and Ben Cardin (D-Md.)— sought input on policies to provide stability and appropriate oversight, with Sen. Moran (R-Kan), in particular, opining that “[t]he 340B Drug Pricing Program is not working as effectively as it should.”
As of 2024, top stakeholder concerns regarding the Program include ambiguity, oversight, and accountability. With statutory ambiguity surrounding the treatment of drugs dispensed through contract pharmacies—defined in the discussion draft as pharmacies “with which a covered entity has contracted to dispense covered outpatient drugs”—a number of drug manufacturers have placed restrictions on the availability of their drugs at 340B discounted drugs at these pharmacies. Upon the release of the Sustain 340B Act legislative discussion draft in February 2024, the Working Group reiterated its call for legislation that would provide transparency and accountability within the 340B Program.
Key Provisions and Areas for Comment in the Sustain 340B Act and RFI
The following summarizes key points from the 51-page Sustain 340B Act legislative discussion draft and the RFI:
| Sense of Congress | Codifies that the purpose of the 340B Program is to stretch scarce resources and help safety net providers maintain, improve, and expand patient access to health care services by requiring drug manufacturers—as a condition of participation in Medicaid and Medicare—to provide discounts and rebates to covered entities that serve a disproportionate share of low-income and underserved patients |
| Contract Pharmacy |
FEEDBACK SOUGHT: The Working Group seeks comment on:
|
| Child Sites |
FEEDBACK SOUGHT: The Working Group seeks additional feedback on how to appropriately ensure that child sites are aligned with the intent of the 340B program (including appropriate guidelines, additional requirements, level of oversight, specific policies, program integrity measures, special considerations in geographic areas). |
| Transparency | Requires covered entities to report detailed information regarding policies, patient and prescription information—which would be publicly available—as well as certain specific data (including the use of savings in the 340B program, the number of individuals given drugs at the 340B price, the total number of prescriptions filled with covered outpatient drugs, the financial demographics of patients, and the covered entity’s list of contract pharmacies) |
| Enhancing Program Integrity |
|
| Preventing Duplicate Discounts | Creates a national, third-party drug discount program data clearinghouse to prevent duplicate discounts between 340B and Medicaid |
| Ensuring Equitable Treatment of Covered Entities and Participating Pharmacies | Imposes new requirements, exclusions, reimbursement terms, and prohibits a number of specific actions to ensure group health plans, health insurance issuers, or PBMs do not discriminate against covered entities, their contract pharmacies, or their participants, beneficiaries, or enrollees |
| User Fee Program | Adopts a user fee program to equip HRSA with the appropriate resources to oversee and administer the 340B Program |
| Studies and Reports |
|
| Additional Resources for Oversight | Authorizes an additional $3,000,000 for HHS to conduct 340B Program audits, investigations, oversight, and enforcement activities |
| Definitions | Defines key terms throughout the text |
Covered Entities, contract pharmacies, manufacturers, 340B third party administrators and other interested parties should submit comments to Bipartisan340BRFI@email.senate.gov by April 1st to take advantage of the opportunity to inform the re-shaping of the 340B Program.
Ann W. Parks contributed to the preparation of this post.
