Baldwin, Moran Roll Out Comprehensive Bill to Reform and Strengthen 340B Drug Discount Program

WASHINGTON, D.C. – Today, U.S. Senators Tammy Baldwin (D-WI) and Jerry Moran (R-KS) led their colleagues, U.S. Senators Shelley Moore Capito (R-WV), Tim Kaine (D-VA), John Boozman (R-AK), and John Hickenlooper (D-CO) – members of the Senate 340B Bipartisan Working Group – to introduce sweeping legislation to reform the 340B Drug Pricing Program, which provides discounted prescription drugs to health care providers that serve vulnerable, low-income, and underserved patients.

“The 340B program was designed to help hospitals and clinics that help the most vulnerable Americans get the medications they need. However, to make sure that Wisconsinites can continue to receive the care they need, we need to bring some real accountability and transparency to the program,” said Senator Baldwin. “I’m proud to have brought together Democrats and Republicans to address these issues head on, helping more Americans afford the care they need and ensuring that the 340B program puts the patients first.”

The 340B Drug Pricing Program was designed to help Federally Qualified Health Centers, rural clinics and critical access hospitals, and other providers that serve high volumes of Medicaid and uninsured patients expand access to care and lower costs for patients. The program requires drug manufacturers to provide discounts to these clinics and hospitals that serve a disproportionate share of low-income and underserved patients. However, in recent years, the 340B program has grown and evolved, leading to calls for more accountability, transparency, and certainty for covered entities participating in the program. The Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now (SUSTAIN) 340B Act is a set of bipartisan, comprehensive reforms to create greater stability, clarity, and transparency in the 340B program.

The SUSTAIN 340B Act would:

• Sense of Congress – Reiterate the original intent of the 340B program and clarify the program provides point-of-purchase discounts, as opposed to rebates.
• Contract Pharmacy – Codify covered entities’ use of contract pharmacies while placing reasonable limitations including registration, audits of covered entities with a large number of contract pharmacies, and standardization of contractual requirements between covered entities and contract pharmacies. The bill does not place numeric or geographic limitations on the use of contract pharmacies.
• Patient Definition – Establish the definition of an eligible patient under the 340B program and covered services for these patients. It also adds requirements and oversight for 340B patients being dispensed 340B drugs through referrals to non-covered entities.
• 340B Rebate Model Pilot Program – End any 340B Rebate Model program within one year and require the Department of Health and Human Services (HHS) transition to the clearinghouse established in the legislation.
• Child Sites – Establish that child sites must be wholly owned and integrated with the parent covered entity, disincentivizes child site acquisitions with the sole purpose of expanding 340B footprints, and directs HHS to establish registration and oversight procedures.
• Supporting Transparency – Place new annual reporting requirements on covered entities relating to their utilization of the 340B program.
• Strengthening Program Integrity – Give HHS authority to establish auditing and reporting procedures for compliance under the 340B program and authorize removal of covered entities who are found in noncompliance and do not implement corrective action plans.
• Preventing Duplicate Discounts – Establish a 340B data clearinghouse operated by an independent, third-party entity to prevent diversion and duplicate discounts in the 340B program.
• Patient Financial Assistance – Require covered entities to establish a standard, transparent patient financial assistance policy for patients at or below 200% of the federal poverty level.
• Supporting Equitable Treatment of Covered Participants – Prevent insurers from discriminating against 340B covered entities and their contract pharmacies.
• User Fee Program – Establish a user fee program for participation in the 340B program to pay for program administration, including the clearinghouse.
• Studies and Reports – Require reports to Congress on hospital debt collection practices, dispensing fees, and data collection system integration.
• Additional Resources – Authorize three million dollars annually for five years for conducting oversight and enforcement and nine million dollars annually for four years for bill implementation.

The Senate 340B Bipartisan Working Group has existed for more than a decade and is comprised of members who support the 340B program and are committed to sustaining it. In the 118th Congress, the group sought stakeholder feedback on how to improve the 340B program and released a bipartisan discussion draft to strengthen it. The draft reflected the group’s belief that the program provides a critical benefit to eligible providers by helping them stretch federal resources to deliver health care services to the patients they serve, while also addressing concerns about program ambiguity and the need for greater transparency and accountability.

Full text of the legislation is available here.

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