United States Secretary of Health and Human Services Xavier Becerra speaks at Health Subcommittee hearing
The 340B program “doesn’t have the transparency we need,” HHS Secretary Becerra said during a House Energy & Commerce subcommittee hearing today.

News Alert

HHS Secretary: 340B “Doesn’t Have the Transparency We Need”

U.S. Health and Human Services Secretary Xavier Becerra said today that the 340B program “doesn’t have the transparency we need” and “we are going to do what we can to make it more transparent.”

Becerra was asked about the drug discount program this morning during a House Energy & Commerce health subcommittee hearing on HHS’s fiscal year 2024 budget request. Subcommittee Vice Chair Larry Bucshon (R-Ind.) asked Becerra about his antitrust suit against Sutter Health, California’s largest health system, when Becerra was California attorney general. Becerra alleged that Sutter illegally used its dominant position in the northern California health care market to buy competing hospitals and physician practices and raise prices. Sutter settled the suit in 2021 for $575 million and agreed to change its business practices.

Bucshon observed that several Sutter hospitals are enrolled in 340B. If Sutter failed to meet Becerra’s legal expectations, should those hospitals have continued to be 340B facilities, Bucshon asked Becerra.

“What we don’t want is to find that there is opaqueness, that there’s little transparency about how money is being used,” Becerra answered. “340B doesn’t have the transparency we need. What I will tell you, with Sutter Health, we found that they were engaged in practices that were stifling competition, increasing in prices. That’s not what we want. And we want to make sure that on 340B, we’re not driving pharmacists out of business. We’re making sure community clinics can receive the benefits. We’re going to do what we can to make it more transparent.”

“You really just don’t know whether they’re acting well in 340B or not, because there’s no transparency, right?” Bucshon said.

Bucshon next asked about former HHS Secretary Kathleen Sebelius’ comment in 2014 during a Senate Finance Committee hearing on the HHS budget that 340B “has expanded beyond its bounds.” Noting 340B’s growth since then in terms of drug sales and participating sites, Bucshon said, “It seems to me that, logically, such an expansion would also mean exponential growth in the amount of charity care and other patient benefits. You would think that was what the program intended, right? But that’s just not the case that we’ve seen over the last eight years. So what are your thoughts on that?”

“We’re trying to do reforms in 340B,” Becerra said. “We need your help to have statutory authority to make some of these changes. We know that there’s been a lot of lawsuits filed because of 340B. What I will simply say to you—compliance, transparency, two crucial aspects of making sure…”

“You need legislation action for most of that, some of that?” Bucshon interjected.

“A great deal of it,” Becerra said.

“Yeah, well, I’m working on that,” Bucshon said.

Bucshon and Rep. Scott Peters (D-Calif.) sponsored legislation in the 115th Congress, the 340B PAUSE Act, that would have:

  • halted enrollment of disproportionate share hospitals and their child sites in 340B for two years
  • required these hospitals to report the insurance status of patients who receive 340B drugs; charity care costs incurred; gross reimbursement for 340B drugs; identities of 340B third party vendors; and for private nonprofit hospitals, their contracts with state or local governments to provide health care services to low income individuals who are not eligible for Medicare or Medicaid.

The Health Resources and Services Administration asked Congress this month in its budget request for power to publish regulations requiring covered entities to annually report how they use 340B savings to benefit the communities they serve. HRSA said it also would use general rulemaking authority over 340B “to define necessary terms” and “strengthen compliance and transparency related to the utilization of contract pharmacies.”

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