House E&C full committee ranking Democrat Frank Pallone said yesterday that 340B hospital reporting legislation the E&C health subcommittee passed yesterday "may be used to draw an inaccurate narrative about the value of the program.”

House E&C Full Committee May Vote on 340B Transparency Bill as Soon as Next Week

The full House Energy & Commerce Committee as of late this morning had not yet said when it will markup 340B hospital reporting legislation that split its health subcommittee in two along party lines yesterday. The committee’s Republican majority reportedly aims to finish work by Memorial Day on the 340B bill and others its passed May 17 that address transparency and competition in health care.

The health subcommittee voted 16-12 Wednesday—all yes votes Republican and all no votes Democratic—to forward the 340B bill, H.R. 3290, to the full committee for a vote. Two members did not cast votes—Reps. Richard Hudson (R-N.C.) and Debbie Dingell (D-Mich.).

The subcommittee considered seven bills. It passed four unanimously and one by voice vote. The only one that divided the panel along partisan lines was Vice Chair Larry Bucshon’s (R-Ind.) 340B measure. (The seventh, on value-based drug purchasing in Medicaid, passed 16-11 with ranking Democrat and co-sponsor Anna Eshoo of California voting aye.)

Subcommittee chair Brett Guthrie (R-Ky.), who reportedly did not want to hold votes on any bills that lacked bipartisan support, turned the gavel over to Bucshon when his bill came up and left the podium. Guthrie, however, ultimately voted for the bill with the rest of his fellow Republicans.

H.R. 3290 would require DSH hospitals “and any other covered entity” that the U.S. Secretary of Health and Human Services specifies to report annually for each covered entity and off-campus outpatient department data including:

  • number and percentage of patients who received 340B drugs, broken down by Medicare eligibility, Medicaid enrollment, and no insurance
  • total charity care costs
  • total costs of serving Medicare, Medicaid, and uninsured patients minus total payments for such services
  • 340B savings and how they were used.

HHS would have to publish the data it collects annually in a searchable form on 340B OPAIS, the 340B program database, “in a manner that shows each category of data reported in the aggregate and identified by the specific covered entity submitting such data.”

HHS would have 180 days after the enactment date to issue an interim final rule to carry out these new requirements.

H.R. 3290 also would let HHS audit covered entity records to determine how entities use their net income from 340B drug purchases. Entities would have to keep and provide records as HHS deemed necessary. HHS has been seeking this authority for several years.

Bucshon’s draft bill released in April would have required 340B hospitals to report “net revenue” from 340B drugs “and how such revenue was used.”

The version that was introduced Monday and passed by the subcommittee yesterday would require them to report “savings” from 340B drugs, defined as the difference between either GPO or wholesale cost for a drug and the drug’s 340B ceiling price.

Bucshon’s remarks

Speaking on his bill’s behalf, Bucshon told the subcommittee, “If you ask me to tell you what [the 340B] program actually looks like at the facility level and what covered entities really do with their [340B] savings, I truly couldn’t tell you—and that should be a concern to everyone.”

“The only way for us as lawmakers to understand what this program looks like for our constituents is to go to each hospital and ask them for their data,” he said.

Bucshon raised The New York Times’ September 2022 exposé about how a health system allegedly took advantage of a Richmond, Va., hospital’s 340B status to expand services in predominantly white suburbs but not at the hospital or in its predominantly Black neighborhood. Other Republican and Democratic subcommittee members invoked the article in their remarks on the bill.

Bucshon said the private nonprofit health system that owns the Richmond hospital “has potentially exploited program [but] I don’t know if that’s true or not because of lack of transparency.”

“Transparency will not only give all of us the confidence that the program is being properly utilized, but will help institutions defend themselves against such charges if they are doing the right thing,” he said. “To those who argue that these requirements are burdensome, I’d ask you to look at the grantees in this program … who do have some transparency requirements to account for how they use the 340B program and have specific requirements on how to reinvest those savings into their patients. It can be done.”

Bucshon said his bill would do more than simply compare 340B hospital savings with charity care. He said it also asks hospitals “to report how much payer shortfall it provides and how and how much discounted care it subsidized…. [T]he amount of charity care and payer shortfall provided in a year will be massive values that will eclipse any savings from 340B.”

“If there are other metrics that we should be considering, I’m all ears with that,” he said.

Bucshon said, “I think we need to get to the bottom of the contract pharmacy issue, but the only way to do that is to have the court settle this issue once and for all. If the hospitals are right and pharma is acting illegally, the courts will say so. However, I believe that changes the scope, the size, of the 340B program. Anything that does that needs to be a subject of a broader conversation on reforms to the program. If my colleagues want to discuss contract pharmacies and other reform topics, I’ll gladly join in. The Energy & Commerce Committee is the only committee of Congress that could ever solve a problem like 340B because we have such a rich history of bipartisanship and cooperation. If we want to do this, I think we can absolutely get this done in a bipartisan way.”

Pallone’s remarks

E&C full committee ranking Democrat Frank Pallone (N.J.) said, “None of us are opposed to transparency in the 340B program…. However, I am concerned that this bill will add additional burdens to covered entities without providing additional clarity to how the program is actually working for patients.”

Pallone said Bucshon’s bill would not give hospitals a chance to describe “quality enhancements they’re making or how they have expanded care in other ways, all of which are allowed under the original mission of the 340B. I’m concerned that if we take a limited view here, the reports produced by this legislation would imply that the program is not providing the benefits that it does, setting the program up for unfair cuts in the future.”

Pallone said he, too, “was deeply concerned” about The New York Times exposé. “However, if this bill were enacted, it would do nothing to detect or uncover additional details or address that situation.” He added that the bill “fails to address” concerns about manufacturer denials of 340B pricing involving contract pharmacies “and instead may be used to draw an inaccurate narrative about the value of the program.”

Eshoo’s remarks

Subcommittee ranking Democrat Eshoo said 340B “has had controversies lately,” noting both The New York Times article and manufacturers’ 340B contract pharmacy pricing denials. “This legislation attempts to bring more transparency to the program. More transparency is always good. But unfortunately, [the bill] adds significant barriers to participation in the program while not addressing … the chief causes of the concerns.”

She said, “The bill requires unworkable reporting elements that are difficult to disaggregate and whose definitions do not necessarily align with … existing required reporting or with electronic health record and billing systems.” It also “requires transparency for one side of the program,” she said. “Drug manufacturers are not required to report comparable data.”

Speaking to Bucshon, she said, “You noted that you’ll work to address some of the inadequacies in the in the legislation. I think that this is a main one. So hopefully we can work together on this under the legislation.”

“I support ensuring that all participants in the 340B program are fulfilling their obligations under the law. That’s a must,” Eshoo said. “But we can’t do that through misguided transparency efforts that are burdensome and could threaten access to care.”

Carter’s remarks

Rep. Buddy Carter (R-Ga.), a pharmacist and former independent pharmacy owner, said “transparency in the 340B program … would help us understand how to improve the program long term, but also showcase instances where providers are using the program well that we may want to reward.”

“We look at transparency and … think, well, it’s only to show where the problems are. But … it can actually show us the benefit…. Instead of looking at the glass and saying it’s half empty, you can look at it and say it’s half full,” he said.

Carter said “hospitals get into the [340B] program through their nonprofit status but provide very little charity care. We know that’s happening. That’s why the pharmaceutical manufacturers are balking on this. It was reported by the New York Times and the Wall Street Journal articles recently. Some hospitals use it to pad their profits while depriving poor communities. Transparency … will show us if this is happening.”

“I invite my colleagues on both sides of the aisle to work with me … as part of a broader effort to make 340B work better for needy patients and their providers,” Carter said. “The 340B program is an excellent program for FQHCs and for rural hospitals. That’s what it was intended for. If we need to address the mission, the original mission, the original definition of what this, and then we should do that. Because … it has turned out to be a boondoggle for large [nonprofit] hospital systems it was never intended for. That’s why the pharmaceutical manufacturers are so upset about this and underline I don’t blame them one bit.”

Joyce’s remarks

Rep. John Joyce (R-Pa.), a dermatologist, said Bucshon’s bill “is not an attack on the 340B program, but rather it is necessary transparency legislation.”

“If Congress is going to address the rising cost of healthcare, we need to make sure that we understand all the incentives that are contributing to these high costs,” he said. “One of the biggest drivers in increasing spending and consolidation over the past decade has been the 340B drug pricing program. Without greater transparency into where the money is going or what those profits are going towards, we can’t begin to address this program and to ascertain whether these funds are being spent correctly…. This legislation is simply a way for Congress to have a better understanding on how these dollars are being used and, if they are indeed a driver, to higher costs.”

Craig’s remarks

Rep. Angie Craig (D-Minn.) said, “No one here is opposed to the concept of more transparency in healthcare…. [But] the reporting requirements outlined in this bill would place unnecessary burdens [on 340B entities] and would do little to provide insight into how 340B savings are used to get resources to patients.”

“We need to make it easier for hospitals and healthcare providers to manage rising prescription drug costs, not weaken the very program that’s helping them,” Craig said. “This bill places burdensome new reporting requirements on hospitals and could make it easier for bad actors to tear down the 340B program…. It’s my hope that we can come together on this issue to strengthen the integrity of the 340B program and to do so in a bipartisan manner.”

Kuster’s remarks

Rep. Ann Kuster (D-N.H.) said, “The 340B drug discount plays an essential role in the delivery of care in rural areas and to vulnerable populations in my district. Healthcare providers rely upon 340B to spread scarce resources and continue to serve as the healthcare safety net for many rural communities. This bill would distract from the true purpose of 340B, which is to support patient care.”

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