E&C 340B
House E&C Democrat Scott Peters (Calif.) spoke in favor of, and fellow Democrat Debbie Dingell (Mich.) spoke against, a Republican bill to impose reporting requirements on 340B DSH hospitals.

House GOP Rejects Democrats’ Push to Link 340B Transparency and Contract Pharmacy

Congressional GOP backers of federal reporting requirements for 340B hospitals yesterday rejected Democratic arguments that fairness dictates that those requirements be paired with 340B contract pharmacy requirements for drug manufacturers.

U.S. House Energy & Commerce Committee Republicans, joined by just one committee Democrat, approved Rep. Larry Bucshon’s (R-Ind.) 340B Transparency Act, H.R. 3290, and sent it to the full House for further action. The vote was 29-22. The bill would give the U.S. Secretary of Health and Human Services the option to impose 340B reporting requirements on other types of covered entities.

The committee also voted unanimously, 49-0, to pass a different bill, H.R. 3561, with language that will force providers to bill Medicaid managed care plans or their pharmacy benefit managers for drugs—including 340B acquired medicines—at ingredient cost plus a dispensing fee. The law would give states the option to let 340B providers bill at above cost and keep the spread. If this happens, they will have to tell the federal government annually how much they make from billing at above cost and the amount would be posted on a searchable federal website.

There was impassioned debate on the 340B hospital transparency bill but not a word about the language in H.R. 3561 that affects billing Medicaid MCOs for 340B drugs. Before either bill could become law, the full House and full Senate would have to pass and President Biden would have to sign them. That leaves plenty of time for more lobbying.

The current versions of the bills, as passed yesterday with amendments, were not yet posted on the Congress.gov website as of this morning. The up-to-date version of H.R. 3290 will soon be available here and of H.R. 3561 here. H.R. 3561 was referred also to the Ways and Means and Education and Workforce committees. There has been no action on it in either panel.

Hospital groups sent the E&C committee’s Republican and Democratic leaders a joint letter Tuesday urging them to oppose Bucshon’s bill and to support amending H.R. 3561’s 340B language. Health center and 340B grantee entity groups also lobbied for changes to H.R. 3561. They were especially concerned about language in it that could be interpreted to disallow billing Medicaid MCOs at above cost for 340B drugs when dispensed by contract pharmacies.

Drug manufacturers’ denials of 340B pricing involving drug shipments to more than one contract pharmacy came up often during the debate leading up to the vote on Bucshon’s bill. Rep. Frank Pallone (N.J.), the committee’s ranking Democrat, said the bill’s silence on the subject “further underscores that this legislation is not a serious bipartisan effort.”

“To strengthen the 340B program … necessarily would require us to address the issue of contract pharmacies,” he said.

Bucshon, a heart surgeon, called that argument “a red herring.”

He said the “contract pharmacy situation is something we need to address but the proposal from my Democrat colleagues is an attempt to totally undermine this transparency legislation…. The bill today is just about transparency in the program. If we want to talk more reforms, that’s a separate conversation.”  During last week’s E&C health subcommittee hearing said the contract pharmacy matter needs to be first addressed by the federal courts.

Hospital group 340B Health, during two days of lobbying on Capitol Hill in late April, told members of Congress and their staffs that E&C Democrat Doris Matsui (Calif.) was working on bipartisan legislation to prohibit drug manufacturer restrictions on 340B covered entities’ use of contract pharmacies.

But during yesterday’s markup of Bucshon’s bill, Matsui said nothing about her bill nor anything about 340B contract pharmacy. She faulted Bucshon’s bill instead for creating “onerous reporting requirements that do not align with the intent of the 340B program” and that “would provide an incomplete picture of the program.”

Bucshon said a short while later, “this whole argument about onerous reporting, does anybody believe that an organization that runs an operation doesn’t know every line of their balance sheet? … They already have to have all the information to show community benefit, charity care and all that. They already know all this.”

“It befuddles me why on just a simple bill like this, there’s so much pushback. It just befuddles me. I can’t quite understand it,” he said.

Rep. Buddy Carter (R-Ga.), a pharmacist and former pharmacy owner, said Bucshon’s bill will not be the final word on 340B in Congress.

“This is not the last time you’re going to hear about 340B,” he said. “We know there are known issues around lack of hospital charity care, PBMs pickpocketing, and general program integrity gaps that are right for us to work together to fix…. I want to work with Dr. Bucshon and other colleagues in a bipartisan way to address additional 340B issues.”

Rep. Scott Peters (Calif.), the sole Democrat to vote for Bucshon’s bill, agreed with Republicans that 340B contract pharmacy and 340B hospital transparency were separate issues.

“We have every right and responsibility to know where the money’s going and I think that that’s what this bill is about,” he said. “On the contract pharmacy issue, I’m happy to work with anyone on that,” he said. “If there’s abuse on the industry side, that’s … a separate issue from this.”

Peters is the former city council president of San Diego, one of the country’s top biopharmaceutical hubs. He noted that he and Bucshon sponsored a bill in 2017 that would have suspended DSH hospital and child site enrollment in 340B for two years in addition to imposing 340B reporting requirements on DSH, children’s, and free-standing cancer hospitals.

“He’s not asking for [the two-year suspension] this time,” Peters said. “He’s just asking for where the where the money’s going. I know that we can come together as Republicans and Democrats to work on some thoughtful reforms. But we can’t do that if we’re in the dark about where the money is.”

“I’m particularly worried about the evidence we’ve seen that some large systems may use 340B in affluent areas, diverting care away from underserved communities,” Peters said. “And that practice violates the spirit of the program. Unfortunately, in some well documented instances, this has contributed to questionable use of taxpayer dollars and the deaths of some patients. We need to do more. Recent reporting has shown quite clearly what happens when the program strays from patients and becomes about profits.”

“I urge my colleagues to join and vote for this transparency,” Peters concluded. But none of his fellow Democrats did.

Rep. Debbie Dingell (D-Mich.) said immediately after Peters spoke, “We have significant concerns that this bill will undermine the purpose of 340B and constrain hospitals’ ability to meaningfully serve vulnerable communities.”

“The bill will create onerous reporting requirements for hospitals,” Dingell said. “Not only will these requirement create additional costs. But they don’t capture the full scope of how 340B is helping patients. I fear that the narrow focus on charity care will obscure the true value of 340B in communities nationwide.”

“We must continue working to achieve the transparency we all agree that we need,” Dingell said, but “in a way that does not curtail hospitals’ ability to carry out the important mission of 340B.”

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