HHS Secretary Xavier Becerra yesterday expressed "strong support" for the 340B program in a drug pricing report to the White House, but recommended no changes to the program.

In Largely Symbolic Move, Becerra Expresses “Strong Support” for 340B in Drug Pricing Plan

U.S. Health and Human Services Secretary Xavier Becerra yesterday reiterated HHS’ “strong support for the 340B Drug Pricing Program” in a 29-page plan to lower drug prices.

Becerra’s Sept. 9 report to White House domestic and economic policy counselors comes as congressional Democrats begin marking up bills to implement their and President Biden’s Build Back Better plan, which is expected to include steps to make medicines more affordable. 340B covered entities worry that some reforms under consideration could weaken the 340B program and the wider health care safety net.

Unlike the May 2018 Trump administration drug pricing blueprint that criticized the 340B program and called for significant reforms, the Biden document embraces 340B. Nonetheless, the document only offers bromides.

Becerra’s drug pricing plan recommends no changes to 340B, and its two-paragraph passage about 340B is mostly descriptive. It says 340B entities “serve a diverse cross-section of the nation’s safety net population and utilize the 340B Program to address health equity by expanding the provision of under-reimbursed and often scarce services, such as behavioral health, HIV/AIDS treatment, and addiction services for otherwise underserved populations.”

The report’s only nod to a current 340B flashpoint is its statement that 340B-purchased drugs are “dispensed through the entities’ own in-house pharmacies or through contract arrangements with commercial pharmacies to eligible patients.”

Eight drug manufacturers to varying degrees have stopped providing 340B discounts when covered entities use contract pharmacies. Six are suing HHS over the department’s finding that the companies are breaking the law and must repay entities for overcharges or possibly incur civil monetary penalties. Industry trade association Pharmaceutical Research and Manufacturers of America (PhRMA), meanwhile, is suing HHS over its new 340B administrative dispute resolution (ADR) process.

Groups that represent 340B hospitals praised Becerra yesterday and used the opportunity to urge the U.S. Centers for Medicare and Medicaid Services (CMS) to reverse its proposal to maintain deep Medicare Part B cuts to 340B hospitals. Comments on the proposal are due next week Friday, Sept. 17.

America’s Essential Hospitals yesterday thanked the Biden administration for “strongly supporting” 340B in Becerra’s report.

“We appreciate this recognition and agree enthusiastically with it,” Essential Hospitals Senior Vice President of Policy and Advocacy Beth Feldpush said. “But policies put in place before the current administration—especially deep and damaging cuts to Medicare outpatient payments to 340B hospitals—hinder the program’s ability to deliver the benefits we both agree it provides.”

“As policymakers consider ways to rein in runaway drug prices, we urge them to end harmful policies that undermine the 340B program and protect it from new attempts to weaken the access and equity it creates for low-income patients,” Feldpush said.

340B Health applauded Biden, Becerra, and HHS on social media for the report’s support for 340B.

Spread Pricing Remains a Concern in Congressional Bills

House Energy & Commerce Committee Democrats late yesterday afternoon released a fact sheet saying that prescription drug pricing would fall under its portion of the Build Back Better plan. The fact sheet said the plan includes House Democrats’ drug pricing bill, H.R. 3.

H.R. 3 includes “spread pricing” language that entities say would eliminate their revenues from billing Medicaid managed care organizations at above acquisition cost for 340B-purchased drugs. H.R. 3 also would require Medicare to negotiate prices with drug manufacturers for expensive and commonly used drugs. 340B entities are telling members of Congress that they support lowering drug prices but worry about unintended consequences that would reduce their 340B savings.

The E&C committee said it will mark up its portion of the Build Back Better plan on Monday, Sept. 13.

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