Reps. David McKinley (R-WV) and Abigail Spanberger (D-VA) introduced legislation today to address so called pickpocketing of 340B provider savings and establish a clearinghouse to address duplicate discounts.

News Alert: Bipartisan Bill Introduced to Protect 340B Providers From Reimbursement Cuts and Address Duplicate Discount Challenge

Reps. David McKinley (R-WV) and Abigail Spanberger (D-VA) introduced the PROTECT 340B Act today, which would prohibit pharmacy benefit managers (PBMs) and other third-party payers from paying 340B providers below-market rates or engaging in other perceived discriminatory contracting practices. While several states have enacted legislation to address this matter, provider groups believe that federal legislation is needed.

The bill also would require the U.S. Department of Health and Human Services (HHS) to contract with a “neutral third-party” to serve as a claims data clearinghouse to protect drug manufacturers from giving Medicaid rebates and 340B discounts on the same drugs.  This provision, along with the discriminatory reimbursement protections, may attract support from some drug manufacturers.  A number of pharmaceutical companies have contracted with private third-party vendors to serve as a clearinghouse but these initiatives are viewed with suspicion by 340B providers who consider the vendors to have a conflict of interest.

McKinley serves on the House Energy and Commerce Committee (E&C), the committee that has jurisdiction over the 340B program.  If the bill gains momentum, it would likely be first taken up by the E&C Committee. The bill does not address the current contract pharmacy stalemate that is being litigated in various federal courts. 

 “The 340B drug pricing program is a vital part of many rural and underserved areas. Without it, many providers would not be able to provide critical services and low-cost medicine to the communities they serve,” McKinley said. “Yet, actions taken by big pharmaceutical companies and middlemen have jeopardized the ability of clinics and hospitals to provide vital services.

“The 340B program allows Central Virginia clinics and hospital systems to provide lower-cost prescription drugs for our region’s patients — especially those in rural communities. However, the rising trend of 340B ‘pick-pocketing’ by third parties threatens to undermine these savings and put the financial security of patients and providers at risk. Congress did not intend for 340B savings to subsidize for-profit insurance companies and pharmacy benefit managers,” said Spanberger. 

“Our bipartisan bill would hold health insurance companies and PBMs accountable for trying to unfairly target and raid these savings. By leveling the playing field for 340B pharmacies and providers, our bipartisan bill would help protect the availability of discounted prescription drugs at Virginia hospitals, HIV/AIDS clinics, and rural healthcare providers, she added.

Both McKinley and Spanberger have been long-time champions of the 340B program and have been actively engaged in efforts to protect 340B providers from what they believe to be efforts to undermine the program. The legislation has received endorsements from a number of 340B provider organizations including Ryan White Clinics for 340B Access (RWC-340B), state associations of community health centers, the National Association of Community Health Centers (NACHC) and several national hospital associations.

RWC-340B and health center organizations played a particularly key role in advocating for the legislation.  “RWC-340B enthusiastically supports the legislation because it prevents for-profit PBMs and insurers from diverting the 340B benefit away from safety net clinics,” said RWC-340B President Shannon Stephenson.  “Representatives McKinley and Spanberger are again showing their unfailing leadership to support 340B safety net providers so we can continue to improve health care for our communities,” Stephenson added.  “States are leading the charge.  West Virginia, my home state of Tennessee, and more than a dozen other states recently passed similar laws; this federal legislation is the next logical step to protect 340B nationwide,” she said.

 “On behalf of our nation’s 1,400 Community Health Centers and their 30 million medically-underserved patients, I enthusiastically support the PROTECT 340B Act of 2021,”  said Colleen Meiman, National Policy Advisor for state associations of Community Health Centers (CHCs).   “This bill will ensure that 340B savings remain where Congress intended – with CHCs and other safety net providers, who use them to expand access to care for low-income and underserved patients.  For too long, PBMs and private insurers have been able to ‘pick-pocket’ these savings away from CHCs, using them to line their own pockets.” Meiman worked for NACHC for a number of years and also served in senior positions at the U.S. Health and Resources Services Administration.

The news release, which includes endorsements from other 340B stakeholders is located here.  The legislation does not have a bill number yet.

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