Senator Mike Braun (R-IN) has introduced legislation to let the government audit 340B entities to determine how they use net income from 340B savings.

News Alert: New Senate Bill Would Let HRSA Audit 340B Providers to See How They Use 340B Net Income

U.S. Sen. Mike Braun (R-Ind.) introduced legislation last night to let the federal government audit 340B covered entities to determine how they use net income from drugs bought under the 340B program.

Braun filed the bill late yesterday. According to his office, its purpose is “to ensure that the net income from purchases under the 340B program benefits low-income and uninsured patients of all covered entities.” Unlike some of the other recent legislation targeting 340B covered entities, this bill would apply to all 340B provider categories not just hospitals. Over the years, Braun has advocated for a number of 340B reforms that are backed by the drug industry.  So far, he has not been able to garner bipartisan support for his efforts. 

The Biden administration proposed giving the U.S. Health Resources and Services Administration (HRSA) the expanded audit authority in May in its fiscal 2022 budget request for HRSA, upsetting covered entity groups that consider the administration an ally. Those groups are expected to fiercely oppose Braun’s bill. The drug industry and some congressional Republicans argue that 340B entities should be required to pass along all their 340B program savings to indigent, uninsured, and underinsured patients. Covered entities and other members of Congress from both parties argue that 340B was designed to let entities use 340B savings to serve patients and their communities more broadly.

Congress is embroiled in a massive battle over the administration’s Build Back Better plan intended to address a number of Democratic domestic priorities including lowering drug prices. The current fiscal year ends on Sept. 30 and no appropriations bills have been passed. Congress also needs to pass legislation raising the federal debt ceiling. In this environment, it’s possible that Sen. Braun may try to attach the legislation to the bill as part of bigger bargain to get the must-pass legislation enacted or as a messaging amendment. 

However, this move would be unlikely to succeed.  It does not appear that Braun’s 340B legislation has support from any Democrats; and Republicans have vowed to oppose the overall spending bill as well as legislation to raise the debt ceiling.

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