Senate 340B RFI
A bipartisan group of six U.S. senators today sought 340B stakeholders' best advice on subjects including 340B contract pharmacy, duplicate discount prevention, accountability, and ensuring that program benefits accrue to covered entities and their patients.

News Alert

Six Democratic and Republican U.S. Senators Ask 340B Stakeholders for “Bipartisan Policy Solutions”

Six Democratic and Republican U.S. senators this morning asked 340B drug pricing program stakeholders for input on “bipartisan policy solutions that would ensure the program has stability and oversight to continue to achieve its original intention of serving eligible patients.”

The six lawmakers, led by Sen. John Thune (R-S.D.), the Senate’s second ranking Republican, have a history of advocating on behalf of 340B providers.

“Our goal is to ensure the 340B program has improved integrity and stability, and that it continues to enable eligible health care providers to stretch scarce federal resources to better provide healthcare for the patients they serve,” the June 16 letter said. “We encourage stakeholders to provide information that will help Congress further the original intent of the program, strengthening the program’s ability to support entities serving eligible patients.”

The letter specifically “request[s] information from stakeholders regarding possible bipartisan policy solutions to provide certainty and commonsense improvements to the operation and oversight of contract pharmacies in the 340B program.”

July 28 is the deadline for submissions. “Our intent is to keep these responses internal and they will not be posted publicly,” the letter said.

The senators also ask for input

  • “on ways to improve accountability of covered entities in the program and ensure there is adequate appropriate transparency”
  • “on proposals to ensure adequate claims information exists to prevent [340B] duplicate discounts from occurring.”

The letter poses these six sets of questions for stakeholders:

  • What specific policies should be considered to ensure [the U.S. Health Resources and Services Administration] can oversee the 340B program with adequate resources? What policies should be considered to ensure HRSA has the appropriate authority to enforce the statutory requirements and regulations of the 340B program?’
  • What specific policies should be considered to establish consistency and certainty in contract pharmacy arrangements for covered entities?”
  • What specific policies should be considered to ensure that the benefits of the 340B program, accrue to covered entities for the benefits of the patients they serve, not other parties?”
  • What specific policies should be considered to ensure that accurate and appropriate claims information is available to ensure that duplicate discounts do not occur?
  • What specific policies should be considered to implement common sense, targeted program integrity measures that will improve the accountability of the 340B program and give health care stakeholders greater confidence in its oversight?
  • What specific policies should be considered to ensure transparency to show how 340B health care providers’ savings are being used to support services that benefit patients’ health?

The GOP senators are Thune, Jerry Moran (Kan.), and Shelly Moore Capito (W. Va.) and the Democrats are Tammy Baldwin (D-Wis.), Debbie Stabenow (D-Mich.), and Ben Cardin (D-Md.). During the last session of Congress, Thune, Capito, Baldwin, Stabenow and Cardin teamed up with Sen. Rob Portman (R-Ohio, now retired) on 340B matters, including writing letters condemning drug manufacturer restrictions on 340B contract pharmacy and getting legislation passed that protected some hospitals from losing their 340B eligibility during the COVID-19 pandemic.

The letter’s description of 340B’s purpose is consistent with the one advanced by national 340B provider groups. Drug manufacturers and some in Congress favor narrowing 340B’s focus to indigent patients.

The senators’ request for input on 340B comes less than a month after the House Energy & Commerce Committee passed Republican legislation to impose significant 340B program reporting requirements on hospitals and possibly other covered entities. On Monday, E&C Chair Cathy McMorris Rodgers (R-Wash.) and Senate Finance Committee ranking Republican Mike Crapo (Idaho) solicited public comments on what’s driving the increase in drug shortages, including “What role, if any, has growth in the 340B program played in drug shortage trends?” Democratic E&C committee member Doris Matsui (Calif.), meanwhile, reportedly is seeking a Republican co-sponsor for a bill she is working on to prohibit drug manufacturer restrictions on 340B covered entities’ use of contract pharmacies.

The six senators’ letter is a strong sign they are interested in drafting a 340B bill. It could slow down the 340B initiatives mentioned above and any new ones in Congress. Some 340B provider advocates speculate that the six senators acted now partially to keep Senate Health, Education, Labor, and Pensions Committee ranking Republican Bill Cassidy (La.) from doing something detrimental to 340B hospitals.

On the contract pharmacy matter, the six senators’ letter notes that while HRSA issued guidance on the subject more than a decade ago, the 340B statute “is silent on the issue, resulting in ambiguity in the treatment of drugs dispensed through contract pharmacies.”

The senators say they have heard from health care providers “about the disruption and negative impacts” of drug manufacturers’ withholding of 340B discounts on their drugs dispensed at contract pharmacies. “The manufacturers’ decision have resulted in ongoing litigation and enforcement actions,” they wrote. “We do not seek to take a position with respect to specific legal questions in ongoing litigation. Instead, we seek to provide 340B hospitals, health centers, and other essential safety-net providers with certainty regarding the allowable use of contract pharmacies.”

Shannon Burger, president of Ryan White Clinics for 340B Access and CEO of 340B provider Cempa Community Care in Tennessee, said, “We enthusiastically applaud this group of senators for their leadership in advancing the public policy conversation on 340B and welcome productive discussions.”

“These senators are some of the most knowledgeable and thoughtful people in Congress on the importance of preserving and protecting the 340B program for safety-net providers like Ryan White Clinics and the communities we serve,” Burger said. She added, “These senators respect two fundamental truths: the 340B program is the backbone of public health in our nation and it is not funded through state or federal taxpayer dollars.”

Maureen Testoni, president and CEO of hospital group 340B Health, said, “We look forward to working with [the six senators] on approaches” to safeguarding and strengthening 340B.

She said “the actions of more than 20 drug manufacturers are undermining the integrity of 340B by limiting access to life-saving medications through 340B hospital pharmacy partners. Any effort to strengthen 340B must reinstate hospitals’ ability to engage with multiple pharmacies to serve their patients and must not undermine other aspects of 340B that are working as intended.” 

Testoni added that “policymakers also must safeguard 340B from discriminatory payment policies by pharmacy benefit managers (PBMs) and other payers. We look forward to working closely with these congressional leaders to advance policies that protect 340B hospitals and the patients in need who rely on them.” 

Vacheria Keys, director of policy & regulatory affairs at the National Association of Community Health Centers, said, “On behalf of health centers nationwide, NACHC appreciates the leadership of the bipartisan Senate 340B working group members. These members are strong health center champions, and today’s action reinforces their commitment to taking proactive steps toward stabilizing the 340B program for the safety net. It is encouraging to see the work of ASAP 340B change the conversation in Washington, D.C. For the last two years, health centers have advocated for permanent relief from the attacks on the 340B program. We look forward to responding to this RFI and demonstrating health centers’ willingness to come to the table to discuss comprehensive reforms to the program.”

NACHC this early this year formed an alliance with Pharmaceutical Research and Manufacturers of America, under the banner ASAP 340B, to promote a common 340B reform agenda perceived as tilted against 340B hospitals. Hospital groups and other national 340B provider groups have criticized the alliance. It has created a rift among such groups.

The American Hospital Association this morning said it will respond to the senators’ request for information but had no other comment.  Other groups that represent 340B entities did not immediately respond to requests for comment. Nor did PhRMA.

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