Rep. Dusty Johnson (R-SD) and Rep. Abigail Spanberger (D-VA) headshots
U.S. Reps. Dusty Johnson (R-S.D.) and Abigail Spanberger (D-Va.) reintroduced legislation to protect 340B covered entities, contract pharmacies, and individuals with private insurance from discrimination by pharmacy benefit managers and insurance companies.

News Alert

Spanberger and Johnson Reintroduce PROTECT 340B Act in Congress

A Virginia Democrat and South Dakota Republican this afternoon reintroduced bipartisan legislation in the U.S. House to protect 340B covered entities and contract pharmacies from discrimination by insurers and pharmacy benefit managers.

Reps. Abigail Spanberger (D-Va.) and Dusty Johnson (R-S.D.) announced their co-sponsorship of the PROTECT 340B Act of 2023 in a news release. Johnson succeeds ex-Rep. David McKinley of West Virginia as the bill’s main GOP backer. McKinley was defeated in a primary election in May 2022. Spanberger was the lead Democrat on the bill in the previous session of Congress.

There is no companion bill in the Senate so far. Sen. Tim Kaine (Va.) is often mentioned as the likely Democratic sponsor in that chamber.

The new version of the PROTECT 340B Act appears to be almost identical to the last one, which had more than 100 sponsors. One difference is that the new version prohibits discrimination against individuals with health insurance. The old version protected entities and contract pharmacies only.

“The PROTECT 340B Act would prohibit health insurers and PBMs from discriminating against 340B providers or their contract pharmacies on the basis of their status as providers or pharmacies that dispense 340B drugs,” Spanberger and Johnson’s news release said. “Specifically, the Spanberger-Johnson legislation would prevent companies from treating 340B providers differently with regards to reimbursement of fees, participation in standard or preferred networks, or inventory management systems—and it would block them from interfering in a patient’s choice to receive drugs from a 340B pharmacy.”

Like the last version, this one also would direct federal health officials to contract with an independent body to review 340B drug claims retrospectively for duplicate discounts. Currently, many drug manufacturers have contracted with third party vendor 340B ESP to fill this role. Proponents of the PROTECT 340B Act argue that it would be fairer to have a neutral clearinghouse selected by the government rather than the drug industry. In addition, the claims review would be limited to Medicaid claims which providers argue is the only area where there is a potential for a Medicaid duplicate discount. A duplicate discount occurs when a drug manufacturer is subject to both an upfront 340B discount and a subsequent rebate to the state Medicaid agency.

Multiple groups that represent 340B covered entities applauded the bill’s reintroduction—including the National Association of Community Health Centers. NACHC has caused waves last month for announcing an alliance on 340B reform with Pharmaceutical Research and Manufacturers of America. NACHC and PhRMA’s 10-point agenda includes PBM 340B anti-discrimination language different from that in the PROTECT Act. It was unclear if NACHC was going to back this new version of the PROTECT ACT or advocate strictly for what its joint agenda with PhRMA has to say about PBMs.

“Health centers nationwide depend on the 340B program to provide affordable medications and comprehensive health care services to the 30 million patients they serve,” NACHC Interim President & CEO Rachel Gonzales-Hanson said. “Unfortunately, pharmaceutical benefit managers are threatening the long-term stability of these services by siphoning off savings that should be going to health centers. NACHC supports the PROTECT 340B Act as a first step to broader reforms to the 340B program.”

NACHC’s support for the bill, which does not yet have a number, reunites it on this issue with 340B provider groups from which it is now estranged.

Spanberger and Johnson’s news release included endorsements from America’s Essential Hospitals, 340B Health, and the American Society of Health-System Pharmacists. Those groups plus the American Hospital Association, the Association of American Medical Colleges, the Catholic Health Association of the United States, and the Children’s Hospital Association issued a joint statement on March 20 denouncing NACHC and PhRMA’s alliance.

Spanberger and Johnson’s news release also includes testimonials from the National Rural Health Association, AIDS United and a number of state and local health care organizations.

“The 340B Program lowers prescription drug costs and saves money for seniors and families, especially those in rural and underserved communities. But in recent years, we’ve seen for-profit insurance companies and the shadowy middlemen of the pharmaceutical industry—known as pharmacy benefit managers—undermine these discounts, target 340B providers, and threaten the very survival of this program,” said Spanberger. “The PROTECT 340B Act would hold these actors accountable for trying to take away the savings of American consumers. I want to thank my colleague Congressman Johnson for his partnership on this issue, and we’ll keep working to level the playing field for 340B pharmacies and providers, maintain access to discounted medications, and protect the financial security of patients in Virginia and across the country.”

“340B is an essential program for rural and low-income hospitals and patients,” said Johnson. “South Dakotans rely on this program to access affordable drugs and medicines they need. The PROTECT 340B Act will ensure the quality of care for communities that need it.”

Colleen Meiman, an independent 340B policy expert with decades of experience with community health centers, helped gather support for both the original and new version of the bill. “It represents the critical first step in addressing the many assaults on this essential program,” she said.

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