The 340B Program’s Current State of Play

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Despite calls for reform by opponents, 340B enjoys broad bipartisan support.  On the legislative front, lawmakers have introduced multiple bills in the House and Senate that, if enacted, would alter program operations.  Multiple court cases regarding contract pharmacy use are working their way through the judicial system.  Coalitions for and against changes are continuing to make their best case in front of Congress and federal regulators.  In the current environment, AIDS Healthcare Foundation navigates these complex political and legal challenges to ensure 340B functions as a health and wellness multiplier for its over 56,000 patients living with HIV.   

A flurry of 340B-specific legislation and broader healthcare reform packages find themselves in different stages of the legislative process.  In the House, The PROTECT 340B Act of 2023, sponsored by Reps. Abigail Spanberger (D-VA) and Dusty Johnson (R-SD), has attracted 16 co-sponsors, but has yet to receive a vote and remains stuck in committee; the bill prohibits pharmacy benefit managers from discriminating against 340B covered entities and their pharmacies.  Introduced in early January, Rep. Matt Rosendale’s (R-MT) Drug Pricing Transparency and Accountability Act would establish a two-year moratorium on new non-rural hospitals and their child sites from participating in 340B.  The legislation has no co-sponsors and has not received a vote in any committee. 

By far, the bill with the most action in the House is the brainchild of Rep. Larry Bucshon (R-IN).  The unnamed H.R. 3290 advanced from the Energy and Commerce Committee (E&C) on a party-line vote, 29-22, in May.  The legislation adds new reporting requirements for 340B covered entities.  If enacted, providers must report the number and percentage of patients who receive 340B priced drugs and how they use their 340B savings.  The Lower Costs, More Transparency Act, sponsored by E&C Committee Chair Cathy McMorris Rodgers (R-WA), mainly tackles reimbursement issues with PBMs, but has provisions that will affect 340B providers.  Critics claim the bill would layer burdensome reporting requirements onto covered entities.  Overall, with a divided Congress and a Democratic president, the political status quo remains a more likely outcome than significant changes to 340B.       

Fewer 340B-specific bills have bubbled up in the upper chamber, as the Senate instead focuses on wider-ranging healthcare reform legislation.  Sen. John Kennedy (R-LA) introduced the 340B Reporting and Accountability Act in April.  The bill has no cosponsors and remains stuck in committee with no vote in sight. Action in the Senate centers around a request-for-information authored by a bipartisan cadre of six senators; among other questions, the RFI asks 340B stakeholders for specific policy proposals that could improve program oversight, a frequent ask from drug companies, and policy specifics to establish certainty in contract pharmacy arrangements, a common refrain by covered entities. 

Legislation sponsored by the bipartisan group would be influential, as these longtime 340B supporters have credibility when it comes to how 340B functions.  Of note, 2-of-the-6, Sens. Ben Cardin (D-MD) and Debbie Stabenow (D-MI) will retire in 2024, requiring prospective legislation to move fast. 

The bipartisan approach extends to the Senate’s primary healthcare goal as well. Both sides of the aisle want PBM reform.  Multiple bills introduced would ban spread pricing, the PBM practice that siphons off 340B savings intended for providers.  Covered entities welcome the prohibition.  Providers, however, remain in a wait-and-see approach over potential 340B-related amendments attached to comprehensive PBM-reform legislation.     

The most important issue for providers is the rapid onslaught of contract pharmacy restrictions. From 2020 onward, over two dozen drug companies have limited access to the number ofprescriptions available at 340B prices.  HRSA now finds itself unable to enforce its guidelines allowing unlimited use of contract pharmacies.  Drug makers filed multiple lawsuits, resulting in legal ambiguity that ties the hands of federal regulators. 

On January 30, 2023, the Third Circuit Court of Appeals ruled in favor for drug manufacturers in Sanofi Aventis U.S. LLC v United States Department of Health and Human Services.  The court said drug makers have no obligation to provide drugs at 340B prices to an unlimited number of contract pharmacies.  Providers await decisions in similar cases in the D.C. Circuit and Seventh Circuit.  If the appellate courts produce a split decision, then the matter could be decided at the U.S. Supreme Court. 

Provider groups also must counter opponents lobbying to dismantle 340B.  In March 2023, a new player emerged, ASAP 340B.  According to John Hassell, AHF’s National Director of Advocacy, “ASAP 340B is not a reform-minded coalition.  It is a group of drug company funded organizations spearheaded by PhRMA.  If its policy priorities became a reality, the result would drastically shrink 340B, if not end the program.”

Good news for providers – 340B-specific bills appear stalled in both chambers.  Yet, prospective changes to the program remain possible.  340B legislative language could still be inserted into must-pass legislation.  As such, AHF remains vigilant in the fight to protect 340B.

This article was written by John Arcano, policy analyst, at AHF. For more information about AIDS Healthcare Foundation, visit www.ahf.org

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