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Imagine you’re at the airport waiting to board your flight, and you’re looking at your phone. New headlines come through your email regarding 340B legislation, CMS reimbursement proposals, and the latest developments on state contract pharmacy laws. Any one of these three paths can alter a covered entities (CEs) 340B program outlook – be it on a financial basis or a compliance basis. CEs have been receiving notices like these more frequently in the last couple of years. The 340B landscape is constantly shifting and you need to be able to continue to quickly adapt.
Since 340B’s inception, the program’s operational rules governing patient eligibility, contract pharmacy use, duplicate discounts and other key matters have been shaped by sub-regulatory guidance. Over the past few years, manufacturers and providers have increasingly turned to the courts to challenge policies they believe are unfair.
The Congressional Path
To address various areas of contention over the program, Congress has expressed a growing interest in tackling 340B reform. There are three comprehensive 340B bills pending in Congress. The SUSTAIN 340B Act, introduced by a bipartisan group of six U.S. Senators, the SECURE 340B Act, introduced by a bipartisan group of U.S. House members, and the 340B Drug Pricing Integrity and Affordability for Patients Act, a discussion draft introduced by Sen. HELP Committee Chair Bill Cassidy (R-LA). 1, 3, 5 SUSTAIN largely preserves the traditional 340B model, SECURE would restore access to some contract pharmacy relationships and has some other provisions supported by 340B providers but includes a significant number of new provider reporting requirements and other new restrictions, and Senator Cassidy’s discussion draft proposes the most significant changes, focused on program integrity, oversight, and manufacturer flexibility. 2, 4, 6 The discussion draft has received pushback from 340B provider organizations.
Though each of the proposals differ in their treatment of rebate models, contract pharmacy arrangements, child site eligibility, and patient definition, they share a common thread: new expectations surrounding documentation, data transparency, and program oversight. Policy specifics may vary, but all plans lead back to the same destination: a CEs ability to demonstrate compliance, defend program decisions, and build the governance today to be better positioned to adapt tomorrow. At the same time, more and more states have enacted or are considering legislation to require CEs to report more details on how they are using their 340B savings.
The CMS Reimbursement Path
A second path is lining up on the 340B runway: CMS reimbursement policy. CMS has proposed cutting reimbursement for most 340B-purchased drugs at Average Sales Price (ASP) minus 33.4% instead of ASP plus 6%.7 If the proposal is finalized, it would create significant financial challenges for many 340B hospitals. However, the impact will not be the same for every hospital because it will depend on their outpatient service mix.8,9 Hospitals with high utilization of high-cost outpatient drugs, particularly in oncology, infusion, and other provider-administered specialty drug service lines, may experience a much bigger financial hit than those hospitals whose outpatient service mix is more heavily weighted towards non-drug services. While the final CMS rule has not been published yet and there could be further changes to the reimbursement rates, hospitals need to get prepared since they will go into effect on Jan.1.
The State Path
A third path continues to advance at the state level. Contract pharmacy laws, protections against claims data requirements and litigation are creating a growing patchwork of requirements that CEs must navigate regardless of federal action. A growing number of states have enacted laws intended to protect contract pharmacy access and reduce the claims requirement burden, while manufacturers continue challenging many of those laws in court. This is resulting in varying requirements across jurisdictions.10
Several states have adopted both contract pharmacy protections and provider reporting obligations, further contributing to the complexity.15 CEs need to monitor state-specific developments, maintain flexible policies and procedures that can adapt as requirements change, and establish clear ownership for interpreting regulatory changes and updating operations. Adaptability and visibility are becoming increasingly important as state-level activity continues to influence pharmacy operations independent of federal action.10,11
Each path brings different risks and requirements, yet all rely on the CEs ability to understand its data, support its decisions, and respond to change. The common thread is not predicting which path reaches the runway first but having the capabilities to remain strong under any scenario. Claims-level analytics, contract pharmacy performance reporting, and exception monitoring can provide visibility into financial and operational impacts, while robust documentation and audit trails help support operational decisions. Clearly defined ownership, recurring review processes, state-specific escalation procedures, and change-management workflows can help organizations respond efficiently as requirements evolve. Enhancing visibility across key operations and supporting strategic decision-making are critical, regardless of which initiative reaches the runway first. In today’s environment, readiness may be the most sustainable strategy.
Sources
1 Strategic Health Care. SUSTAIN 340B Act: detailed legislative summary. August 5, 2026. Accessed August 29, 2026. https://strategichealthcare.net/wp-content/uploads/2026/08/080526-SUSTAIN-340B-Act-Detailed-Summary-Revised.pdf;
2 SUSTAIN 340B Act: hospital impact and key changes. Healthcare Financial Management Association. August 5, 2026. Accessed August 29, 2026. https://www.hfma.org/operations-management/sustain-340b-act-hospital-impact/
3 SECURE 340B Act, HR 9599, 119th Cong, 2d Sess (2026). July, 6, 2026. Accessed August 29, 2026. https://www.congress.gov/bill/119th-congress/house-bill/9599
4 Wilkinson CA, Arville AJ, Melanson LM, Tam JS. The future of 340B: new bills offer competing solutions to modernize the 340B drug discount program. Health Law Advisor. July 15, 2026. Accessed August 29, 2026. https://www.healthlawadvisor.com/the-future-of-340b-new-bills-offer-competing-solutions-to-modernize-the-340b-drug-discount-program
5 340B Drug Pricing Integrity and Affordability for Patients Act, discussion draft, § 2 [2026]. US Senate Committee on Health, Education, Labor and Pensions. June 25, 2026. Accessed August 27, 2026. https://www.help.senate.gov/imo/media/doc/340b_drug_pricing_integrity_and_affordability_for_patients_act_discussion_draftpdf.pdf
6 US Senate Committee on Health, Education, Labor and Pensions. Section-by-section summary: 340B Drug Pricing Integrity and Affordability for Patients Act discussion draft [2026]. June 25, 2026. Accessed August 27, 2026. https://www.help.senate.gov/imo/media/doc/sxs_340b_drug_pricing_integrity_and_affordability_for_patients_act_discussion_draftpdf.pdf
7 US Centers for Medicare & Medicaid Services. Calendar year 2027 hospital outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) proposed rule (CMS-1850-P). Fact sheet. US Dept of Health & Human Services. July 2, 2026. Accessed August 29, 2026. https://www.cms.gov/newsroom/fact-sheets/calendar-year-2027-hospital-outpatient-prospective-payment-system-opps-ambulatory-surgical-center
8 Hess R, Zerbonia RE, Abdalla K. CMS proposes to reduce 340B drug reimbursement under 2027 OPPS rule. Husch Blackwell LLP. July 10, 2026. Accessed August 29, 2026. https://www.huschblackwell.com/newsandinsights/cms-proposes-to-reduce-340b-drug-reimbursement-under-2027-opps-rule
9 CY 2027 OPPS rule: 340B payment cuts. Advis. July 10, 2026. Accessed August 29, 2026. https://advis.com/340b/cy-2027-opps-340b-payment-cuts/
10 340B state-by-state protection guide — 2026. 340B Program. July 2026. Accessed August 26, 2026. https://340bprogram.com/solutions/340b-state-by-state-protection-guide-2026/11 Eberhardt G, Kimi A. State 340B legislative update webinar [slides]. 340B Health. June 25, 2026. Accessed August 26, 2026. https://www.340bhealth.org/events/state-340b-legislative-update-webinar-reg/. Slides available via 340B health login only.
Jigna Shah is Regulatory Affairs & Health Systems Strategy Manager at VytlOne. He can be reached at jmshah@vytlone.com.
