Doris Matsui
Rep. Doris Matsui (D-Calif.) introduced federal legislation to prohibit drugmaker 340B contract pharmacy restrictions.

U.S. Rep. Matsui Expected to File 340B Contract Pharmacy Bill in Connection with 340B Conference

A bill amending the 340B statute to explicitly require drug makers to unconditionally sell and deliver 340B drugs dispensed by contract pharmacies is expected to be introduced just before or during the 340B Coalition summer conference July 10-12 near Washington, D.C., individuals involved in the roll-out say.

U.S. Rep. Doris Matsui (D-Calif.), who serves on the House Energy & Commerce Committee with jurisdiction over the 340B program, will be its main sponsor. A Republican lead co-sponsor has been lined up, according to persons working on the bill who spoke on condition that they not be named. It is not known if there will be other co-sponsors when the bill is filed.

A 10-page discussion draft of the bill dated June 12 began circulating widely early this week. Health care provider group representatives say it is a near-final draft and that they are giving feedback. Some drug industry stakeholders say they have obtained copies. 340B Report received a copy. It is honoring requests to temporarily refrain from publishing it and not report about it in detail.

An even earlier draft of the bill created in Microsoft Word on April 5 also is circulating among stakeholders.

The House began a two-week break on Monday. If House staff members working on the bill were not on vacation now, it might have been introduced this week, one entity representative said.

The House’s first day back in session after its break is July 11. The 340B Coalition conference opens at 1:00 p.m. Eastern on July 10. Members of hospital group 340B Health, which hosts the conference on the coalition’s behalf, will be lobbying on Capitol Hill immediately after the conference ends.

The draft bill currently is divided into three main parts:

  • a 10-paragraph “findings” section about 340B’s intent, history, covered entity savings and how they may be used, manufacturer requirements and prohibitions, 340B’s inflation penalty, and specialty drugs’ role in the care covered entities provide—all related to entities’ use of contract pharmacies
  • a three-paragraph section explaining the bill’s specific purposes
  • a final section with the actual language to amend the 340B statute.

The draft bill solely reflects the covered entity point of view on 340B contract pharmacy and 340B’s broader purpose. It offers drug manufacturers no concessions and the industry is almost guaranteed to criticize it.

The bill does not address other hot 340B issues such as pharmaceutical benefit manager encroachment on covered entities’ 340B revenues, prevention of duplicate 340B discounts and Medicaid rebates, or how much money entities make furnishing 340B drugs and how they use it. The bipartisan PROTECT 340B Act addresses the first two topics and Republican Rep. Larry Bucshon’s (Ind.) 340B hospital reporting bill H.R. 3290 addresses the third. The Energy & Commerce Committee passed Bucshon’s in May with just one Democrat voting yea. Hospital groups strongly oppose it.

It is unclear whether the Matsui bill can make it through Congress and be signed into law as a stand-alone bill. Although Bucshon said when the E&C Committee passed his bill that “the “contract pharmacy situation is something we need to address” at some point, committee chair Cathy McMorris Rodgers (Wash.) has given no public sign that passing 340B contract pharmacy legislation is a very high priority for the panel.

Two weeks ago, a bipartisan group of six senators invited 340B stakeholders to weigh in on ways to improve the 340B program, including 340B contract pharmacy arrangements. The deadline for responses is July 28. They did not say when they might introduce 340B legislation.

The Matsui bill’s best chance of becoming law is as an amendment to a must-pass bill. The same is true for legislation addressing PBM 340B discrimination, 340B duplicate discount prevention, and 340B covered entity transparency. The Biden administration’s request to give the Health Resources and Services Administration comprehensive regulatory authority over 340B—specifically to address the contract pharmacy program—and the power to audit entities about how they use 340B savings also is a candidate for an amendment.

Whatever bill Congress decides to use to reauthorize federal funding for community health centers, set to expire Sept. 30, is a strong candidate for a 340B related rider.

A federal appeals court in Philadelphia ruled in January that the 340B statute does not require drug manufacturers to deliver 340B-purchased drugs to an unlimited number of contract pharmacies.

Two other federal appeals courts, one in Washington, D.C., and the other in Chicago, are expected to decide companion drug manufacturer lawsuits against the federal government at any time. If one or both agree with the first court, a critical mass of members of Congress could arise to address the matter, which 340B providers increasingly are calling a crisis.

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