There are several proposed reform options in Congress that could make changes to the 340B drug pricing program.
There are a few different bills pending in Congress that would make significant changes to 340B. I won’t cover them all today, but I’ve been getting questions about which proposals are most likely to become law. First, I’ll note that there isn’t much time left in this Congress, and with the mid-term elections coming up, it’s not likely we’ll see Congress enact major comprehensive 340B reform legislation this year.
Second, it’s been difficult achieving bipartisan support to take on this issue in recent years, which is another reason why enacting major 340B reform legislation this year seems unlikely.
That said, there are three bills put forward recently that are worth watching. There is a discussion draft released by Senator Bill Cassidy, the Chairman of the Senate HELP Committee; the SECURE Act, introduced by a group of Representatives in the House; and the SUSTAIN Act, introduced by a bipartisan Senate Working Group comprised of three Republicans and three Democrats.
All three bills would address drug manufacturer restrictions on contract pharmacy use, but to varying degrees. The SECURE Act and SUSTAIN Act would permit an unlimited number of contract pharmacies. The Cassidy bill would permit unlimited contract pharmacies for grantees but would limit the number of disproportion share hospitals (DSH) to only five contract pharmacy locations, none of which could be mail order pharmacies.
All three bills would address manufacturer efforts to provide 340B pricing through rebates instead of upfront discounts. The Cassidy bill would let covered entities choose how to access 340B prices, but they could only access discounts if they agree to provide 340B drugs to patients at discounted prices and use physically separate inventories, which isn’t operationally feasible.
The SECURE Act would prohibit 340B rebate models for four years, and the SUSTAIN Act would permit rebates under a Health Resource & Service Administration (HRSA) pilot program for one year before requiring HRSA to transition to use of a clearinghouse to collect 340B claims data instead of permitting rebates.
The biggest areas to watch, though, are the restrictions on 340B use that could shrink the program. All three bills would narrow the definition of a 340B-eligible patient, and the Cassidy bill would also prohibit hospitals from using 340B drugs in outpatient clinics, or “child sites,” unless they are in health shortage areas and meet minimum charity care requirements. The SECURE Act would also require child sites to meet community needs standards. And the Sustain Act would enact a three-year moratorium on any new child sites.
So, as you can see, while there are some provisions in these bills that would provide relief to 340B providers, there are also significant restrictions that would shrink 340B use.
We’ll continue to monitor and see whether Congress will take up any of these bills this year or during the next Congress.
