Drug Pricing Reform Bill Introduced in House

Representatives Earl “Buddy” Carter, R-Georgia, and Diana Harshbarger, R-Tennessee, introduced on September 10 the “340B Affording Care for Communities and Ensuring a Strong Safety-Net Act,” known as the 340B ACCESS Act, to add transparency and oversight to the 340B Drug Pricing Program.

The 340B program, created in 1992, requires drug manufacturers to offer discounts on medications to certain hospitals, clinics and other organizations that serve low-income and vulnerable populations.

The bill was introduced one day after the Congressional Budget Office released a report stating that the growth of the 340B program has increased federal spending. The report named the integration of hospitals and off-site clinics, increased facility participation after the implementation of the Affordable Care Act and expanded use of off-site clinics as contributing factors in the program’s growth.

About 90% of health care facilities that participate in the 340B program also participate in the Prime Vendor Program, through which the Health Resources and Services Administration contracts with an external organization, known as a prime vendor, to support 340B operations, according to the COB’s report. Facilities participating in the PVP spent $43.9 billion in 2021, up from $6.6 billion in 2010.

In April, Senator Bill Cassidy, R-Louisiana, chair of the U.S. Senate Committee on Health, Education, Labor and Pensions, issued a 195-page report calling for major reforms to the program, insisting low-income patients were not receiving the intended benefits. The 340B program grew to $66.3 billion in drug purchases in 2023, according to Cassidy’s report.

The proposed 340B ACCESS Act would establish patient affordability requirements; codify the definition of a patient; create a neutral 340B data clearinghouse; impose hospital eligibility requirements; and place restrictions on pharmacy benefit managers, contract pharmacies and third-party administrators.

The bill would require that coverage grantees report how they are utilizing the 340B margin based on standardized rules established by the Department of Health and Human Services that are consistent with reporting requirements that federally qualified health centers use for Uniform Data System reporting.

In addition, the 340B ACCESS bill would establish statutory standards and eligibility for child sites—outpatient sites that are part of the covered parent organization but are physically separate—and require covered entities to demonstrate to the secretary of health and human services that each child site satisfies the new standards prior to participating in 340B.

“340B was intended to give low-income and vulnerable patients access to affordable medicines,” Carter said in a statement. “The program has rapidly expanded, and a lack of transparency has allowed some entities to pocket the savings without passing them on to patients. Congress must act to restore the integrity of the program to better protect vulnerable patients served by safety-net providers.”

The American Benefits Council supported the bill.

“By offering health coverage to almost 180 million Americans, employers are a key stakeholder in legislative efforts to amend the 340B program,” wrote Ilyse Shuman, the American Benefits Council’s senior vice president of health and paid leave policy, in a statement. “The Council has strong concerns that the growth of the 340B program is raising costs for employers and working families by fueling hospital-physician consolidation, affecting discounts in the commercial market and promoting increased use of higher-cost therapies.”