Carter, Harshbarger Introduce Legislation to Ensure Access and Transparency in 340B Drug Pricing Program

WASHINGTON, D.C. - Rep. Earl L. "Buddy" Carter (R-GA) and Diana Harshbarger (R-TN) today introduced the 340B Affording Care for Communities and Ensuring a Strong Safety-Net Act (340B ACCESS Act). This legislation establishes critical oversight and transparency of the 340B program while providing clear, practical, and achievable solutions to help ensure the 340B program can be a force for good in the nation's health care safety net.

The introduction of the 340B ACCESS Act comes amidst mounting evidence of the program's need for reform, including one day after the non-partisan Congressional Budget Office (CBO) released a report finding that the 340B program is costing taxpayers and that there is no evidence patients are benefitting.

"340B was intended to give low-income and vulnerable patients access to affordable medicines. 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 340B ACCESS Act will save lives and improve outcomes by ensuring patient access to affordable, quality health care. I want to thank Rep. Harshbarger for joining me to fix the 340B drug pricing program for Georgians and all Americans," said Rep. Carter.

"340B is a lifeline for safety-net providers serving low-income and vulnerable patients, but gaps in the program have let these discounts be misused and diverted from the goal of better access and lower costs for patients most in need. As a pharmacist, I know how critical it is to keep medicines and care affordable. That's why I'm proud to partner with Congressman Carter on the 340B ACCESS Act that would implement commonsense reforms to inject much needed transparency and oversight into the 340B program and protect and strengthen it for rural and safety-net providers in Tennessee and across the country," said Rep. Harshbarger.

BACKGROUND

The 340B drug pricing program, which was originally created in 1992, is an important tool that helps hospitals and other covered entities meet the health care needs of low-income and uninsured patients. The program allows 340B covered entities to purchase drugs for patients in their facilities at substantial discounts. However, over the past decade, the program has grown substantially and has operated with little transparency or oversight and with little evidence that patients are benefitting.

The 340B ACCESS Act seeks to capture the following policy principles, which will guide efforts to realign the 340B program in the interest of true safety-net providers and the communities they serve:

• Make 340B a true safety-net program for patients.
• Ensure 340B prescriptions are offered to patients at a discount.
• Update the 340B patient definition with strong safeguards.
• Establish clear criteria for 340B contract pharmacy arrangements to improve access.
• Prevent middlemen and for-profit entities from profiting off the 340B program.
• Update and strengthen 340B hospital eligibility requirements.
• Address standards for 340B child sites and subgrantee eligibility.
• Create a neutral 340B claims data clearinghouse.
• Facilitate public reporting on 340B program data.
• Establish enforceable rules and enhance federal administration and oversight of the 340B program.

In order to ensure 340B is reaching and helping vulnerable patients, the 340B ACCESS Act will:

Establish Patient Affordability Requirements

New requirements would ensure that qualifying low-income and uninsured patients benefit directly from 340B through reduced out-of-pocket costs for their medicines, whether they receive their medicine from a covered entity, child site, or contract pharmacy. Currently, the 340B program has no such patient affordability requirements for medicines, and evidence suggests that only a small share of 340B hospitals use some of their 340B margin to help patients afford their medicines.

Codify Patient Definition

The 340B statute expressly prohibits purchasing 340B drugs for individuals who are not patients of a covered entity, but the statute does not provide a detailed definition of a covered entity patient. In 1996, HRSA issued a definition of a 340B patient in guidance. That definition is overly broad and subject to abuse. For example, the guidance allows use of 340B drugs in cases when a provider "provides health care under contractual or other arrangements (e.g., referral for consultation)" but does not specify what constitutes a "referral" or "other arrangements." Additionally, HRSA's guidance has not specified a time period for which an individual remains a "patient" of a covered entity after first receiving care at the entity. The legislative text would codify a patient definition in statute. The elements of this definition would clarify which drugs could qualify for 340B discounts.

Recognize Contract Pharmacies

Contract pharmacies would be recognized in statute and subject to rules aimed at ensuring covered entities use these arrangements consistent with the intent of the program as specified in the legislation. The legislation would add new requirements for manufacturers, who currently do not have a statutory requirement to ship or facilitate delivery of 340B drugs to contract pharmacies.

Impose Hospital Eligibility

This legislation would establish eligibility requirements for hospitals, with specific requirements varying by hospital type. These requirements are intended to ensure that the program serves true safety net hospitals.

Establish Child Site Eligibility

The legislation establishes statutory standards for child site eligibility and requires covered entities to demonstrate to the HHS Secretary that each child site satisfies the new standards prior to participating in 340B. Covered entities would be required to de-register the child site from 340B and self-disclose any improper discounts if a child site fails to meet these new eligibility standards. Hospitals would be subject to civil monetary penalties if they fail to de-register the child site and self-disclose non-compliance with these standards. Currently, child sites have no eligibility requirements related to treating low-income and otherwise vulnerable patients or providing charity care.

Restrict PBMs and For-Profit Entities

Restrictions on pharmacy benefit managers (PBMs), contract pharmacies, and third-party administrators are included in the legislation to guard against for-profit, 340B supply chain middlemen making excessive profits from a safety-net program. These new PBM non-discrimination rules are modeled after those in H.R. 2534, the Preserving Rules Ordered for the Entities Covered Through (PROTECT) 340B Act of 2023.

Bolster Transparency

The 340B ACCESS Act includes a transparency section that is based on a bill from 2023, H.R. 3290 (as amended), that brings much-needed transparency to the 340B program.

The legislation adds a requirement that grantees report how they are using the 340B margin using standardized rules established by HHS that are consistent with reporting requirements that federally qualified health centers use for Uniform Data System (UDS) reporting.

Read full bill text here.

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