Sen. Moran & Colleagues Introduce Comprehensive 340B Reform Legislation

WASHINGTON - U.S. Senator Jerry Moran (R-Kan.) today led his fellow members of the Senate 340B Bipartisan Working Group - Sens. Tammy Baldwin (D-Wis.), Shelley Moore Capito (R-W.Va.), Tim Kaine (D-Va.), John Boozman (R-Ark.) and John Hickenlooper (D-Colo.) - in releasing the following statement after introducing sweeping legislation to reform the 340B program:

"We have received invaluable input from stakeholders throughout our process, and the legislation we are introducing reflects that feedback by aiming to provide greater stability, clarity, and transparency in the 340B program. The SUSTAIN 340B Act makes comprehensive reforms to the program while preserving its critical benefits that support eligible health care providers and the patients they serve throughout the country. By continuing to work together in bipartisan fashion, we are committed to strengthening the 340B program and helping make certain it remains accessible to serve patients and communities for years to come."

The SUSTAIN 340B Act would:

• Sense of Congress - Reiterate the original intent of the 340B program and clarify the program provides point-of-purchase discounts, as opposed to rebates.
  
  
• Contract Pharmacy - Codify covered entities' use of contract pharmacies while placing reasonable limitations including registration, audits of covered entities with a large number of contract pharmacies, and standardization of contractual requirements between covered entities and contract pharmacies. The bill does not place numeric or geographic limitations on the use of contract pharmacies.
  
  
• Patient Definition - Establish the definition of an eligible patient under the 340B program and covered services for these patients. It also adds requirements and oversight for 340B patients being dispensed 340B drugs through referrals to non-covered entities.
  
  
• 340B Rebate Model Pilot Program - End any 340B Rebate Model program within one year and require the Department of Health and Human Services (HHS) transition to the clearinghouse established in the legislation.
  
  
• Child Sites - Establish that child sites must be wholly owned and integrated with the parent covered entity, disincentivizes child site acquisitions with the sole purpose of expanding 340B footprints, and directs HHS to establish registration and oversight procedures.
  
  
• Supporting Transparency - Place new annual reporting requirements on covered entities relating to their utilization of the 340B program.
  
  
• Strengthening Program Integrity - Give HHS authority to establish auditing and reporting procedures for compliance under the 340B program and authorize removal of covered entities who are found in noncompliance and do not implement corrective action plans.
  
  
• Preventing Duplicate Discounts - Establish a 340B data clearinghouse operated by an independent, third-party entity to prevent diversion and duplicate discounts in the 340B program.
  
  
• Patient Financial Assistance - Require covered entities to establish a standard, transparent patient financial assistance policy for patients at or below 200% of the federal poverty level.
  
  
• Supporting Equitable Treatment of Covered Participants - Prevent insurers from discriminating against 340B covered entities and their contract pharmacies.
  
  
• User Fee Program - Establish a user fee program for participation in the 340B program to pay for program administration, including the clearinghouse.
  
  
• Studies and Reports - Require reports to Congress on hospital debt collection practices, dispensing fees, and data collection system integration.
  
  
• Additional Resources - Authorize three million dollars annually for five years for conducting oversight and enforcement and nine million dollars annually for four years for bill implementation.
  
  
• Definitions - Establish definitions for "child site" and "contract pharmacy."

Items to note:

• The 340B program requires that drug manufacturers who participate in Medicaid and Medicare provide certain non-profit health care providers, hospitals and clinics (covered entities) a discount on outpatient drugs. The 340B program enables covered entities to use these savings to provide more comprehensive services to eligible patients and their communities.
  
  
• The Senate 340B Bipartisan Working Group has existed for more than a decade and is comprised of members who support the 340B program and are committed to sustaining it.
  
  
• In the 118th Congress, the group sought stakeholder feedback on how to improve the 340B program and released a bipartisan discussion draft to strengthen it. The draft reflected the group's belief that the program provides a critical benefit to eligible providers by helping them stretch federal resources to deliver health care services to the patients they serve, while also addressing concerns about program ambiguity and the need for greater transparency and accountability.

Full text of the legislation can be found HERE.

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