Chairman Cassidy Unveils Landmark Discussion Draft to Fix 340B, Lower Health Costs for American Patients & Families

WASHINGTON - Today, U.S. Senator Bill Cassidy, M.D. (R-LA), Chairman of the U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee, released a legislative discussion draft that strengthens the 340B Drug Pricing Program to better serve vulnerable patients and families. This discussion draft builds on Cassidy's years-long examination of the 340B Program, including the release of a report detailing the findings of an investigation into how covered entities use and generate revenue from 340B, a committee hearing, and an ongoing investigation into the 340B Prime Vendor Program.

"Clearly, there are real transparency and oversight concerns that prevent 340B from translating to better access and lower costs for patients. Congress needs to take action," said Dr. Cassidy. "This discussion draft proposes commonsense solutions to improve 340B for patients, ensuring the Program lowers costs for American families."

Chairman Cassidy's 340B Drug Pricing Integrity and Affordability for Patients Act (340B for Patients Act) discussion draft is a comprehensive 340B reform proposal to ensure the Program operates with integrity by delivering value to patients and making prescription drugs and other health care services more affordable.

The 340B for Patients Act would:

• Prevent waste, fraud, and abuse of the Program by bad actors.

• Ensure the Program is actually benefiting low-income and uninsured patients.

• Provide crucial regulatory clarity to prevent gaming of the Program.

• Fix Program operations and put it on a sustainable path to lower health care costs for all Americans.

Cassidy is asking for stakeholder feedback on his proposal by August 28, 2026. Email all comments to [email protected].

Read the full discussion draft here, a section-by-section summary here, and a one-pager here.

Background:

Congress created the 340B Program to make health care more affordable and accessible for low-income and uninsured patients. Currently, covered entities-such as hospitals and community health centers that qualify for the program-may purchase certain prescription drugs at highly discounted rates for their patients and charge the full price to a patient or their insurer, using the revenue to support the covered entity's operations. Since Obamacare expanded eligibility for the Program, 340B has grown considerably, reaching a record high of $81 billion in drug purchases in 2024. There are growing concerns about whether the 340B Program truly helps patients, with some studies suggesting that the 340B benefit does not translate into increased care or lower costs for vulnerable populations.

Recent high-profile examples of 340B hospitals directing resources to wealthy areas while reducing services in low-income communities raise questions about how covered entities use 340B revenue to directly benefit low-income or uninsured patients. According to the Congressional Budget Office, misaligned incentives within 340B have driven up the cost of medications and health insurance for taxpayers. Despite these widely recognized challenges, the 340B Program has not been reformed by Congress in the 15 years since Obamacare.

As part of his investigation into the 340B Program, Cassidy requested information from hospitals, community health centers (CHCs), contract pharmacies, and drug manufacturers to better understand how revenue flows throughout the 340B Program and how covered entities use 340B revenue to benefit patients. Last year, he held a hearing to evaluate the growth of the 340B Drug Pricing Program and its impact on patients. He is also investigating the 340B Prime Vendor Program after it generated hundreds of millions of dollars in revenue for the vendor through fees it collects for almost every drug sold under the 340B Program.

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