Kaine & Colleagues Introduce Legislation to Strengthen and Reform 340B Drug Program

WASHINGTON, D.C. - Today, U.S. Senators Tim Kaine (D-VA), Jerry Moran (R-KS), Tammy Baldwin (D-WI), Shelley Moore Capito (R-WV), John Hickenlooper (D-CO), and John Boozman (R-AR), members of the Senate 340B Bipartisan Working Group, introduced the SUSTAIN 340B Act, bipartisan legislation to strengthen and reform the 340B program. The 340B program requires that drug manufacturers that participate in Medicaid provide certain covered entities, including non-profit health care providers, such as hospitals and community health centers, a discount on outpatient drugs. The 340B program enables covered entities to use these savings to provide more comprehensive services to patients and their communities.

"The 340B program has been an important program that has helped health care providers better care for communities across Virginia, especially those in rural and underserved areas. At a time when clinics and hospitals have been forced to close due to massive cuts to Medicaid and other federal health programs, it's critical that Congress acts to help providers and ensure Americans continue to have access to the care they need," said Kaine, a member of the Senate Health, Education, Labor and Pensions (HELP) Committee. "I'm grateful to the many health care providers and stakeholders around Virginia who have provided feedback about ways to improve the stability and integrity of the 340B program. This bipartisan legislation makes needed reforms to strengthen the 340B program and help ensure patients are benefiting. I'm committed to working with my colleagues to pass these reforms."

Specifically, 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.
• Transparency - Place new annual reporting requirements on covered entities relating to their utilization of the 340B program.
• 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.
• Safeguards to Prevent 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.
• 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."

Full text of the legislation is available here.

###