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To 340B or not to 340B

Dec 7, 2022
Illustration of a chain and padlock enclosing a pill capsule.

Illustration: Megan Robinson/Axios

One thing to watch for in the next Congress: legislative action on 340B.

Driving the news: Community health centers want Congress to stop drugmakers' restrictions on the federal outpatient discount drug program at contract pharmacies next year. But other stakeholders, including hospitals, aren’t convinced a legislative solution is necessary yet.

Why it matters: Hospitals say introducing legislation on 340B risks opening the program to unwelcome legislative changes, while community health centers say they need intervention soon to keep clinic doors open.

  • "We are probably the lone wolf out of everyone who is definitely beating down Congress' door and asking for a legislative fix in 2023,” Vacheria Keys, director of regulatory affairs for the National Association of Community Health Centers, told Axios.

The backstory: Since 2020, 18 pharmaceutical companies have placed restrictions on when providers can use 340B discounts at contract pharmacies.

  • The Biden administration has asked several of the companies to remove their 340B restrictions and even issued warnings of fines if companies don't comply. Five drugmakers have sued over those warning letters, and appeals are pending in three federal circuit courts.
  • Hospitals, community health centers and other 340B-covered entities say the policies are unlawful and threaten patient access, while pharmaceutical companies maintain the limits boost 340B program integrity.

The National Association of Community Health Centers wants to see legislation to stop the contract pharmacy restrictions on all provider types next year, Keys said.

  • She plans to push for language that would require drug manufacturers to make 340B prices available to providers without any conditions. NACHC has not identified legislative sponsors for the bill yet, Keys said.
  • The organization hopes 340B legislation could pass as a stand-alone bill, but attaching it to future work on insulin costs could be another option, Keys added.

Yes, but: Hospital groups aren't ready to jump on board with NACHC's plan.

  • Aimee Kuhlman, vice president of federal relations at the American Hospital Association, said she couldn't comment on NACHC's specific congressional asks, but said, "We believe that HHS has the authority that is needed."
  • "I don't think we're at the point yet of saying that legislation is needed. I think we need to see where the court cases go."
  • 340B Health, a lobbying group representing hospitals and health systems in the program, did not directly respond when asked whether it supports a legislative solution next year but said it looks forward to continuing its Capitol Hill advocacy.

Reality check: PhRMA isn't going to let Congress prevent 340B discount limits without a fight. In fact, the pharmaceutical industry lobbying group wants more restrictions and accountability checks placed on the program.

  • To start, PhRMA would like to see Congress better define 340B patients and revisit eligibility requirements for hospitals and off-site clinics, said Nicole Longo, senior director of public affairs at PhRMA.
  • The program is "so broken" that PhRMA is open to discussing any suggestions on how to alter it, she said.

What we're watching: Regardless of how covered entities play their cards in Congress, we could see oversight hearings on 340B in the new Republican-controlled House.

  • The Energy and Commerce Committee is open to taking a critical look at the program, said Chris Krepich, spokesperson for the committee's Republicans.
  • Congress may also return to an element of a bipartisan 2021 340B bill that would create a national clearinghouse to prevent duplicate Medicaid discounts in the program, said Emily Jane Cook, a health care lawyer at McDermott Will & Emery.
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