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340B reform efforts pick up steam

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Jun 5, 2024
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Illustration: Shoshana Gordon/Axios

Momentum is building on both sides of the Capitol to make comprehensive changes to the federal 340B drug discount program — though it's unclear how much money the plans would save.

Why it matters: Surging sales over the past five years have put 340B on pace to become one of the largest federal drug programs, per Avalere. But it's mired in litigation and competing state efforts to set rules of the road.

Driving the news: House Energy and Commerce members signaled interest in new transparency requirements and addressing provider consolidation during an oversight hearing on Tuesday, increasing the likelihood that policy changes could be rolled into a year-end health deal.

  • A 340B bill from Reps. Larry Bucshon, Buddy Carter and Diana Harshbarger that's backed by the pharmaceutical industry would codify the definition of a 340B patient and reset eligibility requirements for hospitals.
  • Bucshon told Axios that he's still trying to find Democratic co-sponsors in the face of sharp criticism from hospitals and health systems in the program.
  • "There's some Democratic support, and I'm not going to mention names, but there is," he said.
  • Bucshon sponsored a 340B transparency bill that was advanced out of Energy and Commerce last year largely on partisan lines. Aspects were incorporated into the broader 340B bill that's now on the table.

Across the Capitol, senators are still working on a 340B draft discussion bill that could define covered patients. It is expected to respond to the growing number of drugmakers that have restricted when providers can use 340B discounts at contract pharmacies.

  • Sen. John Thune said he was hopeful a draft would materialize by August recess.
  • "There's a lot of good work being done on it," Thune told Axios. "Hopefully we'll have something to report later this summer."
  • Sen. Debbie Stabenow, one of the Democratic leads in the Senate working group, is intent on getting a 340B reform bill passed before she retires, which could give the effort an extra lift.

Friction point: Hospital lobbyists are pushing back against the House bill, calling it a drug industry wish list and saying it would make many facilities ineligible for the program and create onerous compliance requirements.

  • "This bill would dismantle the 340B program and undermine the very purpose of the program ... in essence, this bill would enrich drug companies by permitting them to abandon their 340B obligations," the American Hospital Association wrote in a letter to Energy and Commerce.
  • Ryan White Clinics for 340B Access has also came out against the legislation, citing that it "misconstrues the intent of the 340B program as a program to increase access to affordable drugs" and "deviates from the program's well-accepted purpose of allowing safety net providers to stretch scarce resources."
  • Meanwhile, community health centers and the drug lobby PhRMA say the bill would ensure patients benefit from the program by stronger eligibility requirements.

What we're watching: The level of interest pursuing reforms could hinge on how CBO scores the bills, Avalere noted. That could factor such variables as whether 340B discounts are putting upward pressure on launch prices for drugs.

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