Illustration: Sarah Grillo/Axios
Lawmakers are laying the groundwork for another crack at 340B reform next year, even as more states are setting their own guardrails and drugmakers are restricting where hospitals and clinics can use their program discounts.
Why it matters: The 340B program has grown rapidly, putting lawmakers in a quandary as drugmakers and providers accuse each other of gaming the system.
What they're saying: Incoming Senate Majority Leader John Thune told Axios on Wednesday that a bipartisan Senate working group was still developing a framework for a reform package, but that the SUSTAIN 340B Act isn't done yet.
- Thune laughed when asked if anything would come out by year's end, saying: "That would be nice."
If time runs out, the lawmakers could pick up where they left off, with the advantage of having Thune — who's long been involved in the issue — in charge of the floor schedule.
- The Senate package was slated to come out in August but was delayed amid unspecified disagreements between Democrats and Republicans.
- One lobbyist told Axios that the working group met this week but that no decisions were made on rolling out the package.
Incoming Senate HELP Chair Bill Cassidy is also eager to tackle 340B reform, saying he may continue to gather information through RFIs and hearings and then see if legislation needs to be introduced.
- "There's still things that we were unable to learn, so I need to know more," said Cassidy, who has been gathering information over the past year. "There's a House bill. There's something that came out of a group of six up here. So you can take that, incorporate that as well."
- "I think we build on what we've done.… But there's more to be done," he added.
- Retiring Rep. Larry Bucshon, one of the main sponsors of the House 340B transparency bill that was approved out of Energy and Commerce, told Axios that he expected some of the bill's other sponsors to take up and push for the legislation when he leaves.
State of play: But as Congress punts much of the decision-making on 340B reform to the 119th session, states are starting to make their own changes to the program — or are analyzing how to do so.
- California voters last month approved a ballot measure that mandates that 98% of 340B revenue be directed to patient care. Providers that don't comply with the rule could lose their ability to operate as a health care entity.
- Last week, Minnesota became the first state to release a transparency report on 340B. It noted that providers in the state reaped $630 million in 340B revenue for the 2023 calendar year.
- It also found that the state's largest 340B hospitals benefited the most from the program, while the state's safety net clinics lagged.
Friction point: Drugmakers impatient with how the drug discount program has rapidly expanded over the years have already moved in recent months to try to clamp down on how discounts are issued to providers.
- Johnson & Johnson, Eli Lilly and Sanofi all recently tried to implement rebate models that would no longer give upfront discounts but instead would reimburse providers after the drugs are bought.
- The Health Resources Services Administration blocked J&J and Lilly from implementing the changes, and the matter is now tied up in litigation.
- It's not yet clear how the incoming Trump administration would address changes like these.
The bottom line: With such high stakes, 340B reform will loom large in the 119th Congress, experts predict.
- "With Sen. Thune as majority leader and Cassidy as HELP Committee chair, there will be a greater push to make 340B reform happen in the next Congress," said Darbin Wofford, a senior health policy advisor at Third Way.
- "We've seen exponential growth in the program over the past decade, and lawmakers are looking to make improvements."
