Senators Release Draft Legislation to Reform the 340B Program: the SUSTAIN 340B Act
by Elizabeth “Issie” Karan, Legal Counsel and Artemis Policy Group

Earlier this month a group of bipartisan Senators released draft legislation focused on reforming the 340B Discount Drug Pricing Program. The Senators are seeking feedback on the legislative text from stakeholders interested in the program and they released an explanatory statement and request for information with questions regarding reform of the 340B Program. Responses are due April 1, 2024.

Describing themselves as “long-time supporters of the 340B program,” Senators John Thune (R – SD), Debbie Stabenow (D-MI), Shelly Moore Capito (R-WV), Tammy Baldwin (D-WI), Jerry Moran (R-KS), and Benjamin Cardin (D-MD) released the draft bill and stated that they “believe it is necessary to pass legislation in the 118th Congress that provides clarity, transparency, and accountability in the 340B program in order to ensure the program remains strong, long into the future.”

According to the Senators, the ‘‘Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now and for the Future of 340B Act’’ or the ‘‘SUSTAIN 340B Act’’ aims to address several key areas of policy in the 340B Program, including contract pharmacies, affiliated sites, transparency, and the patient definition. Citing comments from stakeholders and recent court decisions, the Senators state that they need more information to clarify the legislative text. Several of the proposals in the legislation, such as user fees for program participants and the use of a clearinghouse in Medicaid, have surfaced previously in 340B reform discussions. Other proposals are less developed – for example, the patient definition section simply reads “TBD.”

The Alliance plans to respond to the RFI. Our initial analysis recognizes some beneficial provisions and others that raise concerns. We applaud the protections the draft bill provides covered entities against discriminatory reimbursement and other practices by payers which limit the benefits of 340B for covered entities and the affirmation of the use of contract pharmacies in the program. However, the current draft bill bases user fees in the 340B Program on the size of the 340B discount off wholesale acquisition costs – this could be very costly for HTCs. Given the number of hemophilia treatment centers (HTCs) in the program, their low volume of prescriptions, and the proportion found to have program integrity issues (when compared to other covered entity types), we believe this approach requires HTCs to pay more than their fair share.

The Alliance will continue to analyze the SUSTAIN 340B Act and provide comments accordingly. Please reach out with questions or concerns.