January 26, 2024
On January 17th, the Health, Education, Labor and Pension (HELP) Committee Ranking Member Bill Cassidy (R-LA) sent a letter to CVS and Walgreens asking about the role of contract pharmacies and third party administrators in the 340B program. Areas of focus include the growth of contract pharmacies participating in the 340B program including fees and shared revenue paid to contract pharmacies by an eligible entity. This is the opening round of 2024’s 340B reform debate.
Typically, in an election year, there is a low probability that sweeping 340B legislation will be enacted. Over the next year of investigations and Congressional deliberations, the lanes of policy options will continue to narrow. The Senate 340B work group is expected to publish their findings from a June 2023 Request for Information (RFI), which will shape the debate. The working group consists of Senators Thune (R-SD), Stabenow (D-MI), Capito (R-WV), Baldwin (D-MD), Moran (R-KS) and Cardin (D-MD) – three of whom represent AHPA members. The workgroup members are not antagonistic to 340B covered entities, and some have historically been front-line champions of the program.
340B legislation that is most likely to be enacted in 2024 are additional reporting requirements. Even on a sensitive stakeholder issue like 340B, the umbrella of “transparency” provides political cover for legislative action in an election year. However, the data that are produced by a transparency initiative can be burdensome and manipulated by the questions asked. PhRMA is interested in producing data that frames the 340B program as a financial windfall for 340B providers. Last year, The House overwhelmingly passed the “Lower Costs, More Transparency Act”, which included a provision that requires 340B hospitals to report the difference between their acquisition costs and Medicaid Managed Care Organization (MCO) payments. The bill also included critical policy priorities like repealing 2-years of Disproportionate Share Hospital (DSH) payment cuts, so the vote did not necessarily reflect support for that specific transparency proposal. Congressional leadership will ultimately hash out what, or if, 340B reporting requirements are enacted.