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The bipartisan Senate “Gang of Six” has introduced the SUSTAIN 340B Act, the third major 340B reform proposal released in roughly the past month. The legislation attempts to strike a middle ground by pairing several significant protections for hospitals and other covered entities with new eligibility, reporting and program-integrity requirements. Key provisions favorable to covered entities include:

• Protecting unrestricted access to contract pharmacies, addressing manufacturer efforts to limit the use of outside pharmacies for 340B drugs.
• Sunsetting manufacturer rebate models one year after enactment, preserving the traditional upfront 340B discount structure over the longer term.
• Establishing nondiscrimination protections for PBMs and insurers, including protections against reduced reimbursement or other unfavorable treatment tied to 340B participation.
• Prohibiting manufacturers from requiring claims-level data from covered entities as a condition of providing 340B pricing.

The legislation would also impose several new requirements and restrictions:

• Expand covered-entity reporting, auditing and program-integrity requirements.
• Require hospital child sites to be wholly owned by the covered entity.
• Establish a three-year moratorium on new child sites, potentially limiting expansion of 340B eligibility to new outpatient locations.
• Create a covered-entity user fee to help fund federal oversight of the program.
• Establish a statutory patient definition using a two-year lookback for qualifying outpatient care, while generally excluding patients whose only relationship with the covered entity involves infusion services.

Overall, the proposal reflects a potential congressional compromise: stronger protections for covered entities in exchange for tighter eligibility standards and greater oversight.