The American Hospital Association supports the bipartisan SUSTAIN 340B Act, which would codify rules for the 340B drug discount program, including contract pharmacy use and a data clearinghouse, but it asked its sponsors to rework several provisions, according to an Oct. 27 letter to the six senators behind the bill.
Here are seven things to know:
- The bill was introduced Aug. 5 by Sens. Jerry Moran, R-Kan., Tammy Baldwin, D-Wis., Shelley Moore Capito, R-W.Va., Tim Kaine, D-Va., John Boozman, R-Ark. and John Hickenlooper, D-Colo. The AHA said it supports provisions that would codify the program’s purpose, end the 340B rebate model, protect upfront discounts, create a neutral third-party clearinghouse, bar manufacturer limits on contract pharmacies and prohibit discrimination by health plans and pharmacy benefit managers.
- The AHA opposes a provision that would let manufacturers audit contract pharmacies directly. It said that authority should rest with the federal government and warned that pharmacies may refuse to open themselves to drugmaker audits and leave 340B arrangements altogether.
- On the patient definition, the AHA supports a clear statutory standard but urged one built around whether a hospital has a meaningful clinical relationship with, and responsibility for, the patient. It warned that a prescription-by-prescription test could exclude legitimate patients and asked for a path for infusion and clinician-administered drug encounters, which the bill generally excludes.
- The AHA asked the senators to remove a three-year delay for newly acquired child sites and a requirement that child sites be wholly owned. It said hospitals often acquire clinics to preserve local access to services and that joint ventures, especially in rural areas, would lose eligibility.
- The AHA supports transparency but said the bill’s annual reports would duplicate information hospitals already file through Medicare cost reports, IRS Form 990s and HRSA recertification. It asked that requirements be standardized and proportionate and that manufacturers and payers face comparable visibility.
- The AHA urged a more flexible approach to the bill’s financial assistance requirement for patients at or below 200% of the federal poverty level. It said applying the requirement to contract pharmacy dispensing would be hard to implement because those pharmacies often do not know at the time whether a prescription will qualify as a 340B drug.
- The AHA noted hospital drug costs grew 13.6% in 2025, the fastest of any expense category, and that 340B hospitals provided nearly $100 billion in community benefits in a single year. It said 80% of rural 340B hospitals have at least one contract pharmacy. The SUSTAIN 340B Act is one of several 340B proposals in Congress, including the House’s SECURE 340B Act, and a separate bipartisan House bill would delay HRSA’s rebate pilot for two years.
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