Sen. Bill Cassidy, MD, R-La., has crafted a discussion draft of legislation that would overhaul the 340B Drug Pricing Program with new transparency, oversight and accountability requirements for covered entities.
The draft, released June 25, proposes reforms intended to ensure the program benefits low-income and uninsured patients, prevent waste, fraud and abuse, provide greater regulatory clarity and put the program on a more sustainable path, according to a news release from the senator’s office. Key provisions include tightening the definition of an eligible 340B patient, requiring hospitals to publicly report margins generated from 340B drugs, capping out-of-pocket costs for low-income and insured patients through mandatory sliding fee scaled, and restricting off-site hospital outpatient facilities from participating unless they meet new criteria including location in a shortage area and minimum charity care requirements.
The senator is seeking stakeholder feedback on the proposal through Aug. 28.
The 340B program reached a record $81 billion in drug purchases in 2024. Congress has not enacted major reforms to the program in 15 years, according to the release.
Hospital advocacy groups raised concerns about several of the legislation’s provisions. America’s Essential Hospitals cautioned against requirements it characterized as burdensome to 340B hospitals, warning that some provisions could benefit drug manufacturers “at the expense of patients,” according to a June 25 statement from Senior Vice President of Advocacy and Policy Beth Feldpush, DrPH.
340B Health, a trade association representing more than 1,600 participating hospitals, said the draft would “profoundly alter 340B” in ways that would restrict hospital access to program savings. In a statement, the group flagged provisions that would narrow the definition of a 340B patient, limit eligibility for off-site outpatient facilities and authorize a 340B rebate model.
“Put together, these restrictions would result in far fewer opportunities for hospitals to access key 340B savings that they need to care for their patients,” Maureen Testoni, president and CEO of 340B Health, said in a June 25 statement. The organization said it plans to submit formal comments to Dr. Cassidy and will work with member hospitals to respond to the proposal.
The draft arrives as the 340B battle has escalated on multiple fronts. Eli Lilly began denying 340B discounts to hospitals that did not comply with its claims data submission policy on June 18, following a five-day ultimatum to covered entities earlier in the month. Four major hospital groups called for federal action in response.
State-level battles have also intensified, with a judge denying a bid to block Washington’s 340B law and another dismissing AbbVie’s challenge to Mississippi’s 340B law, both in early June.
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