Subcommittee on Health to Hold Hearing on Reforming the 340B Drug Pricing Program

The House Energy and Commerce Subcommittee on Health announced they will hold a hearing on Wednesday, July 11, 2018, at 10:00 a.m., to review legislative proposals aimed at reforming the 340B Drug Pricing Program. The Subcommittee is expected to review 15 pending bills and discussion drafts on topics that range from changing the definition of a 340B patient and broadening the Health Resources and Services Administration’s (HRSA) authority to more politically charged bills that focus on narrow concerns within the 340B program. Subcommittee Chairman Michael Burgess also said that the panel will review a recent report issued by the Government Accountability Office (GAO) that highlighted gaps in oversight of contract pharmacies within the 340B program.

This hearing is expected to expand on a number of developments impacting the 340B program coming out of Congress, the Trump Administration, and federal oversight entities in recent months. In addition to the GAO’s June 2018 report, the Administration previously announced a plan to delay a regulation to implement the ceiling price and penalty guidelines for the program and released its drug pricing blueprint that carries implications for the 340B program.

The Administration’s 2019 budget proposal also sought several legislative changes to 340B similar to legislation that House Energy & Commerce Republicans have introduced. On the other side of the Capitol, the Senate’s Health, Education, Labor, and Pensions Committee recently concluded its own series of hearings on the 340B program. HELP Committee Chairman Lamar Alexander offered no indication that the Committee plans to advance legislation to reform the 340B program this year.

The current slate of bills for next Wednesday’s Subcommittee hearing include:

• The Closing Loopholes for Orphan Drugs Act — Sponsored by Representatives Peter Welch (D-VT) and Gregg Harper (R-MS), this bill would amend the Public Health Service Act to close a loophole in 340B and clarify that the ability to deny discounts to providers applies only in cases where a drug is used for the rare condition or disease for which it was approved by the Food and Drug Administration.
• H.R. 4392 — Sponsored by Representative David McKinley (R-WV), this bill would nullify the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs final regulation issued by the Centers for Medicare and Medicaid (CMS) relating to changes in the payment amount for certain drugs and biologicals purchased under the 340B drug discount program
• The 340B Protecting Access for the Underserved and Safety-Net Entities (340B PAUSE) Act — Sponsored by Representatives Larry Bucshon (R-IN) and Scott Peters (D-CA), H.R. 4710 would implement a two-year moratorium on most new 340B hospital participants, including both hospitals new to 340B and new locations of existing hospital participants.
• The 340B Optimization Act — Sponsored by Representative Buddy Carter (R-GA), H.R. 5598 would require certain disproportionate share hospitals within 340B to submit reports on low-income utilization rates of outpatient hospital services to the Department of Health and Human Services (HHS).
• The Stretching Entity Resources for Vulnerable (SERV) Communities Act — Sponsored by Representative Doris Matsui (D-CA), this legislation seeks to clarify the intent of the 340B program and enhance the program’s integrity by: (1) clarifying the purpose of the 340B program; (2) codifying the definition of “patient;” (3) disallowing public and private payers from discriminating against covered entities that participate in the 340B program; (4) requiring HRSA to publish manufacturer ceiling drug prices for covered outpatient drugs and implementing civil monetary penalties for noncompliance; (5) extending the 340B program eligibility to Substance Abuse and Mental Health Services Administration (SAMHSA) grantees providing behavioral health and substance use disorder services; and (6) reversing the cut in Medicare reimbursement to 340B hospitals for their purchase of Part B drugs set forth in the Medicare Hospital Outpatient Prospective Payment System (OPPS) rule published in November 2017 and implemented in January 2018.
• H.R. 6240 — Sponsored by Representative Chris Collins (R-NY), this discussion draft bill would require participating hospitals to report their total 340B drug purchases and pay a 0.1 percent user fee to HRSA.
• H.R. 6273 — Sponsored by Representative Mimi Walters (R-CA), this bill would ensure that victims of sexual assault receive appropriate care by 340B hospitals.
• The Protecting Safety-Net 340B Hospitals Act — Sponsored by Representative Joe Barton (R-TX), this discussion draft would raise the minimum disproportionate share adjustment percentage required of certain hospitals to 18 percent in 2020. It also would increase the 340B discount by five percent for qualifying providers that are not Disproportionate Share Hospitals (DSH) or critical access hospitals.
• The Bettering Operations and Oversight through Senate-process Transparency (BOOST) in 340B Act — Sponsored by Representative Richard Hudson (R-NC), this bill would establish an HHS Administrator for the 340B program.
• A bill to amend the Public Health Service Act to define the term patient for purposes of the 340B drug discount program — Sponsored by Representative Chris Collins (R-NY), this discussion draft provides clarifying language that defines the meaning of “patient” under the 340B drug discount program.
• A bill to require the Secretary of Health and Human Services to implement the Government Accountability Office recommendations — This discussion draft would require HHS to implement all of the GAO’s recent recommendations for HRSA relating to 340B contract pharmacies within 3 years of enactment of the bill.
• A bill to amend the Public Health Service Act to require under the 340B drug discount program reports by covered entities — Sponsored by Representative Bucshon, this discussion draft would require reports from participating hospitals regarding certain information on savings to covered entities from discounted prices under the program and the relationship between such savings and charity care expenditures.
• A bill to amend the Public Health Service Act to require the Secretary of Health and Human Services to conduct audits — This discussion draft would require HHS to conduct audits of manufacturers and wholesalers under the 340B program by October 1, 2020.
• A bill amend the Public Health Service Act to require certain covered entities under the 340B drug discount program — Sponsored by Representative Burgess, this discussion draft would require DSH hospitals and children’s hospitals to pass along 340B drug discounts to a “targeted low-income patient” by charging them no more than the 340B ceiling price for a drug.
• A bill to amend the Public Health Service Act to allow the Secretary of Health and Human Services to prescribe regulation — Sponsored by Representative Markwayne Mullin (R-OK), this discussion draft would give HHS the authority to issue regulations pertaining to the 340B program.