The House Energy and Commerce (E&C) Health Subcommittee will hold a hearing on the 340B program on July 11, 2018 at 10 a.m. The hearing is titled “Opportunities to Improve the 340B Drug Pricing Program.” The Subcommittee last held a hearing on the program over three years ago in March 2015. The Subcommittee will look at the recent report released in June by the Government Accountability Office (GAO) recommending seven ways to improve oversight of providers’ use of 340B contract pharmacies. Additionally, the Subcommittee will review several bills and discussion drafts pertaining to the 340B program, including seven bills that have been previously introduced and eight draft bills that have not yet been introduced. Among the eight new draft bills are proposals to:
- Substantially limit the patient definition for DSH, Children’s and Free Standing Cancer hospitals;
- Provide HRSA with full authority to implement regulations;
- Increase the threshold eligibility for DSH hospitals from 11.75% to 18%, while also increasing the level of the 340B discount by 5% for DSH and Critical Access hospitals;
- Limit the amount charged to the ceiling price when selling 340B drugs to low income patients of DSH, Children’s, and Free Standing Cancer hospitals;
- Require hospitals to report on savings from 340B discounts, revenues on drug purchases, and unreimbursed and uncompensated costs;
- Create a 340B Drug Discount Administrator to increase transparency;
- Require HHS to conduct audits under the 340B program in accordance with generally accepted government auditing standards; and
- Require the implementation of all of the GAO’s recommendations in in its report on contract pharmacy oversight within three years.
Several of the new bills will affect all covered entities participating in the program and, for those focused exclusively on hospitals, the proposed legislation would set problematic precedents such as narrowing the definition of patient and limiting the price at which 340B drugs can be charged.
The hearing on the 11th follows a report released by the E&C Committee in January calling for legislative and administrative changes to the 340B program. The report, titled “Review of the 340B Drug Pricing Program,” was released following the Committee’s two-year investigation into the operation and oversight of the 340B program. Although the E&C Report acknowledged the importance of the program for safety net providers, it also recommended that Congress “clarify” the program’s intent. The report made a total of twelve recommendations, including increased administrative oversight of both covered entities and manufacturers and increased regulatory authority over the 340B program for HRSA.