On February 2, 2024, a bipartisan coalition of senators released Discussion Draft of a Bill titled “Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now and for the Future of 340B Act” or the “SUSTAIN 340B Act” that would have wide-ranging implications for the 340B program participants. The draft seeks to clarify Congress’s intent for the 340B program, addresses contract pharmacy programs and the manufacturer restrictions on 340B pricing, provides clarity on patient definition and child site eligibility, imposes new requirements covered entities with regard to data reporting, introduces new measures to prevent duplicate discounts, prohibits discriminatory behaviors of PBMs and group health plans, and finally, introduces a user fee program.
The accompanying explanatory statement and supplemental RFI also posed questions to 340B stakeholders asking for insight and private comments related to the draft of the bill. Comments are required to be submitted no later than April 1, 2024 to Bipartisan340BRFI@email.senate.gov.
Advis encourages covered entities to review the documentation and reach out to discuss the impact of the provisions, which have been summarized below. Please call our office at (708) 478-7030 or reach out via email to further discuss the implications to your 340B program.
Contract Pharmacy Program
Summary: The Bill clarifies that contract pharmacies can be used by covered entities, and emphasizes that manufacturers participating in the 340B program are required to offer covered entities the 340B price for an outpatient drug regardless of whether the drug is dispensed at a contract pharmacy or an in-house pharmacy as requested by the covered entity; and not place conditions on the ability of a covered entity to purchase drugs at the 340B price, including a drug that is dispensed at a contract pharmacy location.
What it Clarifies: This would effectively end the manufacturer restrictions that are currently imposed on covered entities.
What the Senate Specifically Requests: The Senate Committee is still seeking guidance on what, if any, restrictions should be made to contract pharmacy utilization, such as total number and whether rural status or the growing use of limited distribution specialty drugs should impact any restrictions.
Patient Definition
Summary: While the Bill is blank in this section, the accompanying documentation notes that there is simply ambiguity here and Congress must act.
What it Clarifies: It will help to resolve the ongoing question of “what is an eligible patient” and the additional confusion brought forth by the recent Genesis case.
What the Senate Specifically Requests: Any ideas that will help clarify the definition. Including insights on whether the type of patient encounter that should be considered, the specific level of services, the length of time the relationship must exist or can be maintained without subsequent visits, dealing with the potential for multiple covered entities claiming discounts for the same patient, and HRSA auditing tools to promote consistency.
Child Sites
Summary: The Bill ties eligibility to the provider-based rules (42 CFR 413.65), which have already been more fully developed by CMS.
What it Clarifies: HRSA has gone back and forth on what is considered an eligible location and when that eligibility begins; notably between the end of the pandemic and October 27th. This Section is intended to provide a clear identification of eligible sites and the requirements related to the continued operation of those sites.
What the Senate Specifically Requests: While the Senate feels the provider-based guidelines offer structure for eligibility determinations, they are seeking additional input on factors that may need additional guidance, such as reporting and enrollment requirements as well as financial assistance policies. They are also seeking input on special considerations that should be offered for child sites located in rural communities.
Transparency
Summary: Covered entities will be required to report specific data about their use of the 340B program which will be included as an addendum to its Medicare cost report. The data submission would include information such as the number of individuals who were dispensed or administered 340B drugs cost incurred at each child site, charity care information, patient demographics, a copy of State/local contracts for non-governmental hospitals, a list of contract pharmacies, the total 340B savings realized, and a description of the covered entity’s use of savings.
What it Clarifies: This section is intended to offer insight into how covered entities are meeting the intent of the 340B program and is anticipated to address several of the manufacturers and other third-parties concerns regarding the use of the program savings.
Compliance Measures
Summary: The draft Bill proposes language that would require the Secretary to issue standardized guidance regarding HRSA audits and provide consistent and published consequences if a covered entity does not meet compliance guidelines.
What it Clarifies: Creates a generally accepted auditing standard that will allow covered entities to better prepare and meet HRSA requirements. Provides a time requirement to issuing audit results and requires consistent penalty standards.
Prevention of Duplicate Discounts
Summary: The Bill proposes the creation of a national third-party clearinghouse in an effort to address the prevention of duplicate discounts. The national clearinghouse would receive the required claim level rebate data from both State Medicaid agencies and covered entities and analyze potential repayment requirements.
What it Clarifies: It is intended to develop a consistent approach to avoiding duplicate discounts, which were cited by most manufacturers as the impetus for restricting 340B pricing.
Prohibition of Discriminatory Behavior from PBMs and Group Health Plans
Mirroring language from several state laws the Bill will prohibit PBMs and group health plans from discriminating against covered entities, contract pharmacies, and other 340B program participants. Actions specifically prohibited include:
- lower reimbursement rates for covered entities and contract pharmacies;
- refusal to contract with a covered entity or contract pharmacy;
- interfering with an individual’s choice to receive a 340B drug;
- imposing terms and conditions on covered entities and contract pharmacies that differ from other terms and conditions applied to similarly situated entities, such as chargebacks, clawbacks, or other fees.
Introduction of a User Fee Program
The Bill introduces a user fee program that would enable HRSA to oversee and administer the 340B program. Pursuant to this program, covered entities will be required to pay a fee to participate in the 340B program. The user fee amounts will amount to no greater than 0.01% of the covered entity’s 340B savings, calculated as the difference between the wholesale acquisition (WAC) and the 340B price.
Published: February 9, 2024
