This Month, the Bipartisan 340B Senate Working Group released a discussion draft explanatory statement and supplemental request for information (“Discussion Draft”) to the proposed “SUSTAIN 340B ACT” (“Proposed Bill”). The Proposed Bill is aimed at addressing key 340B program concerns in areas including: the patient eligibility definition, Covered Entity child site compliance, contract pharmacy arrangements, and program reporting requirements. The Discussion Draft was explicitly focused on these key areas in light of stakeholders’ comments and recent court decisions surrounding the 340B program.
1. Patient Definition
The Proposed Bill did not set forth an explicit definition for a 340B “eligible patient,” and left a placeholder for future comments. The Discussion Draft addressed this request for future comments, noting that Congress has not yet weighed in or provided a definition for what constitutes an “eligible patient” for 340B program purposes. In soliciting comments, the Senate Working Group seeks pertinent information from stakeholders as to which elements, such as type, length, and scope of the Covered Entity’s patient relationship, should be considered when determining whether a Covered Entity can claim and dispense 340B drugs to a patient.
This “eligible patient” definition was recently the subject of the Genesis Health Care, Inc. v. Becerra case, where the Federal Court in South Carolina ultimately held that a Covered Entity could claim a patient as an eligible patient so long as the Covered Entity provided healthcare services to an individual, and further expanded the “eligible patient” definition in holding that the definition did not require that a prescription originate from a Covered Entity in order to be deemed 340B eligible. This greatly expanded and reiterated the breadth of the 340B program “eligible patient” definition, even though the agency responsible for program integrity and enforcement, the Health Resources and Services Administration (“HRSA”), still publicly states that it expects a covered entity to have written a prescription in order to claim the prescription under the 340B program.
2. Contract Pharmacy Arrangements
The Proposed Bill seeks to provide statutory support for patient access, accountability, and program integrity in contract pharmacy arrangements by prohibiting manufacturers, health plans, and PBMs from providing less favorable terms to Covered Entities who use contract pharmacies (i.e. restrictive modifier and dispensing fee policies, as well lower reimbursement amounts on 340B drugs) than to non-Covered Entities and Covered Entities who have their own in-house pharmacies.
Additionally, the Discussion Draft calls for and seeks comments from stakeholders as to how Covered Entities are currently utilizing contract pharmacies in light of geographic and/or other manufacturer restrictions, how manufacturer restrictions disproportionately impact rural and underserved areas in their ability to access drugs, as well as the effect of manufacturer restrictions on access to specialty medications from limited contract pharmacy providers.
3. Child Site Compliance
The Proposed Bill and Discussion Draft seek to set more rigid requirements on Covered Entities to ensure that a Covered Entity’s “Child Site” is connected to the Covered Entity in such a way that the Covered Entity and Child Site share common ownership, operation, and control.
4. Increased Transparency and Reporting
If ultimately passed, the Proposed Bill will require Covered Entities to disclose the amount of 340B savings generated by the Covered Entity’s 340B program, as well report on how such savings are used by the Covered Entity. In order to equip the HRSA with appropriate resources to properly oversee and administer the 340B program, the Proposed Bill would require Covered Entities to pay a “user fee” in the amount of no greater than 0.01% of the Covered Entity’s 340B savings.
Next Steps
In response to the Discussion Draft, the Bipartisan 340B Senate Working Group urges 340B program stakeholders to review the document and submit comments in writing no later than April 1, 2024.
How Frier Levitt Can Help
In response to the Proposed Bill and Discussion Draft, Frier Levitt can assist interested parties and stakeholders in submitting comments to the Senate Working Group. Frier Levitt has experience in assisting organizations navigate the complex web of the 340B program and can provide guidance in light of current and upcoming legislative and agency action.
