Commentary
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In an ambitious effort to address the ongoing uncertainty within the 340B Program space, 6 senators released a draft discussion bill earlier this year titled the SUSTAIN Act.
It continues to be an eventful and tumultuous time in the 340B Drug Pricing Program space, with little indication that the current environment will change any time soon. Numerous drug manufacturers continue to impose restrictive 340B pricing policies available via 340B contract pharmacy arrangements in contravention of the Health Resources and Services Administration's (HRSA) applicable 340B Program rules and guidance. Ongoing litigation over these manufacturer restrictions, along with separate litigation challenging HRSA’s historic 340B eligible patient requirements,1 has further eroded the agency’s enforcement authority and created significant uncertainty surrounding the manner in which different types of 340B stakeholders can (or must) operate. Increased scrutiny on 340B covered entities’ savings utilization has also become a flashpoint.
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A growing number of state legislatures have begun to fill in some of the gaps, introducing laws protecting 340B pricing access via contract pharmacy arrangements for covered entities in their states, as well as legislation requiring covered entities to be more transparent on 340B savings use by implementing reporting requirements.2 However, this piecemeal approach, combined with the continued uncertainty over HRSA’s ability to enforce its current rules and guidance, have arguably triggered a growing appetite in Congress and within 340B stakeholder groups to consider comprehensive federal legislation that would address and solidify the 340B Program’s parameters.
Historically, 340B-related federal legislation intended to modify or supplement the Program has effectively been a nonstarter—no 340B Program-specific federal laws or formal regulations have been passed since the 340B statute itself was enacted back in 1992. However, 6 bipartisan Senators colloquially referred to in 340B Program circles as the “Group of 6” are looking to change that.
340B Sustain Act
In an ambitious effort to address the ongoing uncertainty within the 340B Program space, Senators John Thune (R-SD), Tammy Baldwin (D-WI), Jerry Moran (R-KS), Shelley Capito (R-WV), Ben Cardin (D-MD), and Debbie Stabenow (D-MI) released a draft discussion bill earlier this year titled the Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now and for the Future of the 340B Act (SUSTAIN Act).3 Many 340B stakeholders view the draft SUSTAIN Act as an important initial step to crafting comprehensive “compromise” legislation that better and more clearly defines 340B Program parameters. Unlike most other previous federal efforts to modify the 340B Program, the SUSTAIN Act contains benefits and concessions for and from both covered entities and manufacturers.3 To that end, some 340B Program observers are cautiously optimistic that this legislation may have a better chance of gaining traction in Congress.
At a high level, the SUSTAIN Act proposes the following key changes:3
SUSTAIN Act Feedback from Stakeholders
The 6 Senators included a request for information (RFI) in their release, allowing interested parties to provide feedback on various proposed aspects of the draft bill.
The areas that tended to generate the most disagreement among comment submitters involved the 340B eligible patient definition, 340B contract pharmacy utilization, and 340B reporting and transparency initiatives. The positions of the various stakeholder groups are not surprising but do illustrate key philosophical differences as to the nature and scope of the 340B Program.
Michael French, JD, and Madison Hartman, JD, are associates with Quarles & Brady.
Richie Davis, JD, is a partner with Quarles & Brady.
Brenda Shafer, JD, is a partner and National Chair of the Health & Life Sciences Practice Group with Quarles & Brady.
What’s Next?
It is expected that the “Group of 6” will regroup to consider points and argument raised within the comment submission and make applicable revisions to the draft bill before formal introduction at a later date. Given the differing positions of key 340B stakeholder on several key elements of the bill, it’s likely that the bill’s drafters will attempt to find some compromise positions, where each side will get some (but not all) of what they want.
The timing of the introduction and extent to which the draft bill will be modified is unclear at this stage. Even once introduced, passage in the near future is unlikely due to ongoing Congressional gridlock exacerbated by the upcoming presidential election. However, the thoughtful nature of the draft bill and continued involvement of nearly all types of 340B stakeholders signals that the SUSTAIN Act could eventually serve as the vehicle for significant 340B Program clarifications and changes. Stakeholders should continue to closely track the bill’s progress and identify updates proposed in the Act that could prompt operational changes.
