Unpacking Sustain 340B: An Exploration Into the Drafted Bill’s 340B Impact

The 340B Drug Pricing Program, while enabling eligible healthcare organizations to purchase medications at significantly reduced prices, has faced ongoing challenges and disputes instigated by manufacturers. The Sustain 340B Act is proposed legislation designed to protect the interests of covered entities, resolve these disputes, and streamline and enhance the program’s operational effectiveness.

Background and Intent of the Act

The Sustain 340B Act was first introduced in February and has garnered bipartisan support. The Act appears to be a congressional attempt to mediate between the interests of drug manufacturers and covered entities. While it strives to create a balanced approach, several aspects of the proposed legislation remain vague, necessitating input from stakeholders.

Key Areas of Impact

1. Contract Pharmacy and Manufacturer Restrictions

1. • The Act seeks to eliminate the ability of manufacturers to arbitrarily restrict 340B pricing on eligible drugs, a significant win for covered entities. However, this is contingent upon the final definition of “patient” under the program.
   • Financial assistance policies must extend beyond primary sites to child sites and contract pharmacies, potentially through mechanisms like cash cards.

2. Registration and Reporting Requirements

1. • The Act proposes annual contract pharmacy registration, though it’s unclear if this will reduce current registration opportunities or add more requirements during annual recertifications.
   • Enhanced transparency and compliance measures are expected, with covered entities needing to demonstrate how 340B savings are utilized, particularly in charity care and other community benefits.

3. Patient Definition

1. • The patient definition is a critical yet ambiguous component of the Act. Changes here could significantly impact the eligibility of prescriptions and the overall benefits to covered entities.
   • The Act solicits feedback on various aspects of the patient definition, reflecting concerns about possibly reverting to the restrictive 2015 MEGA guidance.

4. Clearinghouse and Duplicate Discount Prevention

1. • To prevent duplicate discounts, the Act proposes the establishment of a national third-party clearinghouse. This would involve covered entities submitting 340B claims data for verification.
   • This clearinghouse is not expected to be 340B ESP, suggesting the creation of a new system funded by user fees from covered entities.

5. Child Sites and Provider Responsibilities

1. • The Act suggests that providers at child sites must be clinically responsible for care and that these sites must offer a “clinically meaningful range of services.”
   • Specific provisions apply to DSH hospitals, requiring prescribers at child sites to be either employed or under bona fide contracts.

Industry Perspectives and Concerns

Stakeholders have mixed reactions to the proposed Act. While some view it as a positive step towards resolving longstanding issues, others express concerns about increased regulatory burdens and the potential negative impact of certain provisions.

1. • Covered Entities: They generally welcome measures that curtail manufacturer restrictions and PBM discrimination but are wary of the ambiguous patient definition and additional compliance requirements.
   • Manufacturers: They are likely to support increased transparency and compliance measures but may resist changes that limit their ability to control 340B pricing.

Next Steps and Recommendations

Stakeholders are encouraged to provide feedback by the April 1st deadline. It’s essential for covered entities to assess the potential impact on their operations and prepare for possible changes.

• Immediate Actions:

1. • Review and understand the proposed changes.
   • Identify areas that require feedback and provide detailed responses to the legislative committee.
   • Prepare for possible adjustments in financial assistance policies and reporting requirements.

• Long-term Strategies:

1. • Develop internal systems to track and demonstrate the use of 340B savings.
   • Engage with industry groups to stay informed about ongoing developments and advocacy efforts.

Conclusion

The Sustain 340B Act aims to resolve ongoing challenges in the 340B Drug Pricing Program by balancing the interests of drug manufacturers and covered entities. The Act proposes crucial changes, such as eliminating arbitrary pricing restrictions and enhancing transparency and compliance. However, ambiguities around the patient definition and new compliance measures need clarification. Effective engagement and strategic planning will be essential to navigate these changes and ensure the Act achieves its goal of strengthening the 340B program for healthcare organizations and their communities.