Three takeaways from the E&C 340B hearing


June 5, 2024 3:06 pm

Lawmakers on the House Energy and Commerce Oversight and Investigations Subcommittee on Tuesday probed ways to reform the controversial 340B program amid fears of pending litigation.

The hearing comes as efforts to reform the program gain steam on the Hill. The program mandates drugmakers sell outpatient drugs at discounts to hospitals, community health centers and many provider-based rural health clinics.

Republicans on the committee last week proposed a bill authorizing HHS to audit hospitals on how they use their 340B savings, redefining “patient” and establishing criteria for contract pharmacy arrangements. The American Hospital Association has opposed the legislation, arguing that it would limit hospital participation and create unworkable compliance rules. A bipartisan Senate working group has also recently floated a discussion draft to bolster transparency and to consider how to define what a “patient” in the program is.

Full committee ranking member Frank Pallone (D-N.J.) criticized Republicans during the hearing for not inviting drugmakers and HHS officials to testify.

“The Republicans did not have a single drug manufacturer here to talk about their part of the program. We will also not hear from the Health Resources and Services Administration, HRSA, about what the agency needs to oversee the program,” he said.

Witnesses included health policy experts as well as executives from health care systems and hospitals, the latter of which affirmed the value of the program to patients, often referring to it as a “lifeline.”

Here are takeaways from the hearing:

1. Lawmakers fear inaction could give courts the upper hand

Some lawmakers worry that pending lawsuits challenging 340B requirements, including whether drugmakers can limit how many 340B pharmacies they ship to, could decide the future of the program before Congress does. A recent court decision on restricting pharmacies sided with drugmakers.

“I worry this entire program will continue to be legislated by the courts,” Rep. Scott Peters (D-Calif.) said. Other members also said recent court rulings have created uncertainty in the program and stripped HRSA of some of its oversight ability.

2. Everyone wants transparency but disagrees on how

Some Republicans on the committee want hospitals to report how they’re using the savings from the 340B program — aligning those reporting requirements with those used by community health centers.

Anthony DiGiorgio, a neurosurgeon and professor at the Institute for Health Policy Studies at the University of California, San Francisco, told lawmakers there are “bad actors” among hospitals that don’t use 340B savings as intended by the program.

But some providers pushed back on the proposed requirements in the GOP bill.

Sue Veer, president and CEO of Carolina Health Centers, a community health system, was skeptical about applying the same reporting requirements for community health centers to all 340B entities.

“Dealing with a single entity-section solution doesn’t work,” she told Rep. Buddy Carter (R-Ga.), who co-introduced the legislative reforms.

She suggested transparency metrics that “outline the population served,” including their insurance status and poverty levels.

“Just uninsured patients is not adequate. It’s important to look at the overall profile of the patients that are served,” she said. She called the bill a “starting place.”

Matthew Perry, president and CEO of Genesis HealthCare System, also told Carter he wasn’t opposed to transparency but is “opposed to transparency that cherry-picks the type of information that completely distorts what 340B is designed to do.”

3. Who can use the program, and where can savings go? There’s uncertainty.

Democrats on the committee highlighted how 340B facilities in their districts use their savings to benefit patients and also asked providers who testified Tuesday how they’re using their savings. Veer replied to a question from subcommittee ranking member Kathy Castor (D-Fla.) by describing a home-visitation pediatric program her health centers operate.

“We’ve been able to really increase our access to all families [through the program] because of our contributions from 340B,” Veer said.

“And that’s due to the flexibility 340B provides,” Castor replied. “I appreciate your recommendations for some reforms, but you’re not recommending in any way we scale back the flexibility to determine the needs in the community.”

“No, I would not want to just scale back the flexibility, because every community is different,” Veer responded.

Republicans were more skeptical.

“There’s currently no requirement that 340B-covered entities pass savings onto patients,” Rep. John Joyce (R-Pa.) said, suggesting that participating hospitals are not offering drug discounts to patients, which Perry disagreed with.

Rep. Dan Crenshaw (R-Texas) asked whether specifying who is considered a patient in the program, or using a patient ID, can generate savings for patients who receive drugs through a 340B pharmacy. Some Republicans have argued that the current HRSA guidance on which patients can use the program is too overly broad.

Perry replied that his hospitals do track patients, but added that accidentally duplicating patients under a new tracking method might lead to losses for the hospital.