340B Oversight Gathering Steam In Senate; HELP Committee Plans Hearing

With several pieces of legislation in play that could overhaul 340B transparency and oversight, hospitals and sponsors will have a lot on the line during Senate hearing planned for 'early spring.'  

The US Senate Health, Education, Labor and Pensions Committee will jump into the fray on 340B program reform in the coming weeks with an oversight hearing.

“As the committee of jurisdiction over the 340B program, the HELP committee has been analyzing the numerous reports, studies, and proposals from other committees and organizations," a committee spokesperson said. Chairman Lamar Alexander, R-La., "is planning an oversight hearing on the issue in early spring.”

The session will mark a new level of engagement on 340B issues in the Senate, following a series of oversight hearings in the House. It signals that momentum is building around legislative action to curb the 340B program through increased transparency and enhanced regulatory oversight of participating hospitals.  

The House Energy & Commerce Committee held three 340B oversight hearings during 2015 and 2017, which informed a series of recommendations issued by the committee in January. (Also see "340B Provider Reforms Gaining Momentum In Congress" - Pink Sheet, 11 Jan, 2018.)

In the recommendations, the House panel expressed concern that oversight of 340B by the HHS Health Resources and Services Administration (HRSA) has not been able to keep pace with the rapid growth of the program. It also urged clarity about Congress' intent in establishing the program and advocated for additional regulatory authority and resources for HRSA.

A growing number of bills to reform 340B have been introduced in the House and Senate. Legislation sponsored in the Senate by Sen. Bill Cassidy, R-La. and in the House by Reps. Larry Bucshon, R-Ind., and Scott Peters, D-Cal., would suspend certain hospitals from enrolling in the program for two years and impose reporting requirements on how savings from the program are used in order to enhance transparency.

Cassidy's bill would additionally implement clear program eligibility standards for hospitals and their offsite outpatient facilities and create a new modifier for drug claims that would make it easier to identify and prevent instances when manufacturers provide both 340B and Medicaid discounts for the same drug.

Other bills from the Energy & Commerce Committee may be forthcoming. "We continue to actively work with committee members to review a number of legislative proposals seeking to reform and strengthen the 340B drug pricing program," a committee spokesperson said.

Grassley Bill Would Require Transparency

Sen. Chuck Grassley, R-Iowa, introduced legislation March 1 that is also aimed at improving transparency in the program. The bill would require participating hospitals to report the total acquisition costs for drugs collected through the 340B program, as well as revenues received from all third party payers for those same drugs.

"By understanding the difference in those two amounts, Congress will be able to assess whether the program is working as intended," Grassley said in a statement on the bill.

A recent study published in the New England Journal of Medicine found that financial gains obtained by hospitals through the program were not associated with "clear evidence" of expanded care or lower mortality among low-income patients.

"We found no evidence of hospitals using the surplus monetary resources generated from administering discounted drugs to invest in safety-net providers, provide more inpatient care to low-income patients, or enhance care for low-income groups in ways that would reduce mortality," researchers Sunita Desai, New York University, et al., reported.

"These results suggest hospital responses that are contrary to the goals of the program."

The research, which was based on Medicare Part B claims, was funded by the Agency for Healthcare Research and Quality, the Robert Wood Johnson Foundation and the Marshall J. Seidman Center for Studies in Health Economics and Health Care Policy at Harvard Medical School.