January 16, 2018

Cassidy Introduces Legislation to Increase Accountability in 340B Program, Ensure Drug Discounts are Passed on to Patients

U.S. Senator Bill Cassidy, M.D. (R-LA), a member of the Senate Finance Committee and the Senate Health, Education, Labor and Pensions (HELP) Committee, introduced the HELP ACT (Helping Ensure Low-income Patients have Access to Care and Treatment), which would close loopholes in the U.S. Department of Health and Human Services’ (HHS) 340B program and help hold participating hospitals accountable for passing on discounts on prescription drugs to patients.

The 340B program requires drug manufacturers to provide discounted drugs to participating hospitals and other providers that serve large numbers of low-income Americans. Providers are still reimbursed at the higher, Medicare and Medicaid rates, and there is no requirement that the positive revenue difference must be passed on to patients. Enrollment in the 340B program has roughly tripled over the past decade, increasing costs in the drug supply chain.

“The 340B program is an important resource for hospitals serving low-income areas,” said Dr. Cassidy. “But too often the program’s discounts are used to pad hospitals’ bottom lines instead of helping disadvantaged patients afford their treatments. This bill will increase transparency and accountability and help ensure these discounts reach patients.”

In recent years, government watchdogs like the U.S. Government Accountability Office (GAO), U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), and the U.S. Medicare Payment Advisory Commission (MedPAC) have identified transparency concerns and loopholes in the 340B program that enable hospitals to take advantage of Medicare and Medicaid reimbursement rates and divert resources away from the patients the program is intended to help.

Cassidy’s HELP ACT would increase transparency and strengthen reporting requirements to prevent abuse and ensure 340B discounts are used efficiently and to lower drug costs. The bill would prohibit new enrollments in the 340B program for at least two years, and require the HHS secretary to issue new reporting requirements for current program participants.

Critical access hospitals, rural referral centers, sole community hospitals, grantees and PPS-exempt children’s or cancer hospitals would still be able to enroll in the 340B program. Cassidy’s bill exempts grantees, rural and critical access hospitals from most of the bill’s new reporting requirements.