Senator Cassidy Releases Report Calling for 340B Program Reform

Last week, Senate Health, Education, Labor, and Pensions (HELP) Committee Chair Bill Cassidy (R-LA) released a 195-page report calling for 340B “reform.” This report follows a partisan investigation by Senator Cassidy into the 340B program starting in September of 2023 in which he solicited specific information from a select set of hospitals, FQHCs, contract pharmacies, chain pharmacies, and drug manufacturers regarding their participation in the 340B program and their use of 340B savings.

Predating Senator Cassidy’s investigation is the establishment of the Senate 340B Bipartisan Working Group, now consisting of Senators Moran (R-KS), Baldwin (D-WI), Capito (R-WV), Kaine (D-VA), Mullin (R-OK), and Hickenlooper (D-CO), which solicited input from all 340B stakeholders starting in June of 2023. The 340B SUSTAIN Act is expected to be finalized in the coming weeks and is the most likely legislative vehicle for any 340B changes.

Senator Cassidy’s report should be viewed in light of his long-standing criticism of the 340B program and propensity to echo drug industry anti-340B messaging. Notably, he participated in 2018 HELP Committee hearings on the program, focusing his remarks on what he perceives as expansive growth, increases in insurance costs due to 340B, lack of 340B transparency, and how 340B does not help low-income patients.

In a July 11, 2024 HELP Committee hearing, Senator Cassidy blamed the 340B program for medical debt, stating that covered entities contribute to medical debt by failing to pass 340B savings directly to patients. He once sponsored a bill to create a moratorium on any new non-rural hospitals entering the program.  More recently, in February, during the National Association of Community Health Center (NACHC) Policy and Issues Forum, Senator Cassidy told attendees that he is interested in introducing legislation to increase oversight of the 340B program and to direct savings to patients rather than safety net providers. He applauded the work of NACHC and the drug industry for legislation introduced last year, the 340B Access Act, that would have dramatically undermined the 340B program for safety net providers and communities they serve.

Given his repeated attempts to weaken the 340B program, Cassidy’s selection of a small group of four providers (two hospitals and two FQHCs) and targeted questions biased against covered entities are notable for their lack of objectivity.  Cassidy’s report claims that the surveyed hospital covered entities do not pass discounts directly to patients and instead use 340B savings on capital improvement projects. While the report found that FQHCs provided significant discounts to patients on 340B drugs, the report critiqued one FQHC for relying primarily on its in-house pharmacy and another for its use of contract pharmacies.  Despite the inherent unreliability of crafting broad policy solutions based on a small survey, Senator Cassidy’s reform proposal concludes that the definition of patient must be changed and covered entities must provide direct savings to patients.

The report’s legislative “solutions,” ignore the purposeful flexibility granted by Congress when it created the 340B program, to lower drug prices without taxpayer expense, and intended policy to broaden the 340B benefit beyond discounts. Congress created the program to give covered entities the ability to provide “more comprehensive services” and to reach “more eligible patients,” as stated in the law’s legislative report language.  Limiting the program’s reach to a direct drug discount would decrease, rather than increase, health care access. Drug discounts are a fraction of the benefits provided by covered entities through 340B savings at no cost to taxpayers.

Eliminating covered entities’ use of savings to provide additional wrap around services and supports such as transportation to appointments, free or reduced cost health care services, food and housing assistance, and more, would drastically harm the patients who benefit from these offerings. This proposed reduction in services is a long-standing tactic by the pharmaceutical industry to drastically shrink the size of the program and therefore the discounts they are required by law to provide.

RWC-340B will continue to monitor the impact of Senator Cassidy’s report, including any related legislation. See RWC-340B’s views on the SUSTAIN draft and related advocacy tools.