Bipartisan Senate Support Emerges for 340B Reform at HELP Committee Hearing

October 25,2025

washington D.C. – A bipartisan chorus of senators expressed support for overhauling the 340B drug discount program during a recent Senate Health, Education, Labor, and Pensions committee hearing. While acknowledging the program’s original intent to aid vulnerable populations, lawmakers voiced concerns about its substantial growth and questioned whether it is still effectively serving its purpose.

The evolution of 340B: From aid to Complexity

Established over three decades ago, the 340B program initially allowed healthcare providers serving predominantly low-income patients to purchase outpatient drugs at reduced prices. Though, the program has expanded dramatically. Current participation now exceeds 60,000 entities, a six-fold increase as the year 2000.This expansion has coincided with a rise in federal spending and concerns about program efficiency.

Recent analysis from the Congressional Budget office indicates that the 340B program may, in some instances, contribute to higher healthcare costs due to incentives for consolidation and the prescription of more expensive medications. Senator Bill Cassidy, Chairman of the HELP Committee, emphasized this concern, stating that the program’s growth is directly linked to escalating healthcare expenses.

Oversight Gaps and Accountability Concerns

Drug manufacturers have alleged that some 340B participants are serving ineligible patients and engaging in duplicate discounting practices.Testimony from Michelle Rosenberg, Director of Healthcare at the U.S. Government Accountability Office, highlighted deficiencies in federal oversight. The Health Resources and Services Governance (HRSA), the agency responsible for overseeing 340B, currently lacks sufficient data to verify the eligibility of participating hospitals and ensure compliance with discounting regulations.

“The program has become increasingly complex over the years and federal oversight needs to catch up to ensure it operates as intended,” Rosenberg explained during the hearing.

Bipartisan Efforts Towards Reform

A bipartisan working group, led by Senators Jerry Moran, Tammy Baldwin, Shelley Moore Capito, Tim Kaine, Markwayne Mullin, and John Hickenlooper, is spearheading efforts to address these concerns. Proposals include enhancing transparency in revenue generation and expenditure, increasing HRSA’s auditing capabilities, and tightening restrictions on the use of “child sites” – facilities benefiting from 340B discounts.

Senator Roger Marshall expressed optimism about enacting legislation before the end of the year. However, other senators, including Kaine and Patty Murray, cautioned against changes that could jeopardize access to care, particularly in light of potential cuts to Medicaid and the possible expiration of Affordable Care Act subsidies.

Rural Hospitals and the 340B Lifeline

The debate surrounding 340B reform underscores the delicate balance between addressing program inefficiencies and protecting vulnerable healthcare providers. Senator Tommy Tuberville emphasized the crucial role the program plays for rural hospitals, stating that 83% of facilities in his state operate at a loss and rely on 340B discounts for survival.

Experts acknowledge the need to avoid unintended consequences that could limit access to care. Dr. William Feldman, a health policy researcher, stressed the importance of ensuring that program reforms prioritize serving disadvantaged patient populations. He also suggested addressing aggressive debt collection practices and providing greater financial assistance to patients.

Key 340B Statistics

metric	Data (as of 2024)
Number of 340B Participants	Over 60,000
Program Growth Sence 2000	600%
rural Hospitals Operating at a Loss (AL)	83%

Did You Know? The 340B program was originally created as part of the Veterans Health Care Act of 1992.

Pro Tip: Healthcare organizations should proactively review their 340B compliance procedures to mitigate potential risks and ensure program integrity.

As discussions continue, the central challenge remains: how to refine the 340B program to achieve its original goals of affordability and access while ensuring responsible stewardship of taxpayer dollars.

Understanding the 340B Program: A Long-Term Viewpoint

The 340B program’s evolution reflects broader trends in the healthcare landscape, including increasing drug costs, consolidation of healthcare providers, and ongoing debates about access to care. The program’s future will likely be shaped by policy decisions related to prescription drug pricing, healthcare financing, and the role of government in regulating the pharmaceutical industry. Further reforms may involve exploring alternative discount models, enhancing data transparency, and strengthening enforcement mechanisms.

Frequently Asked Questions About the 340B Program

1. What is the 340B program? The 340B program allows eligible healthcare providers to purchase outpatient drugs at significantly reduced prices.
2. Who is eligible for 340B discounts? Eligible entities include hospitals, clinics, and other healthcare facilities that serve a disproportionate share of low-income patients.
3. What are the concerns surrounding the 340B program? Key concerns include program growth, rising costs, lack of oversight, and potential for misuse of discounts.
4. What reforms are being considered for the 340B program? Proposed reforms include increased transparency, enhanced audits, and restrictions on ‘child sites’.
5. How do these changes affect rural hospitals? Rural hospitals are particularly reliant on 340B discounts for financial stability,and any reforms must consider their unique needs.
6. What role does HRSA play in the 340B program? HRSA oversees the 340B program and is responsible for ensuring compliance with program regulations.
7. Is the 340B program financially enduring in the long term? This is a key question being debated by lawmakers,with concerns about the program’s impact on federal spending.

What are your thoughts on the proposed 340B reforms? Do you believe they will effectively address the program’s challenges while protecting access to care? Share your perspective in the comments below.

What specific concerns regarding contract pharmacy arrangements were highlighted during the HELP Committee hearing?

Key Takeaways from the October 25th Hearing

A significant development unfolded today at the Senate Health, Education, Labor & Pensions (HELP) Committee hearing regarding the 340B drug pricing program.For the first time in recent memory,strong bipartisan support for meaningful 340B reform was demonstrably on display. The hearing focused on addressing critical issues within the program, including concerns about oversight, program integrity, and the impact on both safety-net hospitals and pharmaceutical manufacturers. This signals a potential shift towards legislative action,a prospect that has been stalled for years.

Understanding the Core Issues Driving Reform

The 340B program, established in 1992, was originally designed to stretch limited federal resources by allowing eligible healthcare organizations – primarily hospitals serving vulnerable populations – to purchase outpatient drugs at substantially reduced prices. Though, the program has expanded dramatically, leading to a complex web of challenges.

Here’s a breakdown of the key areas of concern:

* Contract Pharmacy Arrangements: The increasing use of contract pharmacies – where 340B purchased drugs are dispensed to patients through retail pharmacies – has raised concerns about diversion and inflated pricing.

* Manufacturer Disparities: Pharmaceutical manufacturers have increasingly restricted 340B access, citing concerns about duplicate discounts and the program’s impact on innovation. This has led to 340B drug pricing disputes and access issues for patients.

* Oversight & Accountability: Limited oversight and a lack of clear guidance have contributed to inconsistencies in program implementation and potential for abuse.

* Hospital System Growth: The expansion of the 340B program to include larger hospital systems, some wiht significant financial resources, has sparked debate about whether the program is still effectively serving its intended beneficiaries.

Bipartisan Areas of Agreement

Despite differing perspectives, several areas of agreement emerged during the HELP Committee hearing, suggesting a path forward for 340B legislation:

1. Enhanced Oversight: both Democrats and Republicans expressed a need for increased oversight of the 340B program, including more robust audits and data collection. Specifically, there was discussion around strengthening the Health Resources and Services Administration’s (HRSA) oversight capabilities.
2. Contract Pharmacy Regulation: There’s growing consensus around the need to clarify and regulate contract pharmacy arrangements to prevent diversion and ensure appropriate access to discounted drugs. Proposals include stricter requirements for contract pharmacy agreements and enhanced monitoring of dispensing patterns.
3. Program Integrity Measures: Lawmakers on both sides of the aisle acknowledged the importance of strengthening program integrity measures to prevent fraud and abuse. This includes improving data matching capabilities and increasing penalties for violations.
4. Protecting Vulnerable Patients: A shared commitment to ensuring that vulnerable patients continue to have access to affordable medications was a recurring theme throughout the hearing. Any reforms must prioritize patient access.

Potential Legislative approaches

Several legislative approaches are being considered to address the identified challenges. These include:

* HRSA Guidance Clarification: Codifying and clarifying HRSA guidance on key aspects of the 340B program, such as contract pharmacy arrangements and manufacturer obligations.

* Independent Audits: Mandating independent audits of 340B program participants to ensure compliance with program requirements.

* Data Openness: Requiring greater data transparency from both 340B hospitals and pharmaceutical manufacturers to improve program oversight and accountability.

* Dispute Resolution Mechanisms: Establishing a clear and efficient dispute resolution mechanism to address 340B pricing disputes between hospitals and manufacturers.

Impact on stakeholders: Hospitals, Manufacturers, and patients

340B reform will inevitably impact all stakeholders.

* Hospitals: Hospitals, especially those serving vulnerable populations, rely on 340B savings to fund critical services. Reforms must carefully balance the need for program integrity with the need to preserve access to affordable medications for their patients.

* Pharmaceutical Manufacturers: Manufacturers argue that the 340B program distorts the market and undermines innovation. They are seeking greater control over program participation and more predictable pricing.

* Patients: Ultimately, the goal of any 340B reform shoudl be to ensure that patients have access to affordable medications. Reforms must avoid unintended consequences that could limit patient access or increase costs.

Real-World Example: The Impact of Manufacturer Restrictions

In early 2023,several major pharmaceutical manufacturers began implementing restrictions on 340B access,citing concerns about contract pharmacy arrangements. This led to significant disruptions in patient care at safety-net hospitals across the country. Such as, MetroHealth in Cleveland, Ohio, reported a $10 million loss in 340B savings due to manufacturer restrictions, forcing them to reduce services and delay capital projects.This illustrates the real-world consequences of 340B drug pricing disputes and the urgent need for legislative solutions.

Benefits of Triumphant Reform

Successful 340B reform could yield several benefits