News Rundown 6/28/26: 340B Reform!

There's 340B Legislation Cooking!

Senate HELP Chair Bill Cassidy released a discussion draft Thursday to overhaul the 340B drug discount program, formally titled the “340B Drug Pricing Integrity and Affordability for Patients Act.” The draft would allow manufacturers to provide 340B pricing through upfront discounts, retrospective rebates, or a government-operated claims repository; it would also require standardized claims data, impose new contract-pharmacy limits for certain hospital covered entities, and require hospital covered entities to apply sliding-scale patient affordability protections for covered outpatient drugs.

The 340B program is no longer the drug discount program envisioned in 1992 when it was enacted. It has grown into an $80+ billion-a-year subsidy stream for large hospital corporations. HRSA reports that covered entities purchased $81.4 billion in covered outpatient drugs through the program in 2024. The program encourages behavior that can increase federal spending and insurance premiums. It incentivizes hospitals to prescribe higher-priced drugs and consolidate by purchasing independent clinics. It increases prices by forcing insurance plans to forgo rebates. CBO has warned that the program can increase federal spending through these mechanisms, while GAO has documented persistent oversight weaknesses.

A major issue with the program is the lack of oversight. GAO said HRSA’s audits do not fully assess duplicate-discount compliance and that HRSA’s oversight does not ensure that only eligible hospitals participate.

So Cassidy’s bill is best understood as an attempt to make 340B behave more like a patient-centered safety-net program without actually converting it into one.