How could the second Trump administration affect the federal 340B Drug Pricing Program? It’s yet to be determined, according to policy experts.
Predicting how the election could ultimately affect the program “is above my pay grade,” joked Maureen Testoni, JD, the president and CEO of 340B Health, a nonprofit organization representing more than 1,500 hospitals and health systems that participate in the 340B program. However, during President-elect Donald Trump’s prior term, “we didn’t see a lot of action on 340B,” she said in a Nov. 19 press briefing.
Early on in that administration, Medicare cut its reimbursement for Part B 340B drugs by nearly 30% and redistributed the money through higher payments for nondrug services to all hospitals paid under the Medicare Outpatient Prospective Payment System, Ms. Testoni said. But hospital associations sued over the cuts, and the U.S. Supreme Court overturned them in 2022.
That process started at the staff level, well before Mr. Trump came into office. He “doesn’t have a record of doing a lot to try to shrink 340B or hasn’t expressed a lot of concern about manufacturers around 340B,” she said.
There are several areas to watch, Ms. Testoni advised:
Legislation aimed at ensuring access: In the Senate, incoming majority leader John Thune (R-S.D.) has been a champion of the 340B program and has worked with other senators to develop comprehensive 340B legislation. For example, he is part of a bipartisan group that has debated the SUSTAIN 340B Act, which among other changes would ensure hospital access to discounted drugs through community and specialty contract pharmacies. The bill is currently in discussion draft mode and has not been introduced. “I’m not sure how that will work out going forward, but I think he will always be interested in 340B and play a role in it, because he’s spent so much of his political time in office very much aware of how important 340B is for his hospitals,” Ms. Testoni said.
Continuing investigations. Sen. Bill Cassidy, MD (R-La.), tapped to be the chair of the Senate Committee on Health, Education, Labor and Pensions, has been involved in investigations into two 340B hospitals, two community health center networks, two 340B pharmacy chains and two drug manufacturers, probing their use of 340B savings and the role that pharmacy partners and drug companies play in the 340B program. Those are likely to continue, Ms. Testoni said, and results could spur new legislation.
Bills seeking to limit the 340B program. The House of Representatives historically hasn’t passed legislation to shrink or limit 340B, “so it’s hard to say where they would go,” Ms. Testoni said. “But I really believe that the 340B is not a partisan program at all. It never really has been. We have always had significant support from both parties.”
For example, she said, a recent congressional letter urged the Health Resources and Services Administration (HRSA) not to allow Johnson & Johnson to move forward with its proposed rebate plan. J&J’s proposal would require certain 340B covered entities—specifically, disproportionate share hospitals—that purchase J&J’s drugs Stelara (ustekinumab) and Xarelto (rivaroxaban) under the 340B Drug Pricing Program to purchase drugs at full price and receive a rebate at a later point, Ms. Testoni said.
The letter, which called the proposal an “unapproved and unlawful change that would have severe consequences for our nation’s safety net providers and the patients they serve,” had “a fair number” of Republican co-signers, Ms. Testoni noted.
Most members of both parties “really do understand the impact of 340B on their hospitals, on their communities and what it could mean if it was significantly reduced in terms of the number of hospitals that could participate or the types of patients that could qualify,” she said.
Eli Lilly has a proposed a similar rebate plan, and both manufacturers “are pushing hard” for their adoption, Ms. Testoni noted. HRSA has not approved either plan and threatened the manufacturers with “some pretty big sanctions,” she said. And both filed lawsuits against HRSA this month. Kalderos, a drug company vendor, also has floated the idea of a rebate program and filed suit.
‘An Existential Threat to Health Systems’
David Hager, PharmD, FASHP, a senior director at Visante, noted that, “nationally, we are hearing from almost all of the health care executives we work with about their nervousness, given the vast uncertainty surrounding potential changes to the 340B program. In almost every one of our interactions, this is the first question we get.” These executives also have expressed concern that, given ongoing financial pressures, any policy that significantly curtails 340B access and/or discounts “poses an existential threat to health systems,” Dr. Hager said. “The uncertainty already is causing some to delay financial investments to prepare for what could come next.”
A variety of professional organizations, Dr. Hager added, are attempting to predict where the administration may go on 340B policy, “but there are very few guarantees,” he said. “The belief broadly is there will be continued pressure on contract pharmacy arrangements.”
Visante’s advice to executives “is to make sure they have internal or external resources to monitor the situation daily and work now on contingency plans and potential responses if the 340B program were to materially change,” Dr. Hager said.
Dr. Hager and Ms. Testoni reported no relevant financial disclosures beyond their stated employment.
This article is from the January 2025 print issue.