340B Health reports that legislation introduced to congress June 12th may protect hospitals and other providers participating in the 340b drug discounting program against overcharging. US Rep. Doris Matsui (D-Calif) authored the Stretching Resources for Vulnerable Communities (SERV Communities) Act, which his considered, “essential to the success of the 340B program in helping safety net providers meet the health needs of low-income and rural patients across the country.” Primary functions of the bill would include:

  • Specify the purpose of the 340B program in Congress “to stretch scarce resources as far as possible, reaching more eligible patients and providing more comprehensive services” and clarifies that the discounts are given to the hospital or clinic to dedicate to best serving their community.
  • Protect providers through federal government enforcement of a 2010 law imposing monetary penalties against manufacturers that intentionally overcharge 340B providers. The Trump Administration delayed enforcement of those laws, but this bill would require that the HHS enforces these rules, and that the Government Accountability Office ensures that the HHS does so.
  • Launch a secure HSS website to give hospitals and other providers access to 340B ceiling prices.
  • Specify an established federal policy that requires manufacturers to charge 340B providers a penny for drugs that rise at a rate significantly higher than the rate of inflation, for which the law inflicts a penalty that brings the 340B price down to zero
  • Define “patient” as specified in the 1996 guidance published by HRSA.
  • Prevent manufacturers from limiting distribution networks to exclude 340B providers
  • Allow grant winners from Substance Abuse and Mental Health Services Administration to participate in 340B
  • Require HRSA to audit drug manufacturers proportionally to the share of providers it audits while and ensure that 340B prices are calculated correctly by manufacturers.
  • Reverse the nearly 30% cut in Medicare Part B reimbursement to 340B hospitals that took effect in 2018.

The bill currently has 198 cosponsors. Read the statement from 340B Healthread the bill itself, or check out the piece-by-piece summary.

Click here to ask your representative to support this legislation.

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