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On October 23, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held a hearing on the 340B program, examining whether 340B savings are reaching patients and what statutory changes might strengthen oversight without undermining the safety net. The hearing comes amid heightened congressional attention to the 340B program, following a HELP Committee majority report released in April on "how covered entities use and generate revenue from the 340B Drug Pricing Program" and recently reintroduced legislation to enhance 340B transparency (340B Affording Care for Communities and Ensuring a Strong Safety-net (ACCESS) Act (H.R. 5256)). Committee Chairman Bill Cassidy (R-LA) focused his opening remarks on the rapid growth of and what may be viewed as perverse incentives within the 340B program, highlighting in particular a number of outstanding recommendations issued by the Government Accountability Office (GAO) in reports over the past several years.
Witnesses from GAO, the Congressional Budget Office (CBO), and the University of California, Los Angeles agreed that oversight of the 340B program remains weak. GAO described weaknesses in the Health Resources and Services Administration's (HRSA's) monitoring of hospital eligibility, contract pharmacies, and duplicate Medicaid discounts. GAO also noted that the statute does not require pass-through of discounts to patients or reporting on how 340B revenues are used. CBO presented data from its September 2025 report showing that 340B purchases grew from $6.6 billion in 2010 to $43.9 billion in 2021. As outlined by the report, this 19 percent annual growth rate—driven largely by hospitals—suggests that the program itself may be contributing to higher drug spending and market consolidation, though results vary across studies.1
Member questions reflected bipartisan interest in patient benefits with enhanced access, particularly in rural and underserved communities. Senators from both parties highlighted the reliance on 340B among rural facilities and federally qualified health centers, while others pressed for a clearer patient definition and closer scrutiny of pharmacy benefit managers (PBMs) and contract pharmacy arrangements. There was also some discussion of HRSA's proposed 340B Rebate Model Pilot Program, a new pilot announced in July that offers a voluntary mechanism for drug manufacturers of select covered outpatient drugs to provide 340B discounts via post-sale rebates rather than upfront discounts. Members raised concerns that the pilot may pose risks for safety-net providers, with one example of a community health center projecting a 2,360 percent increase in upfront drug costs under such a model.2
A bipartisan working group of several HELP Committee members, led by Sens. Tammy Baldwin (D-WI) and Jerry Moran (R-KS), will continue drafting legislation focusing on a more precise patient definition, calibrated rules for contract pharmacies and child sites, transparency on use of program revenues, and stronger federal enforcement authority.3
Footnotes
1. For more on the CBO report, Manatt on Health subscribers can see the September 15 edition of Insights This Week.
2. For more on the pilot program, Manatt on Health subscribers can see the August 4 edition of Insights This Week.
3. For more on the 340B working group, Manatt on Health subscribers can see the March 24 edition of Insights This Week.
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