#SubHealth Reviews 340B Program and Recent Report on Contract Pharmacies


Members Considered 15 Bills and Discussion Drafts to Strengthen Program


The Subcommittee on Health, chaired by Rep. Michael C. Burgess, M.D. (R-TX), held a hearing to learn more about a recent report by the nonpartisan Government Accountability Office (GAO) regarding lax oversight of contract pharmacies within the 340B Drug Pricing Program (340B Program). In addition, #SubHealth received feedback on several bills and discussion drafts that would strengthen the 340B Program.


“In many ways, the 340B Program is certainly a success. Yet, at the same time, there are numerous ways in which the program’s current operation raises valid concerns. Multiple reviews by nonpartisan auditors have identified notable challenges with the program’s current operation and oversight,” said #SubHealth Chairman Burgess.

Since its creation by Congress more than 25 years ago, the 340B Program has helped provide life-saving medicines at reduced prices to certain safety-net health care providers. … But it’s important to note that a lot has changed since the program’s creation. The number of unique hospital organizations participating in the program has nearly quadrupled in just five years – increasing from 3,200 participating hospitals in 2011 to 12,148 in October 2016,” said Energy and Commerce Committee Chairman Greg Walden (R-OR).



#SubDCCP Chairman Bob Latta (R-OH) asked Dr. Draper what recommendation she felt was most important to improve the integrity of the 340B Program. Dr. Draper stressed that all seven recommendations from the recent report would go a long way in addressing program integrity, despite the Health Resources and Services Administration (HRSA) disagreeing with implementing three of them.

“I think that they need to implement all of them. I think that one of the big ones is the duplicate discounts. That needs to be clarified because … no one knows the potential for the amount of duplicate discounts. That’s definitely a clear prohibition of the program.” – Dr. Draper

Rep. Larry Bucshon (R-IN) also questioned Dr. Draper about recommendations to improve the program, particularly when it comes to transparency. In an exchange with Dr. Draper, Rep. Bucshon asked when GAO first made recommendations to HRSA. Dr. Draper stated that they were issued in 2011, “and they [HRSA] still have two yet to be implemented.”

The witnesses spanning both panels agreed that both transparency and accountability are critical to ensure the future success of this program.

Rep. Buddy Carter (R-GA) posed a series of questions to Dr. Draper regarding the unclear patient definition within the program. Dr. Draper acknowledged that is one of their unimplemented recommendations to HRSA. In the questioning, the two discussed a recent memo from the Congressional Research Service to Sen. Bill Cassidy (R-LA). The memo indicated that under the current framework of the program, a movie star could go to a 340B hospital to receive Botox, and receive the benefits of the program. When asked if that scenario was possible, Dr. Draper said it was, stating that those outpatient drugs would be covered.

Dr. Patt testified on behalf of Texas Oncology and the Community Oncology Alliance (COA) and spoke to her career of treating cancer patients across the Lone Star State.

In doing so, Dr. Patt shared some of her concerns with the program and offered suggestions on areas where improvements could be made, stating, “When cancer care is shifted from private practices to the hospital outpatient department, the cost of care doubles. I share this committee’s commitment to maintain the 340B drug discount program by reimagining it to include meaningful enhancements to the program, including reforms to enhance program oversight, transparency, and accountability.”


In January 2018, the Energy and Commerce Committee released a report reviewing the 340B Program. The report made 12 recommendations for Congressional and agency action that would help improve both the administration of the program and oversight.

To learn more about the committee’s review of the 340B program, visit the following links: #SubHealth’s March 2015 hearing on the program, #SubOversight’s July 2017 hearing on oversight challenges of the program, and #SubOversight’s October 2017 hearing featuring covered entities.

The Majority Memorandum, witness testimony, and an archived webcast are available online HERE.  


Health (115th Congress)