340B Reforms Introduced in Congress
The federal 340B Drug Pricing Program was created in 1992 to help federally funded clinics and public hospitals that serve a large uninsured population cover the cost of drugs and provide discounts to patients. The lack of a clear patient definition and inadequate accountability and transparency have allowed hospitals and contract pharmacies to generate profits at the taxpayers’ and patients’ expense. Following changes to 340B in 2010 under the Affordable Care Act, the program has grown exponentially to become the second largest prescription drug program after Medicare Part D, spending more than $100 billion in 2025. The Council for Citizens Against Government Waste’s (CCAGW) recommendations for reforming the 340B program include defining a patient and requiring covered entities (CEs) to transparently disclose their 340B revenues and expenditures to prioritize patient savings. During the second session of the 119th Congress, two bills and a discussion draft were introduced to reform 340B.
H.R. 9599, the Strengthening the Exercise of Controls and Upgrading Requirements for Efficiency (SECURE) 340B Act, introduced by Reps. Scott Peters (D-Calif.) and John Joyce (R-Pa.) on July 6, 2026, would establish a statutory definition of a 340B-eligible patient. An individual would qualify if he or she received an outpatient service from a CE within the preceding 24 months, the prescription was directly related to that service, and the covered provider maintained a documented clinical relationship with the patient. It would also require independent audits of all CEs and affiliated sites every two years and require covered hospitals to provide financial assistance to patients served through contract pharmacies with incomes up to 400 percent of the federal poverty level.
S. 5244, the Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now (SUSTAIN) 340B Act, introduced by Sen. Jerry Moran (R-Kan.) on August 5, 2026, would use a more restrictive patient definition. Patients would need an outpatient service within the preceding 24 months, an auditable medical record maintained by the CE, and a prescription resulting directly from that service or an authorized referral. The proposal would exclude individuals whose only connection to a CE was drug administration, infusion, or dispensing, while allowing certain emergency department and inpatient discharge prescriptions and documented referrals to outside specialists.
On June 25, 2026, Senate Committee on Health, Education, Labor and Pensions Chairman Bill Cassidy (R-La.) released a discussion draft of the 340B Drug Pricing Integrity and Affordability for Patients Act, which combines a statutory patient definition with mandatory affordability requirements. Like the SECURE Act, it would require a documented provider-patient relationship and an outpatient encounter within two years. However, the draft bill also requires CEs to establish income-based pricing scales for 340B medicines, disclose net 340B revenues, uncompensated charity care, and patient demographics. The draft bill also permits drug manufacturers to choose among upfront discounts, retrospective rebates, or a claims-based approach, while requiring centralized claims verification, and limits covered hospitals to five contract pharmacies, excluding mail-order pharmacies, and require them to be located within the CE’s service area. CEs would also have to disclose how much of their 340B revenues go toward uncompensated charity care.
While the three proposals differ in patient definitions, discount models, contract pharmacy rules, and transparency measures, they all seek to address weaknesses in the 340B program and rein in the abuse of the program. CCAGW will continue to promote its recommendations as Congress hopefully moves forward to fix 340B.
— Ritish Kodali and Alec Mena
