A new bipartisan bill in the U.S. House of Representatives was introduced recently to delay the U.S. Health Resources and Services Administration’s 340B rebate model pilot, which provider groups claim would create serious cashflow and administrative burdens for safety-net providers. The drug industry strongly supports the proposed rebate rule.
U.S. Reps. Rob Bresnahan (R-PA), Debbie Dingell (D-MI), Tracey Mann (R-KS), and Lois Frankel (D-FL) introduced the 340B Rebate Model Delay Act (H.R. 10770). It would block HRSA’s rebate pilot, or a substantially similar program, through December 31, 2028, with an exception for AIDS Drug Assistance Programs.
The federal 340B Drug Pricing Program costs taxpayers nothing. Under it, drug manufacturers sell outpatient drugs at a discount to safety-net providers serving high numbers of low-income Medicare, Medicaid, and Supplemental Security Insurance patients. Congress created the program to allow these safety-net providers, like AIDS Healthcare Foundation, to “stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” Savings from the program help fund free and low-cost medications and medical care at rural hospitals and HIV/AIDS, diabetes, cancer, dental, and primary care clinics that serve our most vulnerable citizens.
Groups including 340B Health, America’s Essential Hospitals, Ryan White Clinics for 340B Access, American Hospital Association, National Association of Community Health Centers, and others say replacing upfront discounts with rebates would force covered entities to pay full drug costs first and wait to recover their 340B discounts.
Ryan White Clinics for 340B Access warned that mandating cash-strapped clinics to finance manufacturers while awaiting rebates would destabilize the HIV safety net, threaten viral-suppression gains, widen disparities, and harm patients. The new bill follows HRSA’s publication of ten approved manufacturer plans for its revised rebate pilot.
Hospital groups have sued HRSA in Maine to stop the pilot. Drug companies want to ditch the discounts and substitute them with rebates to make it more difficult for prescriptions to qualify for the discounted 340B price. H.R. 10770’s sponsors want to protect safety-net and rural providers from a cash-flow crunch and costly regulatory red tape.
John Hassell is the National Director of Advocacy for AIDS Healthcare Foundation.
