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How 340B fared in the 2022 midterm elections and what’s to come in 2023

The biggest surprise from the Nov. 8 midterm election was undoubtedly the lack of the so-called “red wave” that many expected. Instead of enjoying commanding majorities in both chambers of Congress, Republicans will have, for the moment, a 222-212 majority in the House starting in January, while the Democrats will keep their narrow control of the Senate, giving us divided government. What does that mean for the 340B program?

It’s a decidedly mixed bag, but here’s the bottom line: Under divided government, and with narrow majorities in both chambers, it will be tough for either party to push through expansive or divisive policies.

However, under a Republican-controlled House, don’t be surprised to see some 340B oversight hearings and bills that would require greater transparency and reporting, like what we saw when the GOP last controlled the House from 2016 to 2018.

Let’s zoom in for a closer look at what’s in store for 340B in the 118th Congress.

New faces in key committees

In the House, the Energy and Commerce Committee has primary jurisdiction over the 340B program. There, Rep. Cathy McMorris Rodgers (R-Wash.) will serve as chair and Rep. Frank Pallone (D-N.J.) will be the ranking member. About a decade ago, McMorris Rodgers was a 340B supporter; however, she has mostly been silent in recent years. Notably, she was one of two Republicans who asked the Government Accountability Office earlier this year to scrutinize a law granting hospitals more flexibility in 340B eligibility because of COVID-19-related changes to patient mix. Meanwhile, former committee member and 340B champion David McKinley (R-W.Va.) lost in the primary and will not return, and Republicans have appointed Rep. Brett Guthrie (R-Ky.) to chair the Health subcommittee.

Kentucky, the home to longtime Senate Republican leader Mitch McConnell, attracts an outsize share of attention from the pharmaceutical industry. And Guthrie himself tipped his hand at a recent media event in Washington D.C., when asked about the possibility of legislation requiring greater transparency from covered entities. “We need to have hearings to see exactly what it is going to be, so we can see what we can do in a bipartisan way,” he said, according to 340 Report. “I think that’s a bipartisan issue.”

Over in the House Ways and Means Committee, which also touches 340B, the retirement of top Republican Rep. Kevin Brady opens the door to the possible chairmanship of Rep. Vern Buchanan (R-Fla.), who has limited record of support for 340B legislation. However, he has worked closely with Rep. Guthrie on the Healthy Futures Task Force with a commitment to lower drug costs, so we expect to see some collaboration between both of their committees.  Buchanan is being challenged by two other Ways and Means members for the chairmanship amid a larger battle over who will be House speaker, so the final makeup of the committee is not decided.

Turning to the Senate, the Health, Education, Labor and Pensions (HELP) Committee will have a new chair in Sen. Bernie Sanders (I-Vt.), an outspoken critic of the pharmaceutical industry. Sen. Bill Cassidy (R-La.),  who is expected to serve the ranking Republican, is a physician with prior experience practicing in a 340B hospital, but he’s considered an ally of the drug makers. He has previously introduced legislation to limit the growth of 340B site registrations and impose onerous reporting requirements on covered entities.

Waiting for the courts

If there’s one thing lawmakers might agree on in a divided government, it’s the need to resolve the impasse over drug manufacturers’ contract pharmacy restrictions.

As I often note, 340B is one of the few issues in Washington that enjoys a degree of bipartisan support. About a third of the co-sponsors of the Protect 340B Act are Republicans, and a bipartisan group of 181 House lawmakers in July signed a letter urging HHS to slap fines on the manufacturers that restrict 340B pricing at contract pharmacies. With hospitals from their home districts bending their ears, many lawmakers are frustrated that HHS Secretary Xavier Becerra hasn’t moved more aggressively to curb the drug makers whose policies are causing financial pain.

Will lawmakers take up the issue and work on a 340B contract pharmacy solution? Many lawmakers and administration officials want to see the rulings from the various appellate courts before doing anything. But if those courts deliver another round of mixed and inconclusive decisions, the odds that Congress will act increase.

Either way, it seems likely that 340B is due for increased attention from Congress in 2023. With some 76 incoming freshmen joining the 118th Congress, it’s imperative that stakeholders rise to the occasion to help educate, inform, and share the value 340B provides. What will you do by next Tuesday? Or better yet, what will your new year’s resolution be? Hopefully, it’s to create your impact report and share it with your incoming congressional members, both new and old, and identify which committees they may be responsible for that impact health care.

If you’d like to continue the conversation with me, schedule a time that works for you and I’ll be in touch!

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