AHA Responds to Senate RFI on the SUSTAIN 340B Act Draft

March 26, 2024

Dear Senators Thune, Stabenow, Moore Capito, Baldwin, Moran and Cardin:

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, including our nearly 2,000 member hospitals that participate in the 340B Drug Pricing Program (340B program), the American Hospital Association (AHA) welcomes the opportunity to provide feedback on the Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now and for the Future of (SUSTAIN) 340B Act bipartisan discussion draft and accompanying request for information on the critically important 340B Drug Pricing Program.

For over 30 years, the 340B program has successfully allowed health care providers to stretch scarce federal resources to better serve the needs of their patients and communities, consistent with Congress’ objectives. The savings 340B hospitals achieve through purchasing certain outpatient drugs at a discount enable them to provide a range of programs and services that directly benefit their patients. The 2022 Supreme Court decision regarding the 340B program underscored this key tenet of the program, noting that the program enables hospitals and health care systems to “perform valuable services for low-income and rural communities.” Am. Hosp. Ass’n v. Becerra, 596 U.S. (2022) (slip op., at 13).¹ These savings are used to fund services like medication therapy management, diabetes education and counseling, behavioral health services, opioid treatment services, and the provision of free or discounted drugs; each 340B hospital tailors its offerings to the unique needs of its patients. Notably, the spending on these programs often exceeds 340B savings, demonstrating the outsized commitment 340B hospitals have to the communities they serve. A recent study found that between 2017 and 2020, the growth in community benefits provided by 340B hospitals far outweighed the growth in their program savings.²

The 340B program is especially important in the face of rising drug prices and persistent financial challenges for hospitals and health systems. A recent report by the Department of Health and Human Services (HHS) found that between January 2022 and January 2023 prices increased an average of 15.2% for over 4,200 drugs, many of which are used to treat cancer and other chronic conditions.³ Compounding this problem is the fact that drug companies are introducing unusually expensive drugs onto the market at record high prices, crossing a median price of $300,000 in 2023. These high drug prices are increasing at an alarming rate: This extraordinary median drug price represents an increase of 35% from the prior year.⁴ These drug prices and subsequent price increases — which are at the sole discretion of drug companies — crowd out the resources hospitals have available to care for their patients and communities. This only underscores why the 340B program is so vital for patients and providers.

Given these realities, the AHA appreciates your continued interest in protecting the 340B program and welcomes opportunity to provide feedback on the SUSTAIN 340B Act discussion draft. We commend your efforts to clarify Congress’ intent in creating the 340B program and to deliver 340B providers much needed relief from the egregious behavior of drug companies, insurers and pharmacy benefit managers. Their unlawful and pernicious practices have collectively undermined the 340B program and harmed patient care. At the same time, we have concerns regarding other aspects of this discussion draft that should be better aligned to reflect the operational realities that 340B hospitals face every day. Therefore, our comments primarily focus on how Congress can ensure that the 340B program continues to benefit patients and communities, while protecting against any unnecessary harm or burden that would jeopardize patient care.

Our detailed feedback on the discussion draft provisions and responses to the request for information (RFI) questions follow. Please contact me if you have questions or feel free to have a member of your team contact, Aimee Kuhlman, AHA’s vice president for advocacy and grassroots, at akuhlman@aha.org.

Sincerely,

/s/

Stacey Hughes
Executive Vice President

Contents

1. Contract Pharmacies
2. Patient Definition
3. Child Sites
4. Transparency
5. Enhancing Program Integrity
6. Preventing Duplicate Discounts
7. Ensuring Equitable Treatment of Covered Entities and Participating Pharmacies
8. User Fee Program

Download the full letter PDF.

1. https://www.supremecourt.gov/opinions/21pdf/20-1114_09m1.pdf
2. https://www.aha.org/guidesreports/2024-03-12-340b-drug-pricing-program
3. https://aspe.hhs.gov/reports/changes-list-prices-prescription-drugs
4. https://www.reuters.com/business/healthcare-pharmaceuticals/prices-new-us-drugs-rose-35-2023-more-than-previous-year-2024-02-23/