(Aug. 5, 2026) - Earlier today, the Senate’s bipartisan 340B Working Group, a group of three Republicans and three Democrats that formed over two years ago, introduced the SUSTAIN 340B Act, the product of extensive stakeholder outreach on fixing problems facing the 340B Drug Pricing Program. We want to extend special thanks to Senator Jerry Moran (R-KS) for his tireless effort to keep this important program available to Kansas’ hospitals. This bill represents a huge step in that direction. He was joined in its introduction by Senators Tammy Baldwin (D-WI), Shelley Moore Capito (R-WV), Tim Kaine (D-VA), John Boozman (R-AR) and John Hickenlooper (D-CO).
According to the Bipartisan 340B Working Group’s bill explainer, the SUSTAIN 340B Act would:
- Reiterate the original intent of the 340B program and clarify the program provides point-of-purchase discounts, as opposed to rebates.
- Codify covered entities’ use of contract pharmacies while placing reasonable limitations, including registration, audits of covered entities with a large number of contract pharmacies and standardization of contractual requirements between covered entities and contract pharmacies. The bill does not place numeric or geographic limitations on the use of contract pharmacies.
- Establish the definition of an eligible patient under the 340B program and covered services for these patients. It also adds requirements and oversight for 340B patients being dispensed 340B drugs through referrals to non-covered entities.
- End any 340B Rebate Model program within one year and require the U.S. Department of Health and Human Services to transition to the clearinghouse established in the legislation.
Establish child sites must be wholly owned and integrated with the parent covered entity, disincentivizes child site acquisitions with the sole purpose of expanding 340B footprints and directs HHS to establish registration and oversight procedures.
- Place new annual reporting requirements on covered entities relating to their utilization of the 340B program.
- Give HHS authority to establish auditing and reporting procedures for compliance under the 340B program and authorize removal of covered entities who are found in noncompliance and do not implement corrective action plans.
- Establish a 340B data clearinghouse operated by an independent, third-party entity to prevent diversion and duplicate discounts in the 340B program.
- Require covered entities to establish a standard, transparent patient financial assistance policy for patients at or below 200 percent of the federal poverty level.
- Prevent insurers from discriminating against 340B covered entities and their contract pharmacies.
- Establish a user fee program for participation in the 340B program to pay for program administration, including the clearinghouse.
- Require reports to Congress on hospital debt collection practices, dispensing fees and data collection system integration.
- Authorize $3M dollars annually for five years for conducting oversight and enforcement and $9M dollars annually for four years for bill implementation.
- Establish definitions for “child site” and “contract pharmacy.”
If passed, the SUSTAIN 340B Act would solve many of the legal questions currently being litigated in federal courts related to manufacturer restrictions on contract pharmacy use, the Health Resources and Services Administration’s proposed 340B rebate model and administrative policies regarding drug purchasing. It would also give hospitals and manufacturers a common set of policies on the applicability and size of discounts, as well as a regulatory home for the program within HRSA.
There are competing 340B bills currently being considered in the Senate. In late June, Senate Health, Education, Labor, and Pensions Chairman Bill Cassidy (R-LA) released a discussion draft of his bill, the 340B Drug Pricing Integrity and Affordability for Patients Act. Providers generally prefer the bipartisan 340B Working Group's approach, as Chairman Cassidy’s bill would shift the program more toward a rebate model and place administrative burdens on hospitals struggling to keep their doors open.
KHA will continue to review the bill and encourage members to share feedback with the KHA team during the coming weeks.