Healthcare policy group submits recommendations to Senate HELP Committee to strengthen 340B reforms and address government policies driving healthcare costs
WASHINGTON, D.C. — The Center for Healthcare Affordability (CHA), a project of the Institute for Legislative Analysis, submitted formal comments to Senate HELP Committee Chairman Bill Cassidy, M.D., supporting his 340B Drug Pricing Integrity and Affordability for Patients Act while recommending additional safeguards to prevent continued abuse of the federal drug discount program.
The recommendations build on CHA’s Healthcare Reform Prescriptions, a comprehensive policy framework addressing five of the most significant drivers of healthcare unaffordability. CHA’s policy team has been actively examining both the rapid growth of the 340B program and the broader government policies placing increasing financial pressure on hospitals and patients.
CHA argues that hospitals are facing a legitimate affordability crisis of their own. Government policies, particularly at the state level, have imposed rising labor and operating costs while increasingly limiting hospitals’ ability to collect medical debt and recover the cost of care. Rather than addressing those underlying problems, however, the 340B program has created an alternative revenue stream that allows qualifying hospitals to purchase medicines at steep mandatory discounts and generate margins from the spread.
According to CHA, that distorted incentive structure has contributed to consolidation, encouraged the expansion of hospital-owned facilities, and shifted costs throughout the healthcare system.
“Hospitals have been getting completely screwed over by government policies that drive up their costs while making it harder to recover the cost of providing care. But the answer cannot be for hospitals to turn around and screw over drug manufacturers to make up the difference,” said Fred McGrath, Executive Director of the Center for Healthcare Affordability. “That creates a domino effect that ultimately lands on patients through higher costs, reduced access, and less investment in the next generation of lifesaving treatments.”
CHA’s preferred long-term solution is to repeal the 340B program while simultaneously providing significant regulatory relief and market-oriented reforms that improve hospital financial stability without forcing manufacturers to subsidize the system.
Recognizing that full repeal is unlikely in the immediate term, CHA supports Chairman Cassidy’s effort as a substantial step toward limiting abuse. Among other provisions, CHA backs stronger transparency requirements, restrictions on contract pharmacies and off-site hospital facilities, and the creation of a statutory definition of a 340B patient.
CHA’s policy team also identified areas where the discussion draft should be strengthened, including clearer limits on when patient referrals can qualify for 340B discounts and changes to Section 2 to ensure covered entities cannot circumvent claims verification, duplicate-discount protections, or other program-integrity safeguards.
“Chairman Cassidy is taking on a program that has grown far beyond what Congress originally envisioned, and there is a great deal in this proposal that moves policy in the right direction,” McGrath added. “We look forward to working with lawmakers at both the federal and state levels not only to reform 340B, but to advance the broader components of CHA’s policy framework that can reduce costs for hospitals, manufacturers, and most importantly patients.”
CHA’s full Healthcare Reform Prescriptions framework is available at ReformHealthcare.org/Reforms.
For media inquiries contact: press@limitedgov.org
###
