SUSTAIN 340B Act
- Sponsor
- Sen. Moran, Jerry [R-KS]
- Committees
- Health, Education, Labor, and Pensions Committee (primary)
- Last action
- Aug 5, 2026
Bottom line
This bill aims to enhance the integrity, transparency, and accountability of the 340B drug discount program while ensuring equitable treatment for participating entities and preventing duplicate discounts.
What it actually does
The bill, titled the "Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now and for the Future of 340B Act" or "SUSTAIN 340B Act," significantly reforms the 340B drug discount program. It introduces new regulations for contract pharmacies, clarifies the definition of a "patient" for 340B eligibility, establishes a data clearinghouse to prevent duplicate discounts, sets new requirements for child sites of covered entities, and mandates increased transparency and program integrity measures. It also introduces a user fee program for covered entities and authorizes additional appropriations for oversight.
Proponents argue
Supporters argue the bill is crucial for ensuring the 340B program returns to its original intent of helping safety net providers stretch scarce federal resources to serve low-income and underserved patients. They contend that current program ambiguities and lack of oversight have led to abuses, such as drug diversion, duplicate discounts, and the proliferation of contract pharmacies without clear patient benefit. The reforms will ensure savings are directly used to expand patient access and services, improve program integrity, and create a fairer playing field for all participants.
Opponents contend
Critics might argue that the bill imposes overly burdensome administrative requirements on covered entities, particularly smaller ones, potentially hindering their ability to participate in the 340B program and thus reducing access to discounted drugs for vulnerable populations. They may contend that strict new patient definitions and contract pharmacy limits could restrict flexibility and innovation in patient care delivery, and that the user fee program adds an unnecessary financial strain on safety net providers.
The bill is moderately complex due to its detailed amendments and new program structures, requiring a dedicated reading time to fully grasp its implications.
Sec. 3
Contract Pharmacy Reforms
This section introduces new rules for how covered entities can use contract pharmacies. It requires covered entities to cancel contracts with pharmacies that haven't dispensed 340B drugs in the last 12 months (with exceptions) and mandates registration and annual recertification of all contract pharmacy arrangements. It also directs the Secretary to establish a review process for these contracts and develop standard provisions to prevent diversion and duplicate discounts. Drug manufacturers are explicitly required to offer 340B discounted drugs regardless of whether they are dispensed directly by the covered entity or through a contract pharmacy.
Supporters argue
Supporters argue these reforms are essential to curb abuses, prevent diversion, and ensure that contract pharmacy arrangements genuinely serve the patients of covered entities, rather than operating as profit centers. Standardized contracts and increased transparency will enhance program integrity.
Critics contend
Critics may contend that these new regulations impose excessive administrative burdens on covered entities, particularly those in rural or underserved areas that rely heavily on contract pharmacies to reach patients. They might argue that the 'inactive pharmacy' rule could disrupt established patient access points.
Tradeoffs
The provision balances the need for program integrity and preventing abuse with the flexibility required by covered entities to serve their patient populations through various dispensing models.
Sec. 4
Patient Definition and Referral Prescriptions
This section establishes a new, more stringent definition of a "patient" for 340B eligibility, requiring an outpatient health care service from the covered entity within the preceding two years and an auditable medical record. It excludes individuals whose only service is drug administration or infusion, with some exceptions. It also creates a framework for "referral prescriptions," allowing 340B pricing for drugs prescribed by non-340B providers to referred patients under strict conditions, including documentation, no sharing of savings, and specific drug exclusions. Non-compliance can lead to sanctions, including civil monetary penalties.
Sec. 6
Child Site Eligibility and Oversight
This section establishes rigorous new criteria for child sites (off-campus outpatient departments) of covered entities to qualify for 340B participation. Child sites must be wholly-owned, clinically and financially integrated with the parent entity, and meet specific requirements similar to Medicare provider-based rules. There are eligibility delays for newly acquired (3 years, with hardship exemptions) and newly constructed sites. The Secretary is directed to establish a process for determining the status of previously qualified child sites that do not meet the new criteria and to conduct reports on child site use and program integrity.
Sec. 9
340B Drug Discount Program Data Clearinghouse
This section mandates the Secretary to contract with an independent third-party entity to establish a 340B Drug Discount Program Data Clearinghouse within one year. The clearinghouse will collect claims-level data from State Medicaid agencies and covered entities to prevent duplicate discounts and ensure proper accounting. It will share data with manufacturers to identify potential rebates and notify relevant parties of violations. The contracting entity must be free of conflicts of interest and cannot sell or license the collected data. Manufacturers and PBMs are restricted in their use of this data, with penalties for misuse.
Sec. 10
Patient Financial Assistance Requirements
This section requires covered entities to ensure their financial assistance policies are transparent, publicly reported, and applied consistently across child sites and contract pharmacies. They must submit these policies to the Secretary upon request and maintain auditable records for at least three years. A 'financial assistance policy' is defined as a written policy (like those under IRS 501(r)(4)(A)) providing assistance to patients at 200% of the Federal poverty level or less, including a sliding fee scale for 340B drugs, or an alternative approved by the Secretary. Compliance with these policies is explicitly protected from certain anti-kickback statutes. The requirements for child sites and contract pharmacies have a delayed effective date of three years.
Sec. 11
Nondiscrimination by Health Plans and PBMs
This section prohibits group health plans, health insurance issuers, and Pharmacy Benefit Managers (PBMs) from discriminating against covered entities or 340B pharmacies. Prohibited actions include reimbursing 340B drugs at lower rates, imposing different terms or conditions (e.g., fees, network restrictions, audit requirements), interfering with patient choice, requiring identification of 340B drugs, or refusing to contract without equal justification. It also prohibits denying coverage of a drug solely because it is a 340B drug. Violations are subject to civil monetary penalties.
Sec. 12
340B User Fee Program
This section establishes a new user fee program for covered entities participating in the 340B program, beginning in fiscal year 2031. The total annual assessment starts at $50 million for FY 2031, adjusted annually by inflation. Each covered entity's fee will be proportional to its share of total 340B prescriptions dispensed in the previous year. These fees are dedicated to administering the 340B program, enhancing program integrity, and funding oversight activities, including the new data clearinghouse and audits. The Inspector General of HHS will conduct annual reviews of the program for its first five years.
Excludes individuals from being considered a patient of a covered entity if the outpatient health care services received consist only of drug administration, dispensing for self-administration, or infusion of a drug.
Sec. 4(a)(1)(D)
Why it matters:This is a technical clarification intended to prevent certain types of drug-only encounters from qualifying for 340B pricing, which might be seen as standard legislative practice to refine definitions.
Case for: Supporters argue this clarifies the intent of the program, ensuring that 340B discounts are tied to comprehensive outpatient health care services and not merely drug dispensing or administration, which could be prone to abuse.
Case against: Critics might argue that this exclusion could inadvertently limit access for patients who legitimately receive drug administration or infusion services as part of their ongoing care from a covered entity, even if those are their only direct services at that specific site.
Estimated impact: Potentially significant impact on covered entities that primarily provide infusion or drug administration services, or on patients whose care models fall under these exclusions.
Allows manufacturers to initiate an audit of a covered entity's contract pharmacy compliance only if they 'demonstrate credible allegations' and 'evidence of good faith outreach' to resolve the matter first.
Sec. 3(e)(2)(II)
Why it matters:This is a standard legislative practice to include procedural details within enforcement mechanisms, but its placement might obscure its significance for covered entities.
Case for: Supporters argue this protects covered entities from frivolous or harassing audits by manufacturers, requiring a legitimate basis and an attempt at resolution before formal audit proceedings begin.
Case against: Manufacturers might argue that the 'credible allegations' and 'good faith outreach' requirements could create unnecessary hurdles, delaying or complicating their ability to identify and address non-compliance effectively.
Estimated impact: Significant impact on the dynamics of manufacturer-initiated audits, potentially reducing their frequency and ensuring they are based on substantive concerns.
Establishes a 3-year eligibility delay for newly acquired child sites (after enactment date) that were not previously 340B eligible, with a limited hardship exemption allowing eligibility within 180 days.
Sec. 6(B)(iv)(I)
Why it matters:This is a specific policy choice to slow the expansion of 340B eligibility through acquisitions, placed within the technical rules for child sites. It's a substantive policy decision embedded in a technical section.
Case for: Proponents argue this prevents rapid expansion of 340B eligibility through hospital acquisitions, ensuring that new sites have time to integrate and demonstrate their commitment to serving vulnerable populations before accessing discounts.
Case against: Critics argue this could hinder access to care in underserved areas by disincentivizing hospitals from acquiring struggling practices or clinics, as the financial benefits of 340B would be delayed for three years.
Estimated impact: Significant impact on hospital acquisition strategies and the financial viability of newly acquired sites, potentially slowing consolidation in some areas.