WASHINGTON - U.S. Senator Bill Cassidy, M.D. (R-LA), chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, delivered remarks during today's hearing on the growth of the 340B Drug Pricing Program and its impact on patients. Since 2023, Cassidy has been investigating how covered entities use and generate 340B revenue to benefit low-income patients.
Click here to watch the full hearing.
Cassidy’s speech as prepared for delivery can be found below:
The Senate Committee on Health, Education, Labor, and Pensions will please come to order.
Congress created the 340B Program to make health care more affordable for low-income and uninsured patients. Hospitals and community health centers that qualify are able to purchase prescription drugs at a discounted rate.
It’s a well-intentioned program, but people judge you by your actions, not your intentions
Today, we will hear testimony about how the program’s participation ballooned with limited oversight, raising questions about how the revenue is used and whether it is actually directly benefiting low-income patients.
Anyone who says 340B is cost-neutral to the taxpayer, isn’t paying attention. As the 340B program grows, so do health care costs.
In fact, this year, CBO reported the program's dramatic growth led to higher costs for patients and taxpayers.
And I will also note, a recent study by the National Pharmaceutical Council found that 340B’s growth caused premiums for employer-sponsored insurance to increase an estimated $4.5 billion from 2017-2023.
Let’s not lose sight of the goal here - we're trying to make health care more affordable. But 340B is making employer-sponsored insurance, which pays for the health care for 150 million people, less affordable.
Looking at the program, the problems are clear. The 340B program incentivizes doctors to prescribe more expensive drugs and health care systems to consolidate and acquire other health care systems. Its financial incentives demonstrably drive up costs within Medicare, Medicaid, and the commercial insurance market.
It is clear the participating providers are benefiting from 340B. The question is, are their patients?
Beginning last year, I conducted an investigation into how 340B revenue is generated and used – following the money.
The investigation revealed that a significant share of 340B revenue goes to for-profit middlemen and that patients do not always realize direct benefits from the program. And let's point out, the growth of the 340B program is causing patients to pay more now for prescription drugs than ever before.
It appears the significant growth of the 340B program has become a means for some to pad bottom lines, but with little focus on affordability for the family, or for the employer who is helping to pay for their insurance.
Angus King once said there is no silver bullet for reducing drug cost but there is a silver buckshot. Maybe reforming 340B is part of our silver buckshot.
If this Committee is serious about making health care more affordable, about making drugs more affordable, about improving commercial insurance and helping the patient, we need to reform 340B and put patients first.
Since 2011, the GAO has made 20 recommendations to improve the integrity of the 340B program. To date, only 5 of those have been implemented. I appreciate GAO being here today to discuss these recommendations and inform future efforts.
Recently, I released recommendations to increase 340B program transparency. These reforms include establishing clear guidelines to ensure patients benefit directly and requiring entities to report how 340B revenue is used. We also need to examine the role of for-profit middlemen, to make sure their fees are not disadvantaging patients.
340B should be about making drugs more affordable, not a line item on an investor call.
By the way, there are many special interests who don’t want 340B reform. They profit off the status quo. They fearmonger that if we touch 340B, we hurt providers to help manufacturers. This is a false choice.
We can support providers in underserved communities AND reform misaligned incentives in the system that manufacturers, middlemen, and providers have used to raise costs and hurt patients.
I want to share one anecdote. There is a small community health center that reported the cost of compliance and fees forced upon them by these middlemen make it almost unprofitable for them to participate in 340B. Middlemen are making so much profit that the community health center that this was designed to benefit--so it could then benefit their patients--can no longer afford to participate. This system is out of control.
We have a responsibility to fix the broken status quo. 340B reforms are crucial to implementing a pro-patient, pro-family agenda that lowers the cost of health insurance and drugs for all Americans and American businesses.
I look forward to discussing these and more ideas to reform the program today.
With that, I recognize Senator Sanders.
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