Spanberger Introduces Bipartisan Bill to Hold PBMs Accountable, Protect Affordable Medicine for Central Virginia Patients

HENRICO, V.A. — U.S. Representative Abigail Spanberger led the introduction of a bipartisan bill that would prohibit insurers and pharmacy benefit managers (PBMs) from hurting hospitals and clinics that participate in the federal 340B Drug Pricing Program. Spanberger introduced the legislation alongside U.S. Representative David B. McKinley (R-WV-01).

The bipartisan Preserving Rules Ordered for the Entities Covered Through (PROTECT) 340B Act is in response to concerns from Central Virginia healthcare providers — particularly those in rural areas — who have seen their access to the program threatened by PBMs, insurers, and pharmaceutical manufacturers.

The PROTECT 340B Act would prohibit health insurers and PBMs from discriminating against 340B providers or their contract pharmacies on the basis of their status as providers or pharmacies that dispense 340B drugs. Specifically, Spanberger’s legislation would prevent companies from treating 340B providers differently with regards to reimbursement of fees, participation in standard or preferred networks, inventory management systems — and it would block them from interfering in a patients’ choice to receive drugs from a 340B pharmacy.

“The 340B program allows Central Virginia clinics and hospital systems to provide lower-cost prescription drugs for our region’s patients — especially those in rural communities. However, the rising trend of 340B ‘pick-pocketing’ by third parties threatens to undermine these savings and put the financial security of patients and providers at risk. Congress did not intend for 340B savings to subsidize for-profit insurance companies and pharmacy benefit managers,” said Spanberger. “Our bipartisan bill would hold health insurance companies and PBMs accountable for trying to unfairly target and raid these savings. By leveling the playing field for 340B pharmacies and providers, our bipartisan bill would help protect the availability of discounted prescription drugs at Virginia hospitals, HIV/AIDS clinics, and rural healthcare providers. I would like to thank Congressman McKinley for his partnership in introducing this bipartisan bill.”

“The 340B drug pricing program is a vital part of many rural and underserved areas. Without it, many providers would not be able to provide critical services and low-cost medicine to the communities they serve,” said McKinley. “Yet, actions taken by big pharmaceutical companies and middlemen have jeopardized the ability of clinics and hospitals to provide vital services. Our bipartisan bill will hold pharmaceutical companies accountable and ensure access to affordable medicine.”

“Virginia Commonwealth University (VCU) Health System commends Rep. Spanberger for her recent introduction of the PROTECT 340B Act,” said Dr. Arthur Kellermann, Senior Vice President, VCU Health Sciences; CEO, VCU Health. “The 340B drug pricing program enables VCU Health System, the Commonwealth’s largest safety net provider, to provide free or deeply discounted prescriptions to our patients with the greatest financial need. It also allows us to engage in vital community outreach with our most underserved patients as we attempt to alleviate social stressors that may negatively impact their overall health. We are grateful to Rep. Spanberger for her continued, unwavering support of this critically important safety net program.”

“The 340B program has been a lifeline for federally qualified community health centers like Central Virginia Health Services,” said Paula Tomko, CEO, Central Virginia Health Services. “Over the past several years, changes to the program have had a significant impact on health centers, which have trickled down to our patients. CVHS appreciates the work that Congresswoman Spanberger and her bipartisan team of legislators are doing through the PROTECT 340B Act to help hold the 340B program to its original intent – helping safety net providers provide health care services to the various vulnerable populations they serve. The safety net providers utilize these savings to help vulnerable patient populations stay compliant with medications and assist with management of chronic diseases. The work the safety net providers do with these savings helps to reduce cost to the whole health care system, not increase shareholder profits.”

“The AHA thanks Representatives Spanberger and McKinley for leading this important bipartisan effort to prohibit discriminatory actions, including by insurers, against 340B hospitals,” said Stacey Hughes, Vice President, American Hospital Association. “Importantly, this bill also provides for the imposition of civil monetary penalties against those that violate these new protections.”

“America’s Essential Hospitals thanks Reps. McKinley and Spanberger for introducing the PROTECT 340B Act. We are pleased to support this important legislation, which will help protect the 340B benefit for essential hospitals and the low-income patients they serve,” said Dr. Bruce Siegel, President & CEO, America’s Essential Hospitals.

“NACHC applauds Representatives McKinley and Spanberger for their leadership on introducing the PROTECT 340B Act which prohibits discriminatory 340B reimbursement policies against Community Health Centers. The introduction of this legislation is monumental and ensures Health Centers’ 340B savings are protected and can be reinvested to expand much-needed patient care services in medically underserved communities,” said Tom Van Coverden, President & CEO, National Association of Community Health Centers. “Pharmacy services is a key component of the Community Health Center model. Because of this legislation millions of patients, who otherwise would not be able to afford their prescription drug medication, now have access to the same affordable drugs as non-340B providers – resulting in better health outcomes, affordability and equity.”

“On behalf of our nation’s 1,400 Community Health Centers and their 30 million medically-underserved patients, I enthusiastically support the PROTECT 340B Act of 2021,” said Colleen Meiman, National Policy Advisor, State Associations of Community Health Centers (CHCs). “This bill will ensure that 340B savings remain where Congress intended – with CHCs and other safety net providers, who use them to expand access to care for low-income and underserved patients. For too long, PBMs and private insurers have been able to ‘pick-pocket’ these savings away from CHCs, using them to line their own pockets. We are enormously grateful to Reps. Spanberger and McKinley for their continued leadership to ensure that 340B benefits underserved patients, rather than boosting the profits of middlemen.” 

“NRHA applauds Representatives Spanberger and McKinley for their continued leadership to uphold the integrity of the 340B Drug Pricing Program. Unfortunately, the 340B Drug Pricing Program, a critical lifeline for rural providers, has been under attack from pharmacy benefit managers (PBM) and large pharmaceutical manufacturers in recent months. PROTECT 340B Act will protect covered entities, especially those in rural areas, from the litany of attacks aimed at undermining the integrity of this lifeline program,” said Alan Morgan, CEO, National Rural Health Association.

“RWC-340B enthusiastically supports the legislation because it prevents for-profit PBMs and insurers from diverting the 340B benefit away from safety net clinics,” said Shannon Stephenson, CPA, MBA, CEO, Cempa; President, Ryan White Clinics for 340B Access (RWC-340B). “Representatives McKinley and Spanberger are again showing their unfailing leadership to support 340B safety net providers so we can continue to improve health care for our communities. States are leading the charge. West Virginia, my home state of Tennessee, and more than a dozen other states recently passed similar laws; this federal legislation is the next logical step to protect 340B nationwide.”

“We appreciate Representatives Spanberger and McKinley’s continued leadership on protecting safety-net hospitals, health centers, and clinics from the damaging actions of pharmacy benefit managers and other third-party payers. By ensuring a level playing field, this legislation will support the critical mission of 340B hospitals to serve patients living with low income and those in rural communities. We are pleased by this bipartisan show of support for 340B providers and the patients we serve,” said Maureen Testoni, President & CEO, 340B Health.

BACKGROUND

The 340B Drug Pricing Program was enacted by Congress in 1992 with bipartisan support and is overseen by the U.S. Department of Health and Human Services (HHS). The program requires that pharmaceutical companies give safety-net and rural healthcare providers discounts on their drugs, in exchange for having their drugs covered by Medicaid. The program has a demonstrated record of protecting patients who are low-income, live in underserved communities, or suffer from serious chronic illnesses from the threat of skyrocketing prices for the drugs they depend on the most.

Following a major, bipartisan push led by Spanberger earlier this year, the Health Resources and Services Administration (HRSA) took action in May 2021 against pharmaceutical manufacturers that refuse to provide Central Virginia safety net and rural healthcare providers with discounted prescription drugs. This bipartisan legislation would build on these efforts.

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