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Honorable John Thune
Honorable Debbie Stabenow
Honorable Shelly Moore Capito
Honorable Tammy Baldwin
Honorable Jerry Moran
Honorable Ben Cardin

United States Senate
Washington, DC 20510

Submitted electronically to Bipartisan340BRFI@mail.senate.gov

Dear Senators Thune, Stabenow, Moore Capito, Baldwin, Moran, and Cardin:

The undersigned organizations, representing health care consumers, patients, and community
organizers, are pleased to respond to your request for information (RFI) dated June 16, 2023.
While some of our organizations have publicly spoken out on the 340B program in the past, for
many of us, this is the first time wading into this nuanced issue.

We wanted to take this opportunity to echo the concerns you have heard from other
stakeholders about ambiguity in the program, lack of oversight and accountability, and the
degree to which 340B is currently fulfilling its intended purpose of serving vulnerable patients
and communities. Many of our organizations have further consideration to do before we can
endorse specific proposals, and we plan to share input to that end in the coming months as the
legislative conversation continues.

Of immediate concern is the glaring lack of data and transparency in program. Despite the
program being more than 30 years old, 340B entities are still not required to calculate and report
the amount of 340B revenue they receive, nor how they reinvest those revenues in their
communities – an astounding fact, considering the program now accounts for more than $40
billion in sales each year.1 We are concerned that the program’s opaque nature, combined with
a lack of requirement that discounts be shared with patients or used for charity care, means that
340B is not fulfilling its mission or meaningfully improving patients’ lives. This is particularly
troubling at a time when health care costs are rising and medical debt is widespread and
growing.

Among our chief concerns with the 340B program are:

340B hospitals are free to engage in predatory practices like balance billing and
aggressive medical debt collection – even for uninsured patients and those with limited
incomes.

Hospital eligibility criteria for 340B do not align with what makes a true safety-net
provider; the program and the health system as a whole have changed since 340B’s
creation in 1992 in a way that has fundamentally altered hospital economics and patient
mix. Today, the 340B program includes hospitals like Mass General, the Cleveland
Clinic, Duke Hospital, Cedars Sinai, and Johns Hopkins, some of the largest and
wealthiest systems in the country.

Growing evidence suggests that 340B creates a significant incentive for health
system consolidation,with hospitals able to purchase drugs at a steep discount on a
given prescription compared to independent physician offices.4 This provides an
incentive for hospitals to purchase these facilities, especially those in high-income areas
where most patients are commercially insured, so the hospital system can increase the
office’s profitability.

There are no requirements that hospitals profiting from the program expand
access to care in vulnerable neighborhoods – as recent reporting in the New York
Times has shown5 – or report how they use 340B funds.

The Government Accountability Office (GAO) has called numerous times over the
past decade-plus for greater oversight of the program by its governing body, the
Health Resources and Services Administration (HRSA), with little progress made to
improve program integrity.

All in all, 340B has expanded seven-fold in the last 15 years. Big hospital systems account for most of that growth and three-quarters of 340B revenue, while the number of Americans experiencing medical debt is higher than ever. As Congress considers legislative reforms to the 340B program so it works better for the communities and patients it was intended to serve, we urge you to use this opportunity to help uninsured and underinsured patients access discounted medicines, affordable care, and benefits to their community promised through 340B.

Our organizations will be considering more specific policy solutions in the coming months and look forward to contributing to the discussion about how to preserve the mission of this vital program for the patients and communities we represent and our nation’s true safety-net
providers.

Sincerely,