Stakeholders Prepare for New Senate with Two Key GOP Players with Vast Differences on 340B

340B Report

Incoming Senate Majority Leader John Thune (R-S.D.), left, and HELP Committee Chairperson Bill Cassidy (R-La.), right, have contrasting stances on the 340B program. (Photos courtesy: Thune, Cassidy’s Senate offices.)

Stakeholders Prepare for New Senate with Two Key GOP Players with Vast Differences on 340B

November 15, 2024Shannon Young, Associate Editor/Senior Writer

With one outspoken critic of the 340B program and one key supporter set to hold influential positions in the new GOP-controlled Senate, the drug pricing program is likely to remain a hot topic in the 119th Congress—something for which 340B stakeholders said they’re already preparing.

Hospital and other 340B provider groups—at least publicly—expressed cautious optimism this week about the future of the 340B program when Republicans take control of Congress in January 2025, including when it comes to working with two key senators: Incoming Majority Leader John Thune (R-S.D.) and Bill Cassidy (R-La.), who will chair the Senate Health Education and Labor Committee, which has jurisdiction over 340B-related issues.

Senate Republicans’ Wednesday selection of Thune to take over the chamber’s top leadership position from U.S. Sen. Mitch McConnell (R-Ky.) could be a win for 340B program advocates. Thune is considered a longtime champion of the 340B program. And he’s one of the “Group of Six” senators behind the SUSTAIN Act—a yet-to-be introduced bipartisan plan to update the 340B program. As majority leader, he’ll have the power to set the chamber’s legislative agenda, including what bills receive floor votes.

But his longtime support for the 340B program stands in sharp contrast to Cassidy, who has vocally criticized it.

As the top Republican on the HELP Committee, Cassidy launched a 2023 probeinto how certain hospitals, health centers, chain pharmacies and drugmakers operate their 340B programs. That probe is likely to continue and potentially expand under his HELP chairmanship as he’ll have more power to set hearings and enforce requests relating to such inquiries.

Cassidy announced Thursday that he will take over leadership of the HELP Committee from U.S. Sen. Bernie Sanders, a Vermont Independent who caucuses with Democrats. Cassidy is largely considered an advocate of drug industry causes, while Sanders has taken stances against drug manufacturers and cast them as the primary drivers of higher drug costs.

Thune, Cassidy Dichotomy

Thune and Cassidy’s contrasting public positions on the 340B program were highlighted as the Senate vetted Xavier Becerra, President Joe Biden’s (D) pick to serve as U.S. Health and Human Services (HHS) secretary, in 2021.

In one hearing, Cassidy grilled Becerra on the 340B program, asking if the terms “contract pharmacy” and “patient” should be defined in statute, and if so, how. Becerra cited drug manufacturers’ attempts to place restrictions on the contract pharmacy program as contrary to law and praised a Trump administration advisory opinion that concurred with that analysis. The Biden nominee also expressed his strong support for the 340B program.

Cassidy further questioned Becerra’s qualifications to lead HHS, raising doubts that an attorney could handle the role of HHS secretary. In a subsequent statement, Cassidy argued that Becerra’s responses on 340B and drug manufacturer rebates to pharmacy benefit managers demonstrated he lacked “a firm grasp on important health care policy questions.”

During a later Senate Finance Committee confirmation hearing, Thune noted that other lawmakers had questioned Becerra on the 340B program and promised to “try to keep this quick.”

“To me, the key to 340B is that it enables hospitals and covered entities to provide community benefits that otherwise might not be available,” he said, asking if Becerra would “commit to ensuring the strength of the 340B program and the community that it supports.”

Becerra agreed, adding that both rural and inner-city communities “depend on 340B.”

Sen. Jerry Moran (R-Kans.), another member of the Senate Group of Six, also expressed his concerns about drug manufacturer contract pharmacy restrictions. Becerra reiterated his support for the program and 340B providers.

Stakeholder Response

Aimee Kuhlman, the American Hospital Association’s (AHA) vice president of advocacy and grassroots, told 340B Report that her organization “congratulates Sens. Thune and Cassidy and looks forward to continuing to work with them next Congress on a range of important issues to support hospitals, health systems and our caregivers, including protecting the 340B program for communities and patients nationwide.” Kuhlman worked for Cassidy when he previously served in the U.S. House.

Bruce Siegel, president and CEO of America’s Essential Hospitals (AEH), also congratulated Thune and Cassidy on their new positions.

“We look forward to working with them to advance health policies to ensure that essential hospitals can continue to provide lifesaving services, including trauma care, burn care and behavioral health services for all Americans and serve as economic and community cornerstones,” he said in a statement.

Contentious Exchange

Cassidy questioned Siegel about what the senator described as 340B program “abuses” during a March 2018 Senate HELP Committee hearing on the 340B program, leading to a contentious back-and-forth. The two sparred over what Cassidy cast as misuses of the program, including the use of 340B discounts in hospital-based cosmetic clinics. They also disagreed on whether 340B discounts were being used, as Cassidy asserted, largely for non-elective cosmetic procedures. Siegel pointed out that 340B discounts are often used for burn patients.

Cassidy further pressed Siegel on whether hospitals should be allowed to access 340B discounts for a cosmetic clinic that “does blepharoplasty.” Siegel offered that “they should benefit from the 340B program if they fall under the rules of the program.”

Other Responses to Thune, Cassidy Appointments

Peggy Tighe, a principal at Powers law firm and a representative for Ryan White Clinics for 340B Access (RWC-340B), said “RWC-340B is hopeful that the Senate HELP committee upholds its longstanding tradition of working in a bipartisan fashion to ensure that the committee is acting in the best interests of all stakeholders.”

Bill Keeton, an RWC-340B officer and chief advocacy officer at Vivent Health, an AIDS service organization with locations in the Midwest and Denver, added that the organization further looks “forward to continuing [its] work with Sen. Thune to ensure healthcare access for underserved groups, including those living with HIV/AIDS in rural communities across South Dakota.”

“Sen. Thune has been a longstanding champion of the 340B drug pricing program,” Keeton said in a statement. “He recognizes that protecting the impact and intent of the 340B program is essential to maintaining healthcare access in rural America and preserving the safety net without imposing additional burdens on taxpayers.”

A spokesperson for the National Association of Community Health Centers (NACHC) noted that Thune has led several initiatives important to health centers, including supporting the Connect for Health Act, which extended telehealth flexibilities during the Covid-19 pandemic, and working on the bipartisan Senate 340B Working Group, among other things.

“Health centers are deeply appreciative of Sen. Thune’s history of bipartisan leadership on legislative issues critical to the health center mission, and we look forward to continuing our work with him as Senate majority leader,” the NACHC spokesperson said.

Tom Myers, AIDS Healthcare Foundation’s chief of public affairs, said his organization looks forward to working with Thune “to ensure that covered entities and the clients they serve are protected by eliminating contract pharmacy restrictions, preventing PBM reimbursement discrimination and clarifying that rebate reimbursement models such as the one proposed by Johnson and Johnson are disallowed.”

NACHC and AHF did not immediately respond to requests for comment on Cassidy’s chairmanship.

Felicity Homsted, CEO of the consulting firm FQHC 340B Compliance, told 340B Report that stakeholders were “pleased to see that Sen. Thune has been selected as the majority leader,” adding that “it was expected across the industry that Cassidy would lead the Senate HELP committee.”

“We have seen Sen. Thune lead strong bipartisan efforts through his work on the draft SUSTAIN 340B legislation and look forward to having him serve in this key role,” she said in an email.

Spokespeople for the Pharmaceutical Research and Manufacturers of America and 340B Health did not respond to requests for comment.

Editor’s Note: AHF and Powers Pyles Sutter & Verville are sponsors of 340B Report.