Peters, Joyce Unveil Landmark Bill to Improve Discount Drug Pricing Program

Washington, D.C. - Today, Representatives Scott Peters (CA-50) and Dr. John Joyce (PA-13) introduced the bipartisan SECURE 340B Act, the first-ever comprehensive, bipartisan proposal to modernize the 340B Drug Pricing Program since its creation in 1992. This bill is also cosponsored by Reps. Jake Auchincloss (D-MA), Dan Crenshaw (R-TX), and Nanette Barragán (D-CA).

"For nearly a decade, I've fought to protect the 340B program for the safety-net providers and low-income patients in San Diego who depend on it to afford their prescription drugs. I've also pushed to make sure those savings actually reach the people for whom they're intended. This bill does both," Congressman Peters said. "The SECURE 340B Act closes the loopholes that have allowed the program to drift from its mission, stops the legal chaos that plagues the program today, and puts in place the kind of transparency and accountability that will keep 340B strong for decades to come."

"Since its establishment, the 340B program has served as a critical lifeline for low-income patients to access lifesaving medications," said Congressman John Joyce, M.D. "The statute has long needed additional clarity to reflect the way the program operates today and ensure that access to treatment remains available to patients most in need and the healthcare facilities that serve them. This bill, a bipartisan solution that I am proud to have worked on with my colleague Representative Scott Peters, seeks to close loopholes that have compromised the integrity of the program while ensuring a stable path forward for the many hospitals and patients in my district that rely on it."

The 340B Program, the nation's second-largest federal prescription drug program, was created to help safety-net providers stretch limited resources through discounted drug prices. These discounts have historically been assessed upfront at the point of purchase.

However, since federal law never defined who qualifies as a 340B "patient," the program became ambiguous, and has been misused. In the absence of a legal "patient" definition, manufacturers attempted their own rebate verification systems. Courts have tried to block these rebate pilot programs, but only on procedural grounds. To this day, the federal government still has no uniform way to prevent discounted medicines from going to ineligible patients or duplicate discounts, or to validate pricing data across federal programs.

This is particularly significant for California as world class health care frequently coexists with rising prescription drug burdens-especially in cities like San Diego. In 2023, 20% of Californians did not fill a prescription, and 16% reported cutting pills or skipping doses due to cost.

The SECURE 340B Act addresses these gaps. It pauses manufacturer rebate models for four years while a new patient definition is created and standards for contract pharmacies, data sharing, and transparency take effect. It establishes a clear, statutory definition of "patient" based on previous federal guidance. And the bill directs the Health Resources and Services Administration (HRSA) to use an independent, conflict-free clearinghouse to securely manage prescription-level data, verify claims, and protect privacy. It also strengthens HRSA's authority and provides the transparency and federal guardrails the program has lacked for more than three decades.

"Recent polling shows that while most voters are unfamiliar with the 340B program, once they learn what it is, an overwhelming 91% say Congress should increase transparency and accountability. That tells us something important: even without getting everything they want, stakeholders and voters agree on the core reforms needed to protect patients and strengthen the program. Congressman Peters' SECURE 340B Act reflects those areas of consensus; a clear patient definition, transparency without rigid spending mandates, and guardrails that keep the program focused on patient benefit." - Scott Suckow, Chair of Patient Advocates United in San Diego and Executive Director of the Liver Coalition.

"We support legislation that strengthens, stabilizes, and preserves this critical program for eligible hospitals and federally qualified health centers who care for our most vulnerable communities and patients. At BMC Health System, 340B savings are reinvested directly into services that expand access to care, improve health outcomes, and strengthen the healthcare safety net for underserved communities. We recognize that advancing and sustaining the 340B program, inclusive of addressing the rebate model, requires balancing the needs of patients, providers, and manufacturers. Establishing long-term regulatory certainty through durable, bipartisan solutions will help providers plan for the future and continue delivering high-quality, affordable care to those who need it most." - David Twitchell, PharmD, MBA, SVP and Chief Innovation Officer, Boston Medical Center Health System

"The SECURE 340B Act is an important and much-needed step toward bringing real guardrails, transparency, and accountability to a program that has grown well beyond its original design, and employers and other healthcare purchasers strongly support the introduction of this legislation. The bill provides a meaningful framework to help ensure the 340B program better serves patients and the communities it was intended to benefit, while creating a serious foundation for bipartisan policymaking. We look forward to working with policymakers to further strengthen the legislation, ensuring real accountability for 340B covered entities and drug makers alike while protecting flexibility for plan sponsors to ensure they can purchase affordable medications for working families." - Shawn F. Gremminger, MPP, President and CEO, National Alliance of Healthcare Purchaser Coalitions

"Advocates for Community Health is deeply grateful for the work of Representatives Peters, Joyce, Auchincloss, and Crenshaw to advance commonsense 340B program reform. ACH is a longstanding advocate for legislation that would stabilize and clarify the 340B program, and we are encouraged that SECURE reflects many of our members' core principles for reform, including the piloting of a claims clearinghouse before we rush into a rebate model. We look forward to continuing to advance this legislation, including refinements to the patient definition that reflects current health center operating procedures, as soon as possible." - Amanda Pears Kelly, CEO, Advocates for Community Health

"The 340B program is vital to Community Health Centers (CHCs) and the 52 million people - 1 in 7 Americans, including 1 in 3 in rural communities - who rely on CHCs for affordable, comprehensive, and high-quality care. We commend Representatives Joyce, Crenshaw, Peters, and Auchincloss for their bipartisan leadership in advancing this comprehensive legislation. Key provisions addressing contract pharmacies, providing a four-year delay of any potential rebate model, and establishing and evaluating a neutral clearinghouse are especially important. We look forward to working with these leaders and Members on both sides of the aisle to build upon the bill being introduced today and advance legislation that preserves and strengthens access to 340B for CHCs and their patients." - Kyu Rhee, MD, MPP, President and CEO, National Association of Community Health Centers

"The Community Oncology Alliance (COA) appreciates the leadership of Representatives Peters, Joyce, Auchincloss, and Crenshaw for recognizing that the 340B program urgently needs bipartisan reform. The SECURE 340B Act includes important steps toward transparency, accountability, clearer patient eligibility, stronger oversight of child sites, and patient affordability protections. Those are reforms that COA has long called for to be urgently addressed. At the same time, Congress must ensure that any final legislation does not lock in the very abuses that have distorted 340B-particularly arrangements that allow PBMs from being contract pharmacies and hospital systems from capturing savings that should benefit vulnerable patients. We look forward to working with the sponsors to strengthen the legislation so that 340B discounts help patient in need, not profit PBMs and hospitals." - Ted Okon, Executive Director, Community Oncology Alliance

Read full bill text here.

Background:

Rep. Peters has been one of the more persistent voices in Congress pushing to reform the 340B drug discount program. Throughout his time in Congress, he's led letters to House leadership, Energy and Commerce Committee leadership, and California Governor Gavin Newsom to encourage action and continue efforts to reform the program.

Congress created the 340B Drug Discount Program in 1992 through the Veteran's Health Care Act. Under the 340B Program, covered entities (like children's hospitals, hospitals with a disproportionate share of low-income patients, and critical access hospitals), Ryan White HIV/AIDS program grantees, Federally Qualified Health Centers, and specialized clinics may purchase outpatient drugs at large discounts. Covered entities save an average of 25 percent to 50 percent off of the cost of covered drugs purchased through 340B.

Since 1992 though, the program has grown rapidly. Discounted purchases under 340B reached $81.4 billion in 2024, a 22.8% increase over the $66.3 billion recorded in 2023. Measured at list-price value according to the Congressional Budget Office (CBO), 340B drugs now total nearly $147.8 billion, making 340B the second-largest federal drug program. This makes 340B the second-largest federal prescription drug program. Independent analyses and CBO attribute this growth not to rising drug prices but to behavioral changes by covered entities.

Despite the program's growth, federal courts have repeatedly held that the Department of Health and Human Services lacks regulatory authority for the program. This has caused the Health Resources and Services Administration to rely on non-binding guidance to run the program. This has left the program open to abuse.

For example, the New York Times found that Bon Secours Health System, in Virginia, used those funds to expand services in affluent neighborhoods at the expense of patients who really needed it. A Senate HELP Committee investigation found that the health system generated more than $276 million in savings and revenue from a single Richmond hospital between September 2018 and September 2023 - Richmond Community Hospital, located in a low-income, majority-Black neighborhood. Investigative reporting documented that Bon Secours hollowed out that hospital, closing its intensive care unit and maternity ward, while channeling resources to facilities in wealthier neighborhoods and creating legal links between the hospital and clinics in affluent areas so those clinics could access 340B discounts.

In other cases, low-income patients were hounded by hospitals to pay for health care that should have been free at the point of service.

While the 340B Program dictates the ceiling price at which drugs must be sold to covered entities at, it does not specify the amounts that covered entities may, in turn, charge patients for the same drug. As the Wall Street Journal has documented, some covered entities are able to sell drugs at prices that significantly exceed the otherwise low acquisition cost, in order to collect significant savings that can be used for any array of needs by the covered entity.