Opposing Sides of 340B Debate Converge on Data Clearinghouse, Patient Definition

A session on 340B program developments included a structured debate on whether the program should continue in its current form at NASP’s inSPire2026 conference, held September 22-25 in National Harbor, Maryland. Each side of the debate was assigned, not based on participants’ personal views, with outside data and the current legislative landscape supporting the arguments.

Mark Ogunsusi, PharmD, JD, a K&L Gates partner focused on 340B compliance, argued the covered-entity position. Josh Weber, PharmD, MBA-HCM, CSP, ACE, argued the manufacturer position, noting the assignment differed from his current role in health-system pharmacy. Patrick J. Riley, a K&L Gates associate whose practice covers health care reimbursement and payer disputes, moderated.

Program Purpose and Safety-Net Impact

Ogunsusi said 340B originated in 1992 as a response to the 1990 Medicaid Drug Rebate Program. Once manufacturers stopped offering voluntary discounts to safety-net providers to avoid rebate liability, Congress created 340B to preserve those discounts by statute in exchange for guaranteed access to Medicaid and Medicare markets. Weber said the program has grown beyond that intent, with 340B purchases reaching $100 billion in 2025, a 22% increase from 2024.¹ He cited a HEAL Collaborative analysis finding 340B hospital assets grew nearly 40% from 2014 to 2022 while uncompensated care per bed fell 15%.²

On the program’s role in the safety net, Ogunsusi cited data showing 340B hospitals delivered 67% of US uncompensated care and 77% of Medicaid hospital services in 2020 while representing 44% of hospitals, figures consistent with a 340B Health/Dobson & DaVanzo study.³ Weber cited a 2021 study in this journal that found no evidence hospitals increased uncompensated care more than comparable hospitals that did not enter the 340B program.⁴

Contract Pharmacies and Patient Definition

Ogunsusi said contract pharmacies were in use before the 1992 statute and that Congress declined to limit covered entities to in-house pharmacies when it passed the law. Weber said contract pharmacy networks, which now number in the hundreds for some health systems, are not linked to patient benefit, citing dispensing fees of $1,000 to $2,000 per transaction. In February 2026, the Fifth Circuit unanimously upheld Louisiana’s contract-pharmacy access law against a challenge from AbbVie, PhRMA, and AstraZeneca.⁵

On patient definition, Weber said 340B lacks a verifiable, time-bound standard for what qualifies as a patient relationship. Ogunsusi said that is by design, noting the word “patient” appears once in the statute. AbbVie has sued HRSA seeking to limit eligibility to a 12-month, actively managed care relationship.⁶ A 2023 GAO review of 53 hospitals that received a COVID-19 eligibility exception found duplicate discounts were the most common issue among those that HRSA had audited, and no manufacturer had audited any of those hospitals since 1992.⁷

Rebate Model and Legislative Outlook

Ogunsusi said the January 2027 rebate pilot is unnecessary given HRSA’s existing audit authority. Weber said it is the only way for manufacturers to verify claims before granting a discount. The pilot covers about 25 drugs, or 5.5% of 340B sales; hospital groups project a collective cash-flow impact of more than $1 billion annually.⁸

In Congress, the Senate’s SUSTAIN 340B Act, introduced August 5, 2026, would establish a statutory patient definition and end the 340B Rebate Model Pilot Program within 1 year of enactment, transitioning to an independent data clearinghouse.⁹ The House’s SECURE 340B Act, introduced July 6, 2026, would pause the manufacturer rebate model for 4 years while a new patient definition and contract-pharmacy standards take effect.¹⁰

Separately, CMS has proposed cutting 340B Medicare reimbursement to average sales price minus 33.4%, down from average sales price plus 6%, a change CMS projects would reduce Original Medicare drug payments by $4.55 billion in the first year.⁹ HHS is also reported, based on unnamed sources, to be considering a transfer of 340B oversight from HRSA to CMS by the end of September 2026.¹¹

Areas of Agreement

Despite arguing opposing positions, Ogunsusi and Weber recommended similar changes: a user-fee-funded data clearinghouse covering Medicaid, Medicare, and commercial claims, and a statutory patient definition paired with transparency requirements on covered entities’ savings and charity care. Those questions remain unresolved in Congress. The SUSTAIN and SECURE bills differ on the rebate model’s fate, and AbbVie’s lawsuit and the Fifth Circuit ruling are proceeding independently of either bill.

References

1. HRSA announces 340B program sales reached $100 billion in CY 2025. AHA News. July 14, 2026. Accessed September 25, 2026. https://www.aha.org/news/headline/2026-07-14-hrsa-announces-340b-program-sales-reached-100-billion-cy-2025
2. New HEAL Collaborative analysis reveals 340B hospitals increase hospital assets while reducing patient care spending. News release. Heal Collaborative. March 17, 2026. Accessed September 25, 2026. https://www.businesswire.com/news/home/20260316433615/en/New-HEAL-Collaborative-Analysis-Reveals-340B-Hospitals-Increase-Hospital-Assets-While-Reducing-Patient-Care-Spending
3. 340B DSH hospitals provide 77% of Medicaid hospital care, new study finds. News release. 340B Health. September 26, 2022. Accessed September 25, 2026. https://www.340bhealth.org/newsroom/340b-dsh-hospitals-provide-77-of-medicaid-hospital-care-new-study-finds/
4. Desai SM, McWilliams JM. 340B Drug Pricing Program and hospital provision of uncompensated care. Am J Manag Care. 2021;27(10):432-437. 10.37765/ajmc.2021.88761
5. AbbVie Inc v Murrill, No. 24-30645 (5th Cir 2026). Accessed September 25, 2026. https://www.ca5.uscourts.gov/opinions/pub/24/24-30645-CV0.pdf
6. Goldman M. Exclusive: AbbVie sues to narrow drug discount patient definition. Axios. April 8, 2026. Accessed September 25, 2026. https://www.axios.com/2026/04/08/abbvie-drug-discount-patient-lawsuit
7. US Government Accountability Office. 340B Drug Discount Program: Information about hospitals that received an eligibility exception as a result of COVID-19 report. May 11, 2023. Accessed September 25, 2026. https://www.gao.gov/assets/gao-23-106095.pdf
8. HRSA sets 2027 launch for the 340B rebate model, announces requirements. News release. HFMA. July 31, 2026. Accessed September 25, 2026. https://www.hfma.org/operations-management/340b-rebate-model-2027/
9. Grossi G. Senate unveils sweeping bill to reform 340B drug program. AJMC. August 10, 2026. Accessed September 25, 2026. https://www.ajmc.com/view/senate-unveils-sweeping-bill-to-reform-340b-drug-program
10. Peters, Joyce unveil landmark bill to improve discount drug pricing program. News release. Office of Rep. Scott Peters. July 6, 2026. Accessed September 25, 2026. https://scottpeters.house.gov/press-releases/peters-joyce-unveil-landmark-bill-to-improve-discount-drug-pricing-program
11. HHS leadership expected to move 340B oversight from HRSA to CMS by end of September. RWC-340B. September 11, 2026. Accessed September 25, 2026. https://rwc340b.org/hhs-leadership-expected-to-move-340b-oversight-from-hrsa-to-cms-by-end-of-september/