Why the 340B ACCESS Act Prioritizes Patients

By: Marucs J. Hopkins, ADAP 340B Consultant

In September 2025, Representatives Earl L. “Buddy” Carter (R-GA) and Diana Harshberger (R-TN) introduced the 340B Affording Care for Communities and Ensuring a Strong Safety-Net (ACCESS) Act. H.R.5256 attempts to rein in what members of both parties have come to view as the excesses of the 340B Drug Pricing Program.

This act, as written, includes several provisions that have the potential to fundamentally change the 340B program, including:

• A very specific, if not clear, definition of who constitutes a “patient” for a 340B covered entity;
• New rules that would require hospitals to provide their 340B discounted drugs to patients who qualify as “low-income” at a reduced price or free;
• New provisions that would allow the Secretary of Health and Human Services (HHS) to set limits on the fees that third-party administrators (TPAs) and Pharmacy Benefit Managers (PBMs) can charge for 340-related services;
• Provisions that would tighten the rules for how 340B hospitals calculate their disproportionate share (DSH percentage) by requiring hospitals to demonstrate that each child site (e.g., off-site clinics) independently meets standards for serving low-income and vulnerable patients, including when registering for state Medicaid programs; 
• A provision that allows hospitals to enter contracts with “contract pharmacies” without limiting the number of said pharmacies with which a hospital can enter a contract, except for some covered entities, free-standing cancer hospitals, and rural referral centers, which can only contract with a maximum of 5 contract pharmacies; and,
• Provisions that would create a clearinghouse for prescription drug data;
• New reporting requirements for hospitals.

While many of these provisions address several of the issues that patients, advocates, providers, and manufacturers have with the program (e.g., duplicate discounts, contract pharmacy “discrimination,” and transparency requirements), specific provisions raise concerns about both the short- and long-term impacts on vulnerable patient populations, older patients, live in remote or rural areas, and/or living with chronic conditions that require specialty care and medications.

Photo Source: Congress.gov

Defining a “Patient”

Sec. 2, (a)(3)

One of the key issues with the 340B Drug Pricing Program, as originally drafted, is that the legislation did not define which patients qualify as “patients” for 340B drug discounts and rebates.

H.R. 5256 defines a patient by using a 4-part checklist (with some specific restrictions):

1. The patient receives care from the covered entity (CE) on a regular enough basis that they have an established relationship with the CE, and the CE keeps and maintains patient records;
2. The patient receives services from a provider who is either directly employed by or contracted to provide services for the CE;
3. The patient receives a prescription for a 340B discounted drug that is the direct result of the services a patient receives in step 2; and,
4. The patient must have an “ongoing relationship” with the provider, defined as at least one in-person visit within the prior 24 months (2 years).

To qualify as a “patient,” the patient must satisfy all four conditions. These provisions are designed to reduce the number of “patients” receiving 340B-discounted drugs—an issue that manufacturers and advocacy groups have been raising since the program's inception.

There are two specific issues within the patient definition that have the potential to severely and negatively impact patients who are older, remote or rural, and/or living with a chronic condition:

For patients who receive a prescription via a telemedicine or telehealth visit, the patient must have undergone an in-person examination by the CE within the six months prior to the prescription being written. This appears to have been designed to reduce the potential for hospitals and other CE to receive 340B rebates for ineligible patients receiving telehealth services. Still, it could recreate the distance, transportation, and geographic barriers that telehealth was designed to overcome (Sec. 2, (a)(3)(B)).

For patients requiring specialty care from providers not directly employed or contracted by the CE, another provision requires strict documentation of the coordination of care between the CE and the outside specialist provider. This provision has the potential to limit the available care options available to vulnerable patients, particularly those with chronic conditions. In order for that care to qualify, the patient’s case must satisfy each of the following conditions:

• The Initial Visit: The patient must have an in-person visit with a provider at the 340B hospital or clinic.
• The Formal Referral: During that visit, the 340B provider must formally evaluate the patient, determine that they need specialty care that the hospital does not offer (e.g., advanced rheumatology), and make a formal recommendation (a referral) for them to see that outside specialist.
• The Documentation: The 340B provider must document this evaluation and recommendation in the patient’s medical record at that time.
• The 1-Year Window: The patient must then see that outside specialist for the recommended service within 1 year of the date of that initial recommendation.

Again, this provision was designed to solve two issues:

1. The "Pop-in" Problem: A patient with HIV sees a private infectious disease doctor (unaffiliated with a 340B hospital) and gets a prescription for an expensive HIV medication.
2. The "Referral" Loophole: That doctor then "refers" the patient to a 340B hospital's contract pharmacy. The patient walks into the pharmacy, registers, and gets their prescription filled at a massive discount, even though they never received any actual care from the 340B hospital itself.

While the patient definition is vital for reining in abuses of the 340B program, there are still some issues to work out before this bill goes into effect (Sec. 2, (a)(3)(C)).

Who Gets the Discount?

Sec. 6, (a)(G)

One of the primary issues raised by patient advocates about the 340B Program is that the savings for patients rarely “trickle down” to them.

If the purpose of the 340B Program was to increase access to affordable or free care and treatment for lower-income patients, shouldn’t those deep drug discounts be directly extended to the patients whose income nets hospitals and other CE 340B revenue?

Sadly, too many hospitals don't think so.

Photo Source: iStock - rights purchased

H.R. 5256 would require hospitals to establish a sliding fee scale, which requires the CE to provide a direct discount to eligible patients that would result in that patient paying no more than a pre-defined maximum out-of-pocket obligation as it relates to each 340B-covered outpatient drug:

• If the patient’s income is less than the Federal Poverty Level (FPL), the out-of-pocket obligation is $0;
• If the patient’s income is at or above the Federal poverty guidelines but below 200 percent of the Federal poverty guidelines, the lesser of 20 percent of the otherwise applicable out-of-pocket obligation or $35; and,
• If the patient’s income is at or above 200 percent of the Federal poverty guidelines, the lesser of 30 percent of the otherwise applicable out-of-pocket obligation or $50 applies.

This provision requires any contract pharmacies contracted with the CE to provide these discounts on behalf of the CE.

While these provisions are a welcome change, hospitals could make the process so cumbersome for patients that these discounted prices become inaccessible. To receive this discount, hospitals will likely require patients to formally apply and be approved by the hospital’s financial assistance policies. This is very likely to include administrative paperwork and income verification hurdles that are regularly used to dissuade patients from applying. Moreover, this could result in the creation of scenarios where patients would receive those discounts at off-site pharmacies (e.g., Walgreens, CVS), but the pharmacy must act as a “financial screener” to ensure that the patient has applied for and received approval for those discounts, which could result in delays of care at the point-of-sale.

It could also result in a backend administrative nightmare for providers and pharmacists, requiring real-time eligibility checks, the calculation of a drug-specific sliding-scale price, and proper claim processing. This could also lead to higher operating costs for pharmacies.

Limiting Third-Party Fees for Providing 340B-Related Services

Sec. 17, (f)

This provision essentially prohibits third-party administrators (TPAs) and pharmacy benefit managers (PBMs) from applying specific fee scales to 340B-related services. For example, TPAs would be required to provide services at a flat fee that is NOT based, directly or indirectly, on a percentage of the 340B savings the TPA helps the hospital identify.

For example, many TPAs and PBMs operate on a “percentage-of-savings” model, which allows them to charge a hospital a specific percentage of the savings it receives (e.g., 20%). In this case, the TPA/PBM gets 20% of the savings.

Under this new provision, this highly lucrative business model would be eliminated. For the TPAs/PBMs, this could prove financially disastrous, requiring them to compete on a new model, such as a simple flat-rate or per-prescription fee, or forcing TPAs to exit the 340B space (a net win for hospitals and patients).

It also addresses one of the primary issues manufacturers have been complaining about for decades: that 340B revenues aren’t going just to CEs but are being siphoned off by third-party administrators.

Reining in the Expansion of 340B Eligibility to Child Sites

Sec. 4, (a)

This provision would eliminate the ability of hospitals to extend 340B program eligibility to numerous off-campus “child sites,” specifically those that are located in affluent areas and those that do not independently meet the disproportionate share percentage requirements that would allow them to be eligible for the 340B program on their own.

This would make it much harder for hospital systems to purchase private practices in wealthy areas and immediately begin receiving 340B revenues from drugs provided by those locations. It would also require those child sites to be fully integrated into the hospital system, specifically by requiring those facilities to enroll as Medicaid providers. Finally, this provision would require hospitals to de-register any off-campus sites that cannot meet these new requirements.

Contract Pharmacy Rules

Sec. 5

This section would allow CEs to engage an unlimited number of contract pharmacies to provide services (with specific exceptions) and require drug manufacturers to furnish drugs to those pharmacies.

The 340B program is ripe for abuse, specifically by major hospital systems, large pharmacy chains, and Pharmacy Benefit Managers (PBMs), where little to no oversight exists to ensure that 340B revenues are used for their intended purposes. Despite this lack of oversight, the number of retail contract pharmacies has exploded over the last 15 years.

From 2009 to 2022, the number of retail contract pharmacies participating in the 340B program increased from just 789 to an astonishing 25,775. By 2023, five for-profit pharmacies and Pharmacy Benefit Managers (PBMs)—CVS Health, Walgreens, Cigna (via Express Scripts), UnitedHealth Group (via OptumRx), and Walmart—accounted for 75% of all 340B contract pharmacy relationships with covered entities, bringing in an estimated $3 billion in gross profits.

Photo Source: Drug Channels Institute

Editor's Note: According to Dr. Adam Fein with the Drug Channels Institute, "The 340B contract pharmacy has become increasingly concentrated with five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via Optum Rx), Walgreens, and Walmart."

One of the chief complaints from manufacturers and some patient advocacy organizations is that this unlimited expansion of contract pharmacies creates scenarios where patients are receiving medications from pharmacies that are nowhere near them, such as a patient living in urban Colorado, but their contract pharmacy only has physical locations in Hawaii (this is not a specific example).

This bill would require a contract pharmacy to be located within the service area of the CE, except for mail-order pharmacies (Sec. 5 (F)(iv)).

Of particular concern here is the cap on contract pharmacies for standalone cancer hospitals and rural referral centers. H.R. 5256 limits the number of contract pharmacies these providers may engage for pharmacy services to 5. Moreover, this subset of CEs may NOT engage a mail-order pharmacy to provide 340B drugs (Sec. 5, (F)(iii)).

This could result in scenarios where patients who currently receive one or more specialty drugs from one or more mail-order pharmacies may no longer have those options, forcing them to get all of their medications from a single pharmacy, or forcing the CEs in this subset to simply not contract with any specialty pharmacy at all, leaving patients with no options to receive 340B-discounted drugs.

Creating a 340B Clearinghouse

Sec. 16, (a)(C)

H.B. 5256 also requires the Health Resources Services Administration (HRSA) to create a federal 340B program claims data clearinghouse for the submission of claims-level data for covered outpatient 340B.

This clearinghouse is designed to prevent “duplicate discounts”—a scenario in which a manufacturer is required to both provide a 340B discount and pay a Medicaid rebate for the same drug sale. The bill also requires all state Medicaid programs, Medicaid Managed Care Organizations (MCOs), Medicare Part D plans, and Medicare Advantage plans to submit their claims data to this clearinghouse within 5 days following the date of claim payment.

In this new system, the process would work like this:

• A patient receives a drug.
• Medicaid pays the claim.
• Data is sent to the clearinghouse within 5 days.
• Data is cross-referenced with prescription data from 340B hospitals and instantly identifies if the drug was purchased with a 340B discount.
• The system flags the claim, preventing the state Medicaid program from also putting the same drug on its quarterly rebate invoice to the drug manufacturer.

This is widely viewed as a win for manufacturers, but could create a compliance risk if the clearinghouse is inaccurate. It basically requires hospitals to be 100% accurate at all times, which is virtually impossible.

The creation of this clearinghouse may also raise patient privacy concerns, specifically if those claims data are accessible to bad-faith actors, such as law enforcement agencies attempting to use patient data to identify non-citizens for targeting. Moreover, this clearinghouse would likely be a high-value target for data breaches, potentially putting a significant percentage of the population at risk of having their private health information in a consolidated location.

Photo Source: Cimarron Consulting

Transparency for Hospitals

Sec. 10, (a)(L)

This provision requires CEs to “…report how they are using the 340B margin using standardized rules established by HHS that are consistent with reporting requirements that federally qualified health centers use for Uniform Data System (UDS) reporting” (Buddy Carter, 2025).

One of the primary complaints against the 340B program has been the wholesale lack of transparency for virtually all types of CEs, with the exception of federally sponsored providers, such as AIDS Drug Assistance Programs and certain specialty providers, such as those that treat hemophilia or Black Lung Disease.

H.B. 5256 would require CEs to report the number of patients served, the amounts of 340B revenue, and how those revenues are used. It requires, for the first time, that CEs justify how they spend 340B dollars, which hospitals vehemently oppose.

Closing

In general, the 340B ACCESS Act is an excellent first step. Ultimately, it will come down to whether legislators can muster the political will to pass this legislation without caving to the very influential hospitals and their lobbyists, who have regularly threatened to respond to such requirements with closures, service suspensions, and job losses.

Further, the 340B program is largely unknown to the vast majority of constituents, many of whom have virtually no idea how the American healthcare system “works” (or doesn’t). 340B is a wonky issue that even experts on the subject admit is virtually impenetrable without extensive knowledge of how the drug procurement and dispensing model in the U.S. “works.”

That said, it’s a bill that should be high on the priority list if the goal is to save taxpayers’ money. ADAP Advocacy contends these reforms are an investment in patients.

[1] 340B ACCESS Act, H.R. 5256, 119th Cong. (2025). https://www.congress.gov/bill/119th-congress/house-bill/5256/text

[2] Buddy Carter. (2025, September 10). Carter, Harshbarger introduce legislation to ensure access and transparency in 340B Drug Pricing Program. Buddy Carter: Press Releases. https://buddycarter.house.gov/news/documentsingle.aspx?DocumentID=15906

[3] Fein, A. J. (2023, July 11). EXCLUSIVE: For 2023, five for-profit retailers and PBMs dominate an evolving 340B contract pharmacy market. HMP Omnimeida, LLC: Drug Channels. https://www.drugchannels.net/2023/07/exclusive-for-2023-five-for-profit.html

[4] Nikpay, S., McGlave, C. C., Bruno, J. P., Yang, H., & Watts, E. (2023, August 04). Trends in 340B Drug Pricing Program contract growth among retail pharmacies from 2009 to 2022. JAMA Health Forum, 4(8): e232139. https://doi.org/10.1001/jamahealthforum.2023.2139

[5] U.S. Government Accountability Office. (2018, June 21). Drug discount program: Federal oversight of compliance at 340B contract pharmacies needs improvement. U.S. Government Accountability Office: Reports & Testimony https://www.gao.gov/products/gao-18-480

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.