Today, U.S. Congressman Scott Peters (CA-52) announced his support for the McKinley-Thompson bill (H.R. 4392), which would reverse a Centers for Medicare and Medicaid Services (CMS) rule instituted by the Trump Administration that cuts payments to the 340B Drug Pricing Program by $1.6 billion. The bill would also protect Congress’ authority to set Medicare payment policy.

Peters also strongly refuted statements made in advertisements currently being run in the San Diego media market.

“The 340B program is critical to provide low-income patients with access to the life-saving treatments they need,” said Rep. Peters. “The cuts made by the Trump Administration to the 340B program need to be reversed. Going forward, we also must find ways to make sure the program is viable long-term; part of that is ensuring that hospitals who participate in the program are getting these critical, discounted drugs to the people for whom they’re intended.

“I want people to understand my commitment to the 340B program, as well as the work that I’m doing to make sure bad actors aren’t allowed to take advantage of the program, and to ensure that it’s solvent in the long term,” Peters said.

The ad campaign was prompted by legislation Peters introduced in December with Congressman Larry Bucshon, M.D. (IN-08) called the 340B Protecting Access for the Underserved and Safety-Net Entities Act (340B PAUSE Act) to address growing concerns that some hospitals are not always passing along the savings from the 340B drug discount program to their low-income patients. A report by the New England Journal of Medicine explained why greater transparency is needed; the report states "What fuels the 340B controversy is that while eligible entities can purchase drugs at a deep discount, they are reimbursed by payers at much higher rates. ?Consequently, hospitals could earn large 'profits' by dispensing these drugs. Since the hospital is the entity that is eligible for 340B purchases, patients seen in an outpatient clinic owned by that hospital can receive discounted drugs, billed at full price to their insurer."

The ads suggest that the bill is an attempt to cut or end the program. That is false.

The bipartisan bill would put a temporary pause on new hospitals entering the 340B program, but does not affect hospitals that currently participate in the program, nor does it place additional burdens or restrictions on Ryan White HIV/AIDS clinics, family planning clinics, Rural Health Centers, or other program grantees. It solely prevents new entrants to the program temporarily until new accountability and transparency measures can be put into place. It also calls for existing participants to begin enhanced data collection and reporting within one year. Ryan White HIV/AIDS clinics and other grantee entities are already required to comply with this type of reporting. 

The two-year moratorium gives Congress and the Health Resources and Services Administration (HRSA), the federal agency that oversees the program, an opportunity to analyze how these hospitals use 340B funds and to ensure the program is helping underserved communities gain access to healthcare services. The bill comes as a response to several Congressional hearings and government oversight reports citing the lack of data and potential abuse of the 340B program.

Rep. Peters continued, “Congress needs to ensure the funds are properly allocated, that there is no abuse, and the program is being used, as intended. A temporary pause on 340B will not affect hospitals already in the program and will allow for greater data transparency, appropriate oversight, and better care for patients.”

Peters’ support for H.R. 4392, the McKinley-Thompson bill, and 340B PAUSE follows a letter written by him and signed by 20 other House members that was sent to Speaker Paul Ryan (WI-01) and Leader Nancy Pelosi (CA-12) on December 20, 2017 stating their strong opposition to these cuts, and urging House leaders halt these cuts until Congress has an opportunity to make improvements that will lead to the program’s long-term sustainability.

The controversial organization called the AIDS Healthcare Foundation, that began running the misleading ads against Peters earlier this month, was the subject of a New York Times Magazine investigative piece last year.