Another legislative vehicle fine-tuning the contentious 340B drug discount program has been introduced by a bipartisan group of senators, this time with language directing the administration not to extend a rebate pilot it plans to launch at the end of this year.
The SUSTAIN 340B Act (Supporting Underserved and Strengthening Transparency, Accountability and Integrity Now and for the Future of 340B Act) was introduced Wednesday and, according to its six cosponsors, was shaped by stakeholder feedback to bring “comprehensive reforms to the program while preserving its critical benefits.”
Similar to a counterpart bill brought last month in the House, but differing from a discussion draft circulated by outbound Senate health policy head Bill Cassidy, M.D., R-Louisiana, it favors the establishment of an independent, third-party data clearinghouse to address pharma industry concerns of improper diversion and duplicate discounts. Such a model introduces an intermediary to coordinate 340B transaction data between parties and spot any issues, and would be paid for by fees charged to program participants.
The bill instructs the Department of Health and Human Services to shutter the 340B Rebate Model Pilot Program, which plans to swap out safety-net providers’ statutory upfront discounts for manufacturer-directed rebates, “or a substantially similar program,” within a year of the bill’s enactment.
The administration, in a notice shared last week that responded to public comments regarding the pilot program, said that an approach that preserves upfront discounts or relies on a clearinghouse mechanism “would depend on covered entities to accurately and completely report 340B transaction data to the intermediary, and on the intermediary to relay that information to manufacturers and payers in a timely and standardized manner. As manufacturer commenters have observed, unlike a clearinghouse, a rebate model by its very nature incentivizes covered entity compliance as a prerequisite to receiving 340B discounts.”
The public notice added the administration’s view that such an intermediary-based model is not explicitly authorized under current statute.
Other parts of the new bill codify the use of contract pharmacies, establish a definition for a “patient” eligible for the program and introduce requirements and guardrails on child sites—all areas of statutory ambiguity that have fueled lawsuits in recent years.
It explicitly restricts insurers and related entities from discriminating against a participating provider, 340B pharmacy or patient “by imposing requirements, exclusions, reimbursement terms, or other conditions” that differ from those on non-participants. That includes lower reimbursement for covered entities compared to others, or imposing various fees.
Meanwhile, for providers, the bill also sets required patient financial assistance policies for participants, introduces new annual reporting requirements for covered entities to share how they are using the program and gives HHS new authority to audit and enforce compliance, among other updates.
“By continuing to work together in bipartisan fashion, we are committed to strengthening the 340B program and helping make certain it remains accessible to serve patients and communities for years to come,” the bill’s cosponsors—Sens. Jerry Moran, R-Kansas; Tammy Baldwin, D-Wisconsin; Shelley Moore Capito, R-West Virginia; Tim Kaine, D-Virginia; John Boozman, R-Arkansas; and John Hickenlooper, D-Colorado—said in a statement. Each is a member of the Senate’s 340B Bipartisan Working Group.
Potential updates like the clearinghouse, preservation of upfront discounts, or discrimination protections have been pushed by provider organizations that say the 340B program is a financial lifeline for care delivery.
Aimee Kuhlman, group vice president of advocacy and grassroots at the American Hospital Association, said the hospital lobbying group “appreciates the leadership” of the senators on the issue.
“We look forward to reviewing their legislation in detail, discussing it with our 340B hospitals, and working with them and other policymakers to ensure the 340B program remains strong for patients, communities, and providers across the country,” she said.
That’s not to say that momentum regarding the contentious program is entirely on providers’ side. As the program has reached a record-high $100 billion in 2025, large nonprofit health systems in particular have caught criticism for scaling up their dependency on the discounts to bolster margins, which critics—and especially drug manufacturers—say has contributed to the country’s substantial healthcare spending.
Beyond the upcoming pilot program, providers participating in the program are contending with a Centers for Medicare and Medicaid Services proposal to slash reimbursements, and mandatory data submission policies from individual manufacturers as a requisite for the discounts.