The SECURE 340B Act establishes a comprehensive framework to strengthen oversight, transparency, and accountability within the 340B drug pricing program by refining eligibility standards, enhancing audit requirements, and protecting patient access.
Scott Peters
Representative
CA-50
The SECURE 340B Act establishes a comprehensive framework to increase transparency, accountability, and oversight within the 340B drug pricing program. The bill introduces clear definitions for patient eligibility, mandates rigorous reporting and auditing standards for covered entities and contract pharmacies, and prohibits discriminatory practices by health plans and pharmacy benefit managers. Additionally, it implements new patient affordability protections and creates a data clearinghouse to prevent duplicate discounts and ensure program integrity.
SECURE 340B Act Overhauls Drug Discount Program with Stricter Patient Rules and New Pharmacy Oversight
The SECURE 340B Act aims to tighten the screws on the 340B program, a federal initiative that allows safety-net hospitals and clinics to buy outpatient drugs at significant discounts. The bill introduces a rigid new definition of who counts as a "patient" (Section 2), requiring that an individual must have received a Medicare-reimbursable service from the entity within the last 24 months to qualify for discounted meds. It also forces hospitals to prove they are "clinically and financially integrated" with their satellite clinics, known as child sites, before those locations can use discounted drugs (Section 4). For the average person, this means the pharmacy counter experience at a local clinic might get more bureaucratic, as providers must now meticulously document that every single prescription is directly tied to a specific, recent medical visit.
New Rules for the Neighborhood Pharmacy
If you get your prescriptions filled at a retail pharmacy that partners with a local hospital—what the bill calls a "contract pharmacy"—things are about to get a lot more formal. Section 3 requires these pharmacies to have signed, written agreements with hospitals that include standard federal terms and a five-year record-keeping requirement. While the bill prohibits insurance companies and Pharmacy Benefit Managers (PBMs) from discriminating against these pharmacies by offering lower reimbursement rates (Section 9), it also creates a massive new data clearinghouse (Section 8). This clearinghouse will track every 340B drug transaction to prevent "duplicate discounts," where both the hospital and the state Medicaid program accidentally claim a discount on the same bottle of pills. For a pharmacist, this means more time reporting data and less time consulting with patients.
Protection from Medical Debt
One of the more direct wins for patients in this bill involves new guardrails on how hospitals handle your bills. Section 5 mandates that certain hospitals, like rural referral centers and children's hospitals, must offer financial assistance to patients earning up to 400% of the federal poverty level. Even better for those struggling with costs, these hospitals would be banned from selling patient debt to aggressive debt buyers or reporting negative information to credit bureaus unless the patient clearly has the high income or assets to pay (Section 5). This provision effectively links the privilege of getting drug discounts to how fairly a hospital treats its most vulnerable neighbors.
The Cost of Accountability
Keeping the program honest isn't going to be free. Starting in 2027, the bill hits hospitals and clinics with a "user fee" of 0.1% of their total 340B drug purchases to fund federal oversight and audits (Section 10). Additionally, every covered entity will have to hire an independent auditor every two years to check their own homework (Section 7). While these steps are designed to cut down on fraud and ensure the discounts actually reach the community, the added administrative costs could be a heavy lift for smaller clinics. If a hospital fails an audit or doesn't fix its mistakes, the Secretary of Health and Human Services now has the power to slap them with civil penalties or even kick them out of the program entirely.