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July 21, 2022

What to Expect in the November Elections and Implications for the 340B Program

Ted Slafsky
Founder and Principal of Wexford Solutions, Publisher, 340B Report

With a little over three months left until the crucial midterm elections, it is an excellent time to look into what to expect in November. The party in control of Congress in 2023 and 2024 will have a significant impact not only on big picture matters like gun regulation, immigration, and Roe vs. Wade but also on more discrete issues like the 340B program. Regarding the 340B program, you can expect a much different set of priorities even if Republicans take over just one of the two chambers.

Democrats face enormous headwinds as they try to retain control of their narrowest majority in the House since 1890 and an even smaller majority in the Senate. Right now, House Democrats have just a few seats over the 218-majority threshold to govern. In the Senate, Vice President Kamala Harris needs to regularly be on hand in Washington, D.C., to break 50-50 ties. 

History provides a good barometer of what we can expect in November. The President’s party almost always loses ground during midterm elections. Since World War II, the President’s party has lost an average of 27 seats in the House, and an average of 2.5 seats in the Senate. To make matters worse for the Democrats, the country is facing historical inflation. According to recent polling, President Biden’s approval rating is stuck in the 30s, with nearly 80 percent of the country saying we are headed in the wrong direction.

Not all is gloom and doom for the Democrats. Support for the party has increased since the Supreme Court overturned Roe vs. Wade, and the country has faced a series of horrific mass shootings. A recent New York Times and Siena College poll found that the country is evenly divided over which party should control Congress in November. Nonetheless, according to 538, the well-respected polling site run by ABC News’ Nate Silver, Republicans still have an 86 percent chance of winning control of the House in November

The race for the Senate is much closer. Senate GOP leaders are concerned that a number of their nominees in key races are flawed, and Democrats continue to outraise their GOP opponents. According to 538, Republicans currently have a 53 percent chance of a takeover.

Implications for the 340B Program

With a strong likelihood of the House flipping to the GOP, you can anticipate a change in posture towards the 340B program. If the GOP takes over the House, the House Energy and Commerce Committee could take another crack at placing additional restrictions on the 340B program. During the last session controlled by Republicans (2017-2018), several hearings were held raising concerns about 340B’s growth. Nearly 20 pharmaceutical-industry-friendly bills were introduced, offered as amendments, or proposed as discussion drafts.

Many of the bills were aimed at hospital use of the 340B program. These bills included: 

  • Narrowing the definition of patients eligible for 340B discounts
  • Placing a two-year ban on new hospitals qualifying for 340B
  • Reducing the number of private non-profit hospitals eligible for the 340B program
  • Scaling back use of the 340B program outside of the four walls of the hospital
  • Requiring more reporting on 340B hospital revenue and how they use their 340B savings

Other bills would have impacted all covered entities, including legislation to significantly scale back the contract pharmacy program and increase the number of audits of 340B stakeholders.  

Lack of Unanimity in GOP Caucus

It is important to note that none of the House bills made it to the floor during the last time the GOP controlled the House. This is likely because not all House Republicans favored the changes to the 340B program. Several Republican lawmakers sponsored legislation that was favorable to 340B providers during this period. Since then, the program's level of GOP support appears to have grown.

Of the 181 lawmakers who signed on to a July 15 letter to HHS Secretary Becerra urging the administration to impose civil monetary penalties against drug manufacturers that have placed restrictions on the contract pharmacy program, 37 came from the GOP. Thirty-one of the current 106 House sponsors of the 340B Protect Act are Republicans.

As for the Senate, I would not expect nearly as much effort to place further restrictions on the 340B program as in the House, even if the GOP takes control. The last time the Senate was under a GOP majority, the Senate HELP Committee (the committee that has jurisdiction over the 340B program) held a series of hearings focused mainly on potential areas to rein in the program. However, the discussions were largely cordial in nature, and very few concrete legislative proposals emerged.

Moreover, the Senate has a tradition of working in a more bipartisan manner, and it is difficult to pass most bills without 60 votes. In addition, while the GOP caucus includes a number of influential 340B skeptics, the program has some important allies. For instance, Senator John Thune (R-SD), a long-time 340B champion who will be easily re-elected in November, has a good chance of continuing in the Senate leadership. 

Congressional Activity Outlook

Nonetheless, we should expect more attention to the 340B program in Congress in 2023 as the party in power tries to make its mark in the legislative arena quickly. While there will be more noise about the program, it is unlikely any significant changes will make it to President Biden’s desk. However, if the contract pharmacy standoff continues, look for pressure to build for Congress to resolve the dispute.

Learn More During the 340B Coalition Summer Conference

Join me on August 1 during the upcoming 340B Coalition Summer Conference for the View from Capitol Hill Luncheon. I will participate on a panel with some of the most respected 340B veterans to discuss the latest updates impacting the 340B program. Register today.

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Disclaimer

The views and opinions expressed in this blog are those of the authors. They do not necessarily reflect the official policy or position of any other agency, organization, employer, or company. Assumptions made in the analysis do not reflect the position of any entity other than the author(s). These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.