It seems safe to say that the entire healthcare industry is bracing for what’s to come from President Trump’s first 100 days in office following a blizzard of confusing and consequential executive orders in his first weeks in office. On a good note, it’s a time when 340B could sneak under the radar because of broader directives aimed at higher profile healthcare programs. If not, much could be at stake for 340B.
The possibility of rebates looms: Novartis became the fifth manufacturer to sue HRSA over blocking its 340B rebate model. Also, congressional Republicans were reportedly mulling a proposal to prohibit covered entities from charging employer-sponsored commercial insurance plans full price for 340B-discounted drugs as part of efforts to offset Trump’s planned tax cuts and other priorities.
How this ends is anyone’s guess in this chaotic political climate.
Confirmations and executive orders
Robert F. Kennedy Jr., the nominee to lead the Department of Health and Human Services, faced blistering questions during his confirmation hearings before two Senate committees. Kennedy repeatedly insisted he was not anti-vaccine despite his controversial record on the topic. He emphasized his desire to tackle chronic disease and processed foods if confirmed, and encouragingly, he voiced concern about the plight of rural hospitals. But he also showed an unfamiliarity with the Medicare and Medicaid programs and faced some tough questions about his past support for abortion rights.
With his support narrowly divided along partisan lines, Kennedy’s fate may ultimately rest in the hands of Republican Sen. Bill Cassidy, a physician who chairs the Senate Health, Education, Labor and Pensions Committee (and is a strident foe of 340B). Cassidy has not endorsed Kennedy and told him during the hearing that he was concerned by his embrace of vaccine misinformation.
“Can I trust that that is now in the past?” Cassidy asked.
Notably, Katie Miller, the wife of Trump advisor Stephen Miller and chair of a dark-money group that ran ads last year tying 340B to illegal immigration (unfounded), is the spokeswoman for Kennedy’s confirmation bid. Trump has also invited her to serve in the so-called Department of Government Efficiency (DOGE), the advisory panel led by Elon Musk that will look for ways to slash federal spending and regulations.
Speaking of HHS, its acting secretary, Dorothy Fink, effectively enacted a gag order on issuing all documents or public communications until Feb. 1. That has also put a freeze on reviews for research grants, HRSA audits, and travel and training for scientists at the National Institutes of Health, the largest public biomedical funder in the world. The White House also announced it would withdraw the U.S. from the World Health Organization and ordered the Centers for Disease Control and Prevention from communicating with the agency. And in a further act of chaos, the Trump administration put a halt on all federal grants and loans outside of Medicare and Social Security, then a federal judge temporarily blocked it, then the White House rescinded it. Clear?
Perhaps most shocking was the president’s firing of as many as 18 inspector generals, including at HHS, despite a rule requiring the president to give Congress 30 days’ notice. Though, it seems unlikely that the Republican-led House and Senate will muster much objection.
Meanwhile, there’s still no date for the confirmation hearings for Dr. Mehmet Oz, the former television host nominated to lead the Centers for Medicare and Medicaid Services. Interestingly, 340B Report learned he was previously listed as a co-founder and chief strategy officer of a company called ZorroRx, which works with 340B hospital pharmacies (Oz’s son, Oliver, is still listed as a co-founder and head of medical affairs). It’s unclear whether this will come up during his confirmation hearings. Oz could also face scrutiny over his sizable stock investments with healthcare companies that do business with CMS.
View from the states
Legislative activity during the first weeks of the new year suggests there is still robust momentum at the state level to protect 340B and fight the drug industry’s strong-arm tactics. Lawmakers in a number of states, including Colorado, Hawaii, Nebraska, Oregon and others, have introduced bills early in the year to prohibit restrictions on 340B contract pharmacies — or, in the case of Nebraska and New York, reintroduced measures that languished in the last session.
But there’s backlash, too. Indiana Gov. Mike Braun, newly elected after serving a single term in the U.S. Senate, ordered the state’s health department to investigate the eligibility of covered entities’ offsite facilities and prevalence of Medicaid duplicate discounts.
The same day, three Republican Hoosier lawmakers introduced legislation that would require covered entities to pass all 340B savings to patients rather than using them to fund safety net health services. Legislation introduced in the Missouri General Assembly proposes to do the same.
Also, Building America’s Future, the group that Katie Miller led, plans to release a 30-second ad alleging that the program “subsidizes healthcare for illegal aliens and gender transitions for kids” in four states considering 340B contract pharmacy protections. It’d be laughable, if the stakes weren’t so high.
Meanwhile, Big Pharma in December scored its first wins in its ongoing legal battles against the eight states that have enacted 340B contract pharmacy protection laws:
- First, as reported by 340B Report, Kansas Attorney General Kris Kobach got three drugmakers and the Pharmaceutical Researchers and Manufacturers of America (PhRMA) to drop their lawsuits against the state after declaring that the state’s law did not prohibit or restrict manufacturers from doing anything with pharmacies contracted with 340B entities. The law, passed in 2024 as part of an appropriations bill, expires on June 30, 2026 and may now never be enforced. It’s a highly fishy development, and it remains to be seen whether Kobach’s interpretation can or will face a legal challenge. Review the statute for yourself here.
- Then, a federal judge barred West Virginia from enforcing its law while three drug-industry lawsuits are pending — a temporary victory, at least, for PhRMA, AbbVie and Novartis.
- In response to these developments, Sanofi has restored its contract pharmacy restrictions in both states.
340B in NYT
The New York Times published two deep-dive stories that crossed paths with 340B.
- The first heaped scrutiny on Apexus, the 340B prime vendor, and its role as a “little-known middleman” that has “worked behind the scenes to supercharge the program” and generate big profits for itself. In response, Apexus said it has done nothing wrong. “HRSA regularly audits Apexus to confirm our compliance with all prime vendor requirements and deliverables,” the company said. “In Apexus’ time as the 340B prime vendor, we have rigorously complied with all legal and contractual obligations contained in the agreement with HRSA. We are proud of the role Apexus plays as the 340B prime vendor and how our work continues to deliver value to all 340B stakeholders.”
- The other story was about how drug discounts, spurred by the COVID-era American Rescue Plan that went into effect last year, have inadvertently increased the cost of many drugs for 340B entities and their patients.
I’ll note that the Times has been requesting lots of documents from HRSA under the Freedom of Information Act. So there are likely more unflattering 340B stories to come.
IRA price negotiations
It probably says something that we’ve gotten this far into our monthly installment without mentioning that the Biden administration, in its waning hours, released the list of the next 15 drugs subject to Medicare Part D price negotiations. The list includes top-selling GLP-1 drugs like Wegovy and Ozempic, which have become wildly popular as weight-loss medications.
Combined with the first 10 drugs selected for price negotiations, the drugs represent more than a third of Part D spending on prescription medications, CMS says.
The takeaway
The year is still young and there are many new members in Congress. This is the time for safety net healthcare providers to bend their ears about the positive benefits of 340B and advocate for a program that costs taxpayers nothing, supports vital safety net healthcare services and provides hospitals with a critical financial lifeline.
The stakes are high. It’s time to join the fight.
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