Subscribe
Share
Share
Embed
340B Insight provides members and supporters of 340B Health with timely updates and discussions about the 340B drug pricing program. The podcast helps listeners stay current with and learn more about 340B to help them serve their patients and communities and remain compliant. We publish new episodes twice a month, with news reports and in-depth interviews with leading health care practitioners, policy and legal experts, public policymakers, and our expert staff.
Narration (00:04)
Welcome to 340B Insight from 340B Health.
David Glendinning (00:12)
Hello from Washington DC and welcome back to 340B Insight, the podcast about the 340B drug pricing program. I'm your host David Glendenning with 340B Health. Our guest today is Tom O'Donnell, Senior Vice President of Government Relations here at 340B Health. One of the many responsibilities that Tom and his GR team have is keeping on top of and engaged with state legislative activity on 340B.
2025 has been another big year for state bills and laws affecting 340B. So this is a good time to discuss what has been happening outside of Washington, D.C. But first, let's do a quick recap of some of the latest news about 340B.
The Health Resources and Services Administration has approved Novartis's pilot program proposal to implement 340B rebates for its drug and Tresto to take effect April 1st, 2026. Eight other drug companies previously received HRSA approval for their rebate plans, which will take effect January 1st, 2026. Beacon, the vendor for those eight other drug companies, also will administer Novartis's rebate plan.
340B health members can visit the show notes to learn more about how the government and the drug makers expect this pilot program to operate. And the Centers for Medicare and Medicaid Services has finalized plans to conduct a drug acquisition cost survey of hospitals that is expected to lead to Medicare payment cuts for 340B drugs. CMS will conduct the survey from January 1st to March 31st, 2026, using an online portal
for hospital submissions of drug acquisition costs. The agency states it intends to collect and analyze the data in time to help determine Medicare Part B drug payment rates starting in 2027. Any 340B drug payment cuts would be budget neutral, requiring redistribution of the savings through increased payments for other items and services to all OPPS hospitals, including non-340B hospitals.
See the show notes for more details.
And now for our feature interview with Tom O'Donnell. Tom's team has had a busy year so far staying apprised of state legislative developments on 340B. And I recently sat down with him to find out what the states have been up to. Here's that conversation. I'm here with Tom O'Donnell, our very own senior vice president of government relations right here at 340B Health. Tom, you've been on the show before, but as an interviewer,
and not in the hot seat, so to speak. So I will say welcome back to 340B Insight.
Tom O'Donnell (03:20)
Thank
you, David. Looking forward to it.
David Glendinning (03:22)
Tom, when you and I talk shop in the office, it is usually about what's happening down the street on Capitol Hill. But of course, there are 50 state capitals as well. And many of those states also get into 340B legislative business. We covered a significant amount of state activity on 340B last year. if you could, how would you summarize what has happened so far in 2025?
Tom O'Donnell (03:50)
So David, we've just seen an awful lot happening this year, you know, in the states on 340B. On the positive side, a lot of progress on contract pharmacy statutes and laws. So over 20 states now with laws on the book to protect 340B from manufacturer restrictions. But on the other hand, you know, we've seen a lot more activity on state reporting requirements.
And as we've seen more action on contract pharmacy reporting provisions being brought into those legislation things called combination bills. So the big picture, we see more activity on reporting towards the end of the year, and we expect to see more activity in 2026.
David Glendinning (04:30)
Okay. And I will stress, as I sometimes do, that what we're speaking about today is up to date as of today. I know many state legislative sessions are done, but I believe there's still a few in session. So it's possible we could see some late updates as the year wraps up. Let's start with those reporting mandates that you referenced. What kind of movement have we seen on that front in 2025?
Tom O'Donnell (04:55)
Yeah, so David, know, seven states total have enacted new reporting laws. So that's Colorado, Hawaii, Idaho, Indiana, Ohio, Rhode Island, and Vermont. And those, that's in addition to those three original states that enacted laws in 2023, Minnesota, Washington, and Maine. So we now have 10 states total that have laws in the books that mandate some form of reporting. And we're seeing David more and more than Minnesota is one of those
state laws are being followed by other states.
David Glendinning (05:28)
Okay, so Minnesota as a model for other states, we've devoted a couple of past episodes to that reporting law in Minnesota and the effects it has had. So what does that influence of that first reporting law that was on the books in the states, how is that starting to appear in these new state laws that you're talking about?
Tom O'Donnell (05:49)
I think there's just specific parts of the law that we're seeing more and more in state legislation and state enacted laws here. So, know, for one aggregated three, four be drug acquisition costs, you know, looking for data on reimbursement received payments to contract pharmacies into TPAs and then, you know, payer type recording. So we'll have specific payer requirements for commercial Medicare and Medicaid. One of the reasons I think this has happened, it was
You know, the Minnesota law was one of first to result in actual report being generated. So this 2024 report has been used by, I think, more more states to show what they could do with the Minnesota.
David Glendinning (06:31)
And you've mentioned that we've also seen bills that ⁓ combine those three, four to be protections, the contract pharmacy protections with new reporting mandates. I suppose we could call those hybrid or combination bills. What's going on with those?
Tom O'Donnell (06:47)
Yeah, it is something we're seeing more and more of. you know, specifically this year we saw Colorado, Hawaii, Vermont, Maine, Rhode Island pass those laws. Look, I think part of it's just a political process. In negotiations, you've seen people want to get something, they have to give something. And often legislators have been saying, you know, you're going to come and ask us for contract pharmacy protections, we need more reporting from hospitals and, you know, other covered entities.
So we are seeing that. But you know, look, it's not just that. We do have our members actually working on bills, introducing bills that have reporting and requirements already baked into them, knowing that's the cost of getting legislation passed. I think one of the big things we should keep an eye on here is that we're also seeing states that had passed initial reporting laws, including new requirements. know, Maine had passed a law that was...
very much based on the American Hospital Association's stewardship principles. I think from our perspective, that was a law that probably drew a better picture of how 340B is actually used. But after Maine had done that in 2023, they came back and our members were working on contract pharmacy and also PBM and discrimination legislation. And when they came to the final...
hopefully trying to close out that legislation. Legislators in the final hour asked them to include reporting requirements, some of which reflect the Minnesota law. So I think it's not just that we're seeing the contract pharmacy, you these combination bills, but you're also seeing original statutes now being amended further that are going to include provisions that we have some very serious concerns about.
David Glendinning (08:30)
Many of the states, as I mentioned, have wrapped up legislative business for 2025 and are looking ahead, I suppose. What about the few states that sort of operate throughout the year that might still be in session? Where are we seeing active 340B proposals right now?
Tom O'Donnell (08:50)
There's a few left. California is still in session. Michigan, Massachusetts. I think for us, particularly though, it looks like Michigan is where we might still see something happen by the end of the year. And look, we only have a few weeks left, but there is a Michigan bill that did come out of the Michigan House recently introduced that includes contract pharmacy protections, but also adds reporting requirements for hospitals. Some along the line of what we saw in Minnesota.
Unfortunately, also including a use restriction. So specifically saying that 340B savings could only happen for patient services and community benefits. And look, that would eliminate the ability to use 340B for necessary capital improvements. So we're working with our members in Michigan and the Michigan Hospital Association, like we do in other states, to help hopefully address these issues, get a bill that's hopefully at end of the day better for members. As you can see,
Sometimes it's just not the reporting requirements. If we have use requirements, really pretty significant ⁓ obstacles to our members being able to use free-for-all things.
David Glendinning (09:57)
Like to go back to Minnesota for a second, since you had mentioned this is an inspiration and a template for other states potentially. When Minnesota implemented reporting and a couple of states closely followed suit, it raised concerns for many of the hospitals we represent here at 340B Health. So what trends are we seeing in this latest round of reporting bills that might be of concern to covered entities?
Tom O'Donnell (10:24)
Some of the things I covered already, but definitely breakdown by payer type. So that type reporting, which I think is a great concern. There's definitely a focus on contract pharmacy and third party administrators. Then really getting down to that national drug code level data detail on, let's say the 50 most used drugs. So those are all things we're really following. And of course, as I mentioned before, anything we're trying to keep an eye out for any type of use restrictions.
We did have Colorado pass some that I think may be very difficult to implement, but I think that we have to continue to keep a close eye on that in the next session going to 2026 in these states.
David Glendinning (11:07)
And speaking of going into 2026, I know we're already hearing about state legislatures going through their pre filing processes for legislation for next year and plans for new or reintroduced 340 B bills are already popping up there. So it sounds like 2026 could potentially be even busier. So what should we expect to see next year?
Tom O'Donnell (11:31)
still going to be very active. Pharma and the drug manufacturers invest a lot of money in the state advocacy. It could be communications campaigns. It could be direct lobbying in the states. We are seeing some model legislation. There's a group called the American Legislative Exchange ⁓ Committee, which is a group of voluntary group legislators and also private industry. It tends to be more of a free market based type of organization here.
They have model legislation and a lot of it does reflect some of those pharma reform proposals we've seen in the past. So I think, you know, look, we're going to see still a lot of states working on that. We expect to see more communications efforts here. But I think if you look back at how many states passed the laws last year, seven, it really is kind of showing you the level of interest in the potential level of success they could have next year.
David Glendinning (12:28)
You mentioned the American Legislative Exchange Council. So ALEC for short, yet another acronym we deal with on regular basis around here. How significant do you see the ALEC 340B model bill being for the upcoming legislative cycle in the states?
Tom O'Donnell (12:46)
I just think it's another step in just how the pharma companies have put more focus on this. I wouldn't say it's necessarily really a departure because we've seen a lot of these proposals before, but it's, is just not the pharma companies and private industry. is these like-minded free market legislators. So I think you can definitely see that those type of policymakers could take this kind of proposal and run with it.
David Glendinning (13:17)
We are always very focused on how all of this lawmaking ends up landing on our member hospitals and on the broader 340B community. So what are we hearing lately from hospitals about the impact of these new reporting mandates, some of the new laws that have come out this past year?
Tom O'Donnell (13:37)
You know, I think it always comes down, David, to that concern about the administrative burden and costs for our hospitals. If you think about what they've been seeing with the contract pharmacy restrictions and what they've had to go through and report in DSP, it kind of informs a lot of the concerns about additional reporting. Again, know, administrative burden, having to add staff, buy new software to comply with these things.
And of course, if you see the ongoing or the new challenges we're going to see with the rebate model. So I think it's always first and foremost that. think what we've talked about our members understand as well and why they're very concerned is just the opportunity to misinterpret the data here. If you look back at Minnesota and how they really focus the information on hospitals, how hospitals use 340B, but not really talking about the uncompensated and undercompensated costs of hospitals occur.
Again, it just allows for this distortion that we're afraid manufacturers, others can use to possibly in the future pass legislation to restrict 340B. So while there's that immediate concern about administrative burden and the costs of all these new requirements, it also comes down to where this could lead policymakers to go with 340B.
David Glendinning (14:57)
Tom, know you and your team do more than just keep an eye on the bills that might be making their way through state houses throughout the U.S. So what is 340B Health doing to support hospitals that are facing this latest wave of reporting and transparency legislation?
Tom O'Donnell (15:15)
I think there's a number of ways we try to help members, David. I mean, one is, you know, we're a resource center here, so providing talking points, legislative summaries, know, resources our members can use when they're in the trenches here, seeing new legislation, how they can fight back. State legislative action is pretty much real time. Things happen and move very quickly. you know, having those resources ready to allow members to respond is really quite critical.
We also work hand in hand with our members and the state hospital association. So whether it's strategic advice, going in and trying to help answer their policy concerns, doing bill analysis, that's all part-parts with what we do. I think what I really enjoy personally, and I think it's super useful though, is looking at how we coordinate and collaborate. So we always offer to our members and we do outreach specifically to the state hospital association to say, how can we help you?
How can we work with you? It may involve bringing in the communications team, or it may be us just looking and connecting members from different states. There's maybe a state before that's seen similar challenges. I think everybody knows the Farm Music community has always been great about helping each other, which is a real strength here. So I think that's been part of our function is coordinating, collaborating, and helping like-minded individuals together to assist them in meeting these challenges.
David Glendinning (16:40)
I will say thanks to you and the team for all that work on top of everything you're doing at the federal level as well. I appreciate you also taking the time to give us a snapshot of where we are in the states and what might be coming down the road in 2026. I'm sure we'll be checking back with you before too long on some of these issues. But in the meantime, I appreciate you being here.
Tom O'Donnell
Thank you, David.
David Glendinning
Our thanks again to Tom O'Donnell for giving us the state briefing for 2025 and the state preview for 2026. If you are a 340B health member, please be sure to reach out to Tom if you have any questions or insights about legislative activity that might be going on in your state. And be sure to sign up for the 340B coalition winter conference if you have not done so already, as that will provide a great opportunity to connect with your peers on all these developments.
You can register at 340bwinterconference.org. We will be back in a few weeks with our next episode. As always, thanks for listening and be well.
Narration (17:46)
Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on Twitter @ 340B Health and submit a question or idea to the show by emailing us at podcast@340bhealth.org.