Health Headlines: April 2025

The Senate Committee on Health, Education, Labor and Pensions (HELP) released the report “Congress Must Act to Bring Needed Reforms to the 340B Drug Pricing Program.” The report details responses from various stakeholders in the 340B program: two hospitals (Bon Secours Mercy Health and the Cleveland Clinic), two federally qualified health centers (Sun River Health and Yakima Valley Farm Workers Clinic), two contract pharmacies (CVS and Walgreens), and two pharmaceutical manufacturers (Amgen and Eli Lilly). Johnson & Johnson also voluntarily submitted information to the report. The report highlights the hundreds of millions of dollars of savings and revenue generated by 340B “covered entities” (savings that often are not directly passed on to patients), the prevalence and fees paid to contract pharmacies, and manufacturer concerns with transparency to ensure 340B program integrity. The report concludes by urging Congress to pass reforms in an effort to improve transparency and recommends the following actions:

1. Require covered entities to provide detailed annual reporting on how 340B revenue is used to ensure direct savings for patients, providing a more transparent link between program savings and patient benefit
2. Address potential logistical challenges, caused by increased administrative complexity, that lead to burdens that may impede patient benefit from the program
3. Investigate the types of financial benefits contract pharmacies and third-party administrators (TPAs) receive for administering the 340B Program to ensure that rising fees do not disadvantage covered entities and patients
4. Require transparency and data reporting for entities supporting participants in the 340B Program (i.e., contract pharmacies and TPAs)
5. Provide clear guidelines to ensure that manufacturer discounts actually benefit 340B-eligible patients, including examining legislative changes to the definition of “eligible patient” and contract pharmacies’ use of the inventory replenishment model

A copy of the report can be found here.

On April 16, Arkansas Governor Sarah Huckabee Sanders signed H.B. 1150 into law, making Arkansas the first state to prohibit pharmacy benefit managers (PBM) from owning or operating pharmacies within the state. The bill will go into effect on Jan. 1, 2026. A federal bill prohibiting PBM ownership of pharmacies, S. 5503, was introduced on Dec. 12, 2024, and similar bills to the Arkansas law have been introduced in other states, including New York and Texas. In addition, on April 14, 39 state attorneys general sent a letter to congressional leaders urging them to pass a federal ban on PBM ownership of pharmacies.

The full text of H.B. 1150 can be found here. A copy of S. 5503 can be found here. A copy of the letter from the state attorneys general can be found here.

On April 21, President Trump signed an executive order seeking to lower the cost of prescription drugs. Much of the executive order is aspirational and will require congressional action to accomplish. Key aspects of the executive order include:

1. Seeking comment on guidance for the Medicare Drug Price Negotiation Program, started under the Biden administration, to improve transparency of the program, prioritize medications with high costs to Medicare, and minimize negative impacts on drug development and innovation
2. Providing recommendations to accelerate approval of generics and biosimilars as well as improve the process through which prescription drugs can be reclassified as over-the-counter medications
3. Improving the FDA’s Importation Program to allow states to obtain approval to import drugs from other countries
4. Proposing regulations on a “site neutral” plan to standardize Medicare payments for prescription medications to ensure there are no incentives to shift drug administration volume to more costly sites of service
5. Conditioning grants to community health centers on the health center’s making insulin and injectable epinephrine available at or below the discounted price under the 340B Prescription Drug Program to certain individuals with low incomes
6. Proposing regulations aimed at improving transparency of compensation received by pharmacy benefit managers

The full text of the executive order can be found here.

On April 10, the Centers for Medicare & Medicaid Services (CMS) announced that it would stop providing matching federal funds for state expenditures for Designated State Health Programs (DSHP) and Designated State Investment Programs (DSIP) that are either available through other federal or state programs or not directly tied to healthcare services. DSHP and DSIP are public health programs that would not have qualified for matching federal funds under Medicaid but that have been approved as experimental, pilot, or demonstration projects by CMS under its waiver authority. Generally, states have used DSHP and DSIP to address social and economic needs that affect an individual’s ability to maintain their health, such as food and housing security, education, and workforce training. Twenty-five states currently have programs that appear to fall under the new policy.

A copy of the CMS press release can be found here.

On April 2, Senate Bill S. 1261, the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for Health Act, was reintroduced. The bill would expand patient access to telehealth services through Medicare and make permanent the telehealth flexibilities enacted in response to the COVID-19 pandemic that are currently set to expire on Sept. 30. Specifically, the law would:

1. Permanently remove all geographic restrictions on telehealth services and expand originating sites to the location of the patient, including homes
2. Permanently allow health centers and rural health clinics to provide telehealth services
3. Allow more eligible healthcare professionals to utilize telehealth services
4. Remove unnecessary in-person visit requirements for mental health services via telehealth
5. Allow for the waiver of telehealth restrictions during public health emergencies

The bill is sponsored or co-sponsored by 60 senators and has wide industry support.

The full text of the bill can be found here.