CMS Proposes to Cut Medicare 340B Drug Payments to ASP Minus 33.4% in 2027 Copy

The Senate HELP Committee discussion draft would define the 340B patient institute, codify contract pharmacy rights, let manufacturers elect rebates, and cap TPA and pharmacy fees. The Committee accepts comments through August 28, 2026.

On June 25, 2026, Senate HELP Committee Chairman Bill Cassidy released the 340B Drug Pricing Integrity and Affordability for Patients Act, a discussion draft that rewrites Section 340B of the Public Health Service Act across twelve sections. The draft caps a multi-year record: a committee report on how covered entities use 340B revenue, a full committee hearing, and an ongoing investigation of the Prime Vendor Program. The Committee cites $81 billion in 340B drug purchases for 2024 and notes that Congress has not reformed the program in 15 years. If you lead a covered entity, the core rules of your program are on the table, and the Committee is asking for your input now.

A rebate election that would invert your cash flow

Section 2 lets each manufacturer choose how you receive the 340B price: an upfront discount, a discount after claims submission to a new HHS claims repository, or a retrospective rebate. Under the rebate path, you pay full acquisition cost at the time of sale and wait for the manufacturer to pay undisputed claims after you submit them. The upfront path requires physically segregated inventory, which ends virtual replenishment as most entities practice it.

The draft offers you a way to keep the choice of mechanism, but it carries a price: you must pass the full discount through to patients at no more than the ceiling price plus a nominal dispensing fee. For a safety-net provider, that option surrenders the margin that funds clinical services. Model the cash-flow swing against your days cash on hand before you decide what to say about this section.

A statutory patient definition and a split between grantees and hospitals

Section 4 defines the 340B patient in statute for the first time: an outpatient service at the covered entity within the preceding two years, an auditable medical record, and a prescription from your practitioner or through a referral. Section 5 requires manufacturers to ship 340B drugs to compliant contract pharmacies, which addresses the unilateral restrictions grantees have faced since 2020. The same section caps hospital contract pharmacy networks and ties pharmacy locations to census-drawn service areas. Grantees keep uncapped networks and mail-order access unless they cross $1 billion in annual revenue or affiliate with a hospital.

Flat fees, transparency, and sliding scales

Section 9 bans percentage-of-savings pricing. Third-party administrators and contract pharmacies could charge only flat, fair-market-value fees, and the draft caps dispense fees at 125 percent of the pharmacy’s average commercial dispensing fee. Section 6 requires margin and charity care reporting, published by entity. Section 7 requires sliding fee scales with defined out-of-pocket caps for eligible patients.

One drafting detail matters more than any single provision: legislative counsel left several parameters in brackets, including the claim submission window and rebate payment timelines in Section 2. Brackets mark decisions committee staff have not made. Comments aimed at bracketed text reach questions that remain open.

What the Committee and the field are saying

“Clearly, there are real transparency and oversight concerns that prevent 340B from translating to better access and lower costs for patients. Congress needs to take action,” Cassidy said in the release.

Covered entity groups read the draft differently. Maureen Testoni, president and CEO of 340B Health, said the proposals would “profoundly alter 340B” and make it more difficult for safety-net hospitals to use the program to provide essential care to patients in need.

What you should do before August 28

The Committee accepts comments at 340bforpatients@help.senate.gov through August 28, 2026. Five steps between now and then:

• Read the draft and the section-by-section summary, and map every bracketed provision that touches your operations.

• Model the Section 2 rebate scenario against your monthly 340B volume and your days
  cash on hand.

• Count your contract pharmacies against the Section 5 limits and service-area rules.

• Inventory your TPA and pharmacy fees against the Section 9 caps.

• File your own letter, in proposed legislative text where you can, and pair every ask with your entity’s data on what 340B savings fund for patients.

Submit two to three weeks early. Staff read early letters closely and skim the pile that arrives at the deadline.

The bottom line

This is a discussion draft, not an introduced bill, and the discussion stage is where text still moves. As of July 2026, the rebate timelines, the effective dates, and the fee benchmarks all sit in brackets, and the Committee has asked stakeholders to fill them in. The entities that shape the next version will be the ones that answer the Committee’s questions with their own numbers.

Don’t wait for the deadline. Read the draft, run the numbers, and file a comment that gives staff something to build with. Reach out to MedMatrix Rx with questions or for assistance.

Sources

• Senate HELP Committee press release: Chairman Cassidy Unveils Landmark Discussion Draft to Fix 340B, June 25, 2026. https://www.help.senate.gov/rep/newsroom/press/chairman-cassidy-unveils-landmark-discussion-draft-to-fix-340b-lower-health-costs-for-american-patients-and-families

• 340B Drug Pricing Integrity and Affordability for Patients Act, discussion draft text. https://www.help.senate.gov/340b-drug-pricing-integrity-and-affordability-for-patients-act-discussion-draftpdf

• Section-by-section summary of the discussion draft. https://www.help.senate.gov/sxs-340b-drug-pricing-integrity-and-affordability-for-patients-act-discussion-draftpdf

• 340B Health statement responding to the discussion draft. https://www.340bhealth.org/newsroom/340b-health-responds-to-senator-cassidys-340b-discussion-draft/