By Ted Slafsky
The 340B provider community was rocked two years ago by the announcement of an alliance between the nation’s largest and most powerful drug industry association and the largest national organization that represents community health centers.
Pharmaceutical Research and Manufacturers of America (PhRMA) and the National Association of Community Health Centers (NACHC) joined forces in March 2023, forming ASAP 340B to “ensure the 340B program supports true safety-net providers and the communities they serve.” At the time, ASAP 340B said PhRMA had agreed to compromise on key areas, including on the role of contract pharmacies.
The emergence of the “strange bedfellows” alliance created the first fracture in the 340B Coalition, an umbrella group of national trade associations representing providers that participate in the 340B program.
Personally, this was a painful development as I had played a key role in creating the 340B Coalition three decades ago and understood the importance of 340B advocates uniting when it comes to protecting and advocating for the 340B program. Regardless of whether it’s a large health system saving tens of millions of dollars through 340B, or a small health center or rural hospital with a fraction of the savings and budget, the program is vitally important to all eligible covered entities.
As I have said before, I could understand NACHC’s frustration with the lack of progress in resolving the contract pharmacy impasse when it formed its alliance with PhRMA. I agreed with NACHC that the various national hospital groups’ strategy to rely almost exclusively on the government and the courts to stop the drug industry’s contract pharmacy restrictions was too narrowly focused. But the decision to align with Washington D.C.’s pharmaceutical industry powerhouse was disconcerting and, one could argue, counterproductive.
Important Findings from New Report
A new 340B Report analysis raises questions about whether NACHC is really benefiting from the controversial alliance.
The analysis found the following:
Support for Bill that Would Have Had Devastating Consequences
To make matters worse, ASAP 340B played a key role in drafting the 340B ACCESS Act, a bill which three influential House Republicans introduced in May 2024 that would have made radical changes to the 340B program. The ACCESS Act would have codified certain uses of some contract pharmacies, but added restrictions that 340B advocates warned would push many retail pharmacies out of the program. It also would have overridden any state laws with broader contract pharmacy protections.
Hospital groups argued the bill would remove 75% of urban disproportionate share hospitals (DSH) from the program since it would prohibit most DSH hospitals from accessing 340B discounts on insured patients. They also contended it would narrow the patient definition and made other changes that would have greatly reduced the program’s value.
340B provider organizations, including the Advocates for Community Health, a new group which represents larger health centers, roundly criticized the bill.
Low-Ball Tactics
Providers, including the health center community, have also taken issue with what’s widely perceived as a drug industry-funded campaign in which conservative dark money group Building America’s Future (BAF) has sought to tie the 340B program to hot-button cultural issues, such as immigration, abortion and transgender care. BAF and a political action committee it funds—Stand for Us PAC—have close ties to the Trump administration and the Trump campaign. They’ve utilized reprehensible tactics in GOP-led states to try to scare Republican voters and lawmakers. Meanwhile, in Democrat-controlled states, the drug industry has used astro-turf organizations to try to block contract pharmacy protections.
PhRMA has denied contributing to BAF. But since the dark money group does not disclose its funders—and any such contributions could go through a third party—we will never know how the group received its funding. It is reasonable to presume that someone with ties to the drug industry has been and continues to fund their efforts.
Recent Work of ASAP 340B
NACHC has recently shown signs of public distancing from PhRMA, including backing off its support for certain elements of the ACCESS Act. In addition, NACHC returned as a host of the 340B Coalition’s Summer Conference after not attending for the past few years.
However, NACHC remains an ASAP 340B member and is listed as a “founding partner” on the alliance’s website. ASAP 340B is continuing to spend heavily on lobbying Congress, speak at conferences and utilize social media to raise concerns with the program and call for reform.
For example, when Health and Human Services Secretary Robert F. Kennedy Jr. was recently asked about 340B during a congressional hearing, the secretary criticized the program’s growth and argued that patients “seldom get the benefits of the drug reduction”—messaging that the drug industry often uses. While Kennedy praised the program’s importance, particularly to rural hospitals, it was not exactly a ringing endorsement. And he failed to recognize that the 340B program is not only benefitting patients in a variety of ways, but every expansion of the program has also occurred due to bipartisan congressional action.
So, who was out there publicly touting Kennedy’s comments? ASAP 340B praised the secretary on social media. The alliance has also consistently praised U.S. Sen. Bill Cassidy (R-La.), who is one of the Congress’ biggest 340B critics. Cassidy previously launched an investigation into the 340B program, targeting multiple providers including two large and highly respected health centers.
Status of the Partnership
When asked whether it’s still an ASAP 340B member, NACHC’s Vice President of Communications Amy Simmons said:
“For decades, the 340B program has allowed community health centers and other safety net providers to expand access to affordable medications and services for the most underserved communities. Federal legislation that strengthens the 340B program is an absolute necessity and can only be achieved through a deliberate process that brings together diverse stakeholders towards a common goal. NACHC remains committed to exploring all avenues with solutions-oriented stakeholders to strengthen the 340B program.”
NACHC’s decision to align with PhRMA brings to mind a famous saying from President Ronald Reagan during his negotiations with the Soviet Union: “Trust, but verify.” NACHC was naïve to think that the drug industry—which is well-known for its bare knuckles and sometimes deceptive and ugly tactics—could be trusted as a partner in the fight to preserve the 340B program.
It is time for NACHC to end its membership in the alliance. Until this happens, the other 340B provider groups have a good reason to ask: “How can you trust NACHC when it comes to 340B advocacy and strategy?”
Ted Slafsky is the Publisher and CEO of 340B Report, the only news and intelligence service exclusively covering the 340B program. Slafsky, who has over 25 years of leadership experience with the 340B program, is also Founder and Principal of Wexford Solutions.
Ted can be reached at ted.slafsky@340Breport.com.
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.
