Understanding 340B Regulatory and Legislative Policy Efforts

Research evidence excerpt

TD Securities (USA) LLC

POLICY NOTE

September 8, 2026

■ WRG Health Care

Understanding 340B Regulatory and

Legislative Policy Efforts

Molly T. Turco

THE TD COWEN INSIGHT

There is bipartisan agreement in DC that the 340B program is broken and should be reformed,

and bipartisan policy drafting is underway in the House and Senate, though passage is

unlikely in the short term. The Trump administration is also active in this space and is enacting

a HRSA pilot in January and impactful CMS 2027 proposed policy changes that are likely to be

finalized in November.

What Is Happening?

The 340b program was created to improve access to outpatient meds at safety net hospitals

via discounted prices from manufacturers. The program has ballooned and concerns

intensified, resulting in longstanding bipartisan calls for major reform since last tweaks were

made in the ACA. This summer there has been increased policy action, including: 1) CMS

proposed OPPS rule; 2) HRSA pilot program; 3) bills: Senate "Gang of Six" bipartisan SUSTAIN

340B Act; House bipartisan SECURE 340B Act; Sen. Cassidy's 340B for Patients Act.

Our View

The greatest likelihood of reform in the next 24 mos is administrative, via the HRSA pilot

program starting Jan 2027 and the CMS CY27 Hospital Outpatient payment (OPPS), which

is likely to be finalized as proposed in early Nov at ASP -33.4%. The OPPS change is actually

a lift for for-profit hospitals [HERE], impacts behavior re: contract pharmacies [HERE], and

impacts drugs [HERE].

Major legislative reforms are gaining momentum but unlikely to pass the next 24 mos due

to various factors, including lack of major healthcare vehicles and concern about harming

non-profit hospitals. We do not see a material difference in likelihood of major leg 340B

reform in the different mid-term scenarios.

Though short term success is unlikely, the in depth bipartisan policy development efforts

make leg reform in the longer term (3-5 yrs) feasible.

SUSTAIN and SECURE have some differences, like termination of the HRSA rebate model,

but are aligned on major issues, like addressing duplicate Medicaid/340B discounts via a

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