On August 5, 2026, members of the Senate 340B Bipartisan Working Group released the first complete draft of the SUSTAIN 340B bill, a proposal that would make the most significant statutory changes to the 340B Drug Pricing Program in decades. Although the bill has not yet been formally introduced and its provisions may change during the legislative process, the draft offers an important look at the direction Congress may take in future 340B reform.

The draft bill would amend the 340B statute to address several longstanding issues, including:

• Establishing a statutory definition for “patient” under the 340B Program;
• Codifying covered entities’ authority to use contract pharmacies, subject to specific registration and audit requirements;
• Eliminating rebate models within one year and requiring the U.S. Department of Health and Human Services (HHS) to transition to a claims clearinghouse established by the bill;
• Requiring covered entities to report certain information regarding their use of 340B drugs;
• Requiring covered entities to provide patient financial assistance for patients with incomes at or below 200% of the federal poverty level;
• Prohibiting insurers from discriminating against covered entities or contract pharmacies in reimbursement based on 340B participation or acquisition costs;  
• Establishing user fees to support program administration, including operation of new clearinghouse.

Many of the concepts in the proposed legislation appear to adopt conditions under which federally qualified health centers (FQHCs) already operate. For example, FQHCs provide patient financial assistance for individuals at or below 200% of the federal poverty level as a condition of their Section 330 grants and may already have systems in place to extend financial assistance to prescription drugs. Likewise, FQHCs already have requirements to ensure program income is reinvested to further the purposes of their federal grant. 

Other provisions, including protecting contract pharmacy arrangements, establishing a claims clearinghouse, and reaffirming an up-front discount model rather than rebate, address issues that have been the subject of significant litigation, agency action, and policy debate in recent years.

Whether the legislation advances during the current Congress remains uncertain, particularly given the legislative calendar and election year dynamics. Even so, the release of a complete discussion draft marks an important milestone and is likely to shape future congressional negotiations over comprehensive 340B reform.

Feldesman’s attorneys will continue to monitor developments surrounding SUSTAIN 340B legislative and judicial developments. If you have any questions, please contact Steve Kuperberg.