LUGPA Policy Brief – SECURE 340B Act

July 2026 

At-a-Glance

Legislation: Strengthening the Exercise of Controls and Upgrading Requirements for Efficiency in the 340B Act (SECURE 340B Act)

Status: Recently introduced in the House of Representatives and referred to committee. The bill represents one of the most comprehensive bipartisan efforts to reform the 340B Drug Pricing Program in years.

Purpose: Modernizes the 340B Program by strengthening program integrity, clarifying patient eligibility, increasing transparency, improving oversight of contract pharmacies and child sites, and ensuring 340B discounts are directed to providers serving vulnerable and underserved patients.

LUGPA Position: Supports. The legislation advances many of LUGPA's long-standing priorities by addressing program weaknesses that have contributed to hospital consolidation, market distortions, and competitive disadvantages for independent physician practices while preserving the program's safety-net mission.

What the Bill Would Do

The SECURE 340B Act establishes stronger guardrails throughout the 340B Program while maintaining support for legitimate safety-net providers.

Clarifies Patient Eligibility

The bill establishes a uniform federal patient definition requiring:

• A documented outpatient encounter with the covered entity within the previous 24 months.
• A legitimate provider-patient relationship supported by medical records.
• Clinical oversight from a qualified provider affiliated with the covered entity.
• Documentation showing the covered entity remains responsible for the patient's care.

These standards are intended to reduce inappropriate use of discounted drugs for patients with only limited connections to a covered entity.

Strengthens Contract Pharmacy Oversight

The legislation would:

• Expand reporting and compliance requirements.
• Strengthen safeguards against diversion and duplicate discounts.
• Clarify when contract pharmacies may dispense 340B drugs.
• Increase HRSA oversight and auditing authority.

Tightens Child Site Eligibility

The bill establishes stronger eligibility standards for off-campus clinics and affiliated facilities to help ensure child sites receiving 340B discounts are serving vulnerable patient populations.

Improves Transparency and Program Integrity

The legislation would:

• Expand reporting requirements for covered entities.
• Strengthen HRSA auditing and enforcement authority.
• Increase data collection on program utilization.
• Prohibit discriminatory contracting and other abusive practices.
• Provide additional resources for program oversight.

Provides Limited Referral Flexibility

The bill permits carefully defined referral arrangements for certain safety-net providers, including Federally Qualified Health Centers (FQHCs) and Critical Access Hospitals (CAHs), subject to documentation and compliance requirements.

Requires Additional Studies

Federal agencies would evaluate implementation of the reforms and report to Congress on program integrity and effectiveness.

Why It Matters

Congress created the 340B Drug Pricing Program in 1992 to help safety-net providers stretch limited resources and improve care for uninsured and low-income patients. As the program has expanded, however, concerns have grown regarding transparency, oversight, and its impact on healthcare competition.

LUGPA has consistently raised concerns that the current program has:

• Enabled some hospital systems to use 340B revenue to support physician practice acquisitions.
• Allowed broad patient eligibility standards that extend beyond the program's original intent.
• Seen rapid growth in contract pharmacy arrangements and child sites with limited oversight.
• Created competitive advantages for hospital-owned practices providing physician-administered specialty care.

These trends have contributed to increased healthcare consolidation and placed additional competitive pressure on independent physician practices.

Impact on LUGPA Members

Potential Benefits

For independent urology practices, the legislation could:

• Reduce incentives for hospital acquisition of physician practices.
• Promote a more level competitive environment.
• Increase transparency into how 340B savings are generated and used.
• Better align the program with its original safety-net mission.
• Complement LUGPA's broader advocacy on site-neutral payment, physician reimbursement, and healthcare competition.

Considerations

The legislation would not expand 340B eligibility to most independent physician practices. As a result:

• Independent urology groups generally would remain outside the program.
• Most new compliance requirements would apply to covered entities rather than independent practices.
• LUGPA will continue advocating for reforms that recognize the important role independent specialty practices play in caring for underserved and medically complex patients.

LUGPA Position

LUGPA strongly supports the SECURE 340B Act because it advances meaningful reforms that strengthen program integrity while preserving support for legitimate safety-net providers.

By establishing clearer patient eligibility standards, strengthening oversight of contract pharmacies and child sites, increasing transparency, and enhancing accountability, the legislation addresses many of the structural issues that have contributed to market consolidation and competitive inequities affecting independent physician practices.

LUGPA will continue working with Congress and federal policymakers to support thoughtful 340B reforms while advancing policies that preserve physician independence, promote fair competition, and ensure healthcare resources are directed toward improving patient access and care for vulnerable populations.