December 10, 2014—The chairman of the House Energy & Commerce Health Subcommittee asked during a hearing yesterday whether the 340B program should be re-evaluated.[ms-protect-content id=”2799″]
Rep. Joseph Pitts (R-Pa.) broached the subject during a session on how Medicare and Medicaid spending might be reined in during the next session of Congress when the Senate shifts to Republican control. The full E&C committee has primary jurisdiction over 340B in the House.
The Department of Health and Human Services Inspector General, the Government Accountability Office, “and a broad coalition of stakeholders have identified structural and systemic concerns with the 340B program,” Rep. Pitts said. “Research suggests that the program’s discounts may be going to hospitals that do not disproportionally serve Medicaid or the uninsured. Other analysis suggests that the discounts are not passed on to the low-income individuals for whom the program was designed.”
“Given these concerns and with more people enrolled in health coverage through the [Affordable Care Act], isn’t it time for a complete re-evaluation of the 340B program?” he asked one of the witness, Chris Holt of the American Action Forum, which describes itself as a center-right think tank. “Also, if the 340B program was more targeted, would that free up more drug industry dollars for additional research and development and lifesaving cures and life enhancing therapies?”
Holt said he agreed, adding that all federal health care programs “that were intended to subsidize uncompensated and undercompensated care” ought to be re-evaluated. “Today … we have hospitals like Johns Hopkins that benefit from 340B dramatically, because of the locality they are in, not necessarily their financial standing.”
In response to a request for comment on being cited during the hearing, Johns Hopkins Medicine said, “The Johns Hopkins Hospital was founded on ideals of philanthropy and good citizenship. Our mission extends beyond our buildings and direct services to encompass the well-being of the communities we serve. Year after year, Johns Hopkins Hospital, the Johns Hopkins Bayview Medical Center, and All Children’s Hospital see larger numbers of patients who are uninsured, underinsured and unable to pay for their care. Thanks in large part to the savings generated by the 340B drug pricing program, the Johns Hopkins family of hospitals has been able to meet patients’ needs.”
Safety Net Hospitals for Pharmaceutical Access, which represents more than 1,000 hospitals that participate in 340B, said in a statement that “the 340B program is working as Congress intended and is more critical now than ever before. More than 30 million Americans remain uninsured even after the Affordable Care Act. 340B is essential to keeping the neediest in our communities healthy.”
Earlier during the hearing, Rep. John Shimkus (R-Ill.) asked witness Mark Miller, the executive director of the Medicare Payment Advisory Committee, if he had ideas on how to “realize savings in Medicare at it relates to the 340B program.” During MedPAC’s November meeting, staff members briefed commissioners about a paper on the 340B program that the staff prepared at the request of members of the Energy & Commerce committee and other members of Congress.
Miller prefaced his answer by observing that the 340B program is “beyond” MedPAC’s jurisdiction. “We were kind of asked to paint a picture” of 340B, he said, “and now we’ll give that to you and you guys will do what you do.”
One thing the staff noted for the commissioners in the paper, he said, is that “if the hospital realizes a discount on the 340B, then there is some difference between at what that hospital acquired that drug at and what Medicare is paying at, and Medicare does not follow that.”
“And that’s as far as we have gotten,” Miller added. “We’ve put that in front of the commission, but I don’t have much more to say about it.”
Subcommittee chairman Pitts is one of five lawmakers who have asked the GAO to conduct a second major study of the 340B program. The first came in September 2011. The new report is expected to address 340B and non-340B hospitals’ sources of revenues and margins and how they have changed over time, and 340B and non-340B hospitals’ Medicare Part B drug reimbursements and how those have evolved.
The HHS Inspector General is working on a study to determine whether Medicare Part B spending could be reduced if Medicare were able to share in the savings for 340B-purchased drugs.[/ms-protect-content]