February 13, 2013—A coalition representing drug manufacturers, pharmacy benefit managers, private practice oncologists, and independent pharmacies issued a report yesterday on hospital participation in the 340B drug discount program, arguing that hospitals have strayed from what the groups maintain is 340B’s purpose of helping the uninsured poor “gain better access to prescription medicines.”
Hospitals disputed that finding, saying in a statement that the program meets Congress’ intent of enabling safety-net providers to “stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”[ms-protect-content id=”2799″]
Congress, the executive branch, and investigatory agencies have made it clear that using 340B-discounted drugs for insured patients and billing third-party payers at normal rates is consistent with and necessary to advance that broader purpose, the hospitals said.
Hospitals also took strong exception to the coalition’s assertion that ways in which some hospitals use 340B may lead to “potentially harmful consequences for patients.”
“We are deeply dismayed that the report includes unfounded insinuations that some hospitals are putting patients in harm’s way to maximize 340B savings,” said Safety Net Hospitals for Pharmaceutical Access (SNHPA), which represents 340B hospitals. “This is an affront to the integrity of safety-net caregivers across the country.”
Yesterday’s report was issued by the drug industry trade groups Pharmaceutical Research and Manufacturers of America and the Biotechnology Industry Organization; the private practice oncologist group Community Oncology Alliance; the independent pharmacy group National Community Pharmacists Association, the drug company-funded National Patient Advocate Foundation; and the PBM group Pharmaceutical Care Management Association.
The report was published on the same day as a New York Times article that explores the division between drug companies and hospitals over 340B’s purpose.
The report also comes as (1) a group of Republican members of Congress continue an inquiry into 340B; (2) just days after the Health Resources and Services Administration (HRSA) issued guidance on 340B hospital usage of group purchasing organizations; and (3) as HRSA begins a second and much larger round of 340B covered entity audits and as manufacturer audits of providers begin in earnest.
The coalition acknowledges that “340B is important today and going forward for the many patients who are dependent on this program.” It concludes, however, that:
- “Some uninsured indigent patients may not be experiencing direct benefit” from 340B.
- Some 340B hospitals may skew patient treatment decision “to take advantage of the 340B discount,” with “potentially harmful consequences for patients.”
- 340B is driving private practice oncologists and independent pharmacies out of business.
- Some participating hospitals “may not be true safety-net providers,” as measured by their uncompensated care level and financial condition.
Congress created 340B specifically “to help uninsured indigent patients gain better access to prescription drugs,” they say. In their view, use of the program “for insured patients, at a profit, with no formal guarantee or evidence that the discount flows to the patient,” is contrary to congressional intent.
“Because of the potentially serious consequences that could evolve from these and other findings, Congress should conduct a thorough examination of the 340B program to ensure it is meeting its original goals,” the groups say.
Among the report’s recommendations:
- HRSA should be “appropriately resourced” to oversee 340B.
- Continued oversight is needed to ensure that 340B discounts are used for the purpose of benefiting uninsured indigent patients.
- Improved transparency is needed to ensure that 340B resources “are being directly used to reduce drug costs for uninsured indigent patients.”
- All 340B cost savings should be accounted for “to ensure that they are used to reduce drug costs for uninsured indigent patients.”
- The 340B patient definition should be clarified “to ensure it corresponds to” the purpose of benefiting uninsured indigent patients.
- Hospital eligibility criteria should be changed to meet 340B’s “intended purpose of helping uninsured indigent patients” and to ensure that the program “does not further expand because more patients are insured and fewer are uninsured.”
- 340B guidance should follow formal notice-and-comment rulemaking.
“Without concerted efforts to achieve program integrity, the potential for program misuse is high,” the report concluded.
SNHPA, the association of 340B hospitals, said that while it agrees with parts of the report, the document “is full of misinformation and contains many unsubstantiated assertions.”
Contrary to the industry coalition’s assertions in its report, SNHPA said, “hospitals do, in fact, use program savings to improve care for eligible patients—exactly as Congress intended.” The program, it added, “saves money not just for patients, but for all taxpayers.”
The hospital group said:
- It agrees that HRSA should be adequately funded and it applauded the agency for its enhanced program oversight to date. It said, however, that HRSA should implement Affordable Care Act provisions to let 340B providers validate drug manufacturers’ drug prices, to establish a 340B dispute resolution process, and to selectively audit drug companies.
- It agrees that a clearer, more specific definition of “patient” is needed for the 340B program but it also believes that use of 340B should not be limited to patients based on their insurance status.
- It agrees that the 340B contract pharmacy program should be evaluated “to determine whether it is meeting its goals of stretching resources while increasing pharmaceutical access to indigent patients.”
- Policymakers should consider the impact of Medicaid expansion on 340B and evaluate the effect it will have on program growth.
- It agrees on the need for HRSA to issue formal regulations to “ensure open and transparent rulemaking and … greater clarity concerning program requirements.”[/ms-protect-content]