Note: This article is the first in a series.
January 8, 2015—A little over nine years ago, Congress wanted to know why health care providers had no way to tell whether they were being overcharged for 340B discounted drugs.[ms-protect-content id=”2799″]
“It is nonsensical to me that” 340B covered entities “do not have access to the ceiling prices,” Chairman Ed Whitfield (R-Ky.) of the House Energy & Commerce Oversight and Investigations Subcommittee asked during a hearing. “Imagine going to a grocery store which advertises a special discount price, only to find that when you go to the register to check out, no one can tell you what that discount is.”
Then, in early 2010, Congress told the Health Resources and Services Administration to begin confirming the accuracy of manufacturers’ 340B ceiling price calculations and to let providers see those prices on a secure website. But lawmakers didn’t follow through with the extra money HRSA said it needed to perform that extra work until January last year.
Now, after almost a decade, this finally might be the year that providers get to see whether they’re being charged the right 340B prices. Congress wants a progress report from HRSA by early March, and HRSA reportedly is on track to publish an implementing regulation for notice and comment in April.
Pricing transparency is just one of the major 340B stories the Monitor will be following in 2015. Among the others:
- Drug manufacturers want lawmakers to reopen the 340B statute and take a hard look at participating hospitals.
- The Republican takeover of the U.S. Senate and the retirements of Rep. Henry Waxman (D-Calif.) and Sen. Tom Harkin (D-Iowa) could have implications for 340B policy.
- After scuttling its planned comprehensive 340B program regulation – the so-called mega-reg – HRSA now plans to address key 340B policy issues in “a proposed guidance for notice and comment,” reportedly early this year.
- In addition to the ceiling price regulations noted above, other 340B regulations are due later this year to establish civil monetary penalties for drug manufacturers that intentionally overcharge, and to create a mandatory and binding 340B administrative dispute resolution process.
- Final briefs are due in March in the drug industry’s second lawsuit over HRSA’s implementation of the 340B orphan drug exclusion.
- The Government Accountability Office and the Health and Human Services Inspector General have several 340B reports in the works.
Pressure to Reopen Statute
Last year, the drug industry and private cancer clinics released several reports they commissioned on hospital participation in 340B. They say the findings support their contention that hospitals use 340B savings to enrich themselves instead of helping needy patients. Throughout the year, the industry-led AIR 340B group and like-minded commentators wrote op-eds along those lines, focusing on newspapers in states with members of Congress who chair committees dealing with 340B. AIR 340B, drug industry groups, some individual drug companies, and the private cancer clinic association also kept repeating the same message on social media, often targeting the same key lawmakers.
Individual hospitals and hospital groups fired back in traditional and new media describing how they use 340B savings to better serve more vulnerable patients – just as Congress intended when it created 340B, they say.
In response to HRSA’s mid-November decision to withdraw the 340B mega-reg, Pharmaceutical Research and Manufacturers of America and AIR 340B urged Congress to reopen the 340B statute and make fundamental reforms to the program. AIR 340B recently elaborated on what reforms it would like to see in its monthly email to its followers in December.
340B gives stability to “true safety net providers” such as health clinics and federal grantees, it said. In contrast, it said, it is questionable whether hospitals use their 340B savings properly. Congress created 340B “to provide access to drugs for medically underserved patients” and “did not intend to create an avenue for hospitals to generate profits with no requirement to prove that they use the funding to benefit underserved patients,” AIR 340B said. “It is critical that specific program reforms identify true safety-net providers that are utilizing 340B discounts to support this patient population, as the law originally intended,” it concluded.
Last month, Congress passed a $1.1 trillion omnibus federal appropriations bill with report language noting there are “concerns that HRSA has been unable to demonstrate that the 340B program benefits the most vulnerable patients.”
“In order to best serve the public need, the program should examine its ability to ensure patients’ access to 340B savings for outpatient drugs. HRSA is directed to work with covered entities to better understand the way these entities support direct patient benefits from 340B discounted sales,” the report continued.
On the same day, Rep. Joe Pitts (R-Pa.), the chairman of the House Energy & Commerce Health Subcommittee, asked a witness during a hearing on Medicare and Medicaid spending if it was “time for a complete re-evaluation of the 340B program.”
If 340B was more targeted, “would that free up more drug industry dollars for additional research and development and lifesaving cures and life-enhancing therapies?” he added.
Hospital groups say such a re-evaluation is unwarranted. The 340B program is working as Congress intended, they say, and is more critical now than ever before.
For now, it is uncertain how Congress will respond to drugmakers’ and hospitals’ divergent messages about 340B. The debate over 340B’s future course, however, shows no signs of abating.
Coming in Part 2: Who’s who on key congressional committees[/ms-protect-content]