November 30, 2012—Legislation that aims to address drug shortages by exempting manufacturers from providing 340B discounts on certain pharmaceuticals has been introduced in the U.S. House.
Rep. Bill Cassidy (R-La.), a member of the House Energy and Commerce Subcommittee on Health, introduced the Patient Access to Drugs in Shortage Act (H.R. 6611) late yesterday.[ms-protect-content id=”2799″] The bill has four Republican co-sponsors: Reps. Andy Harris (Md.), Mike Rogers (Mich.), Tom Rooney (Fla.), and Dan Benishek (Mich.)
The bill aims to alleviate shortages by giving manufacturers market-based incentives to make and sell drugs susceptible to shortages. It would change the Medicare Part B reimbursement rate for generic injectable drugs with three or fewer manufacturers from the current rate based on average sales price (ASP) to rates based on wholesale acquisition cost (WAC). A draft version of the bill circulating on Capitol Hill this fall would have applied to drugs with four or fewer producers.
Rep. Cassidy’s bill would also exempt generic injectable drugs with three or fewer manufacturers from 340B discounts and Medicaid rebates through the year 2020. Sen. Orrin Hatch (R-Utah) has drafted similar legislation but has not introduced it at this time.
In addition, H.R. 6611 would give manufacturers of brand-name drugs that enter the market to make a drug in short supply an exemption from the Affordable Care Act’s drug industry annual fee.
Some health policy experts argue that 340B is a price control that distorts markets and leads to shortages. However, the Food and Drug Administration, the Government Accountability Office, leading pharmacist organizations, hospital groups, and the generic drug industry have not found a link between 340B pricing and shortages.
Safety Net Hospitals for Pharmaceutical Access, which represents 340B hospitals and health systems, issued a statement opposing the bill. “SNHPA supports efforts to end drug shortages. However, the 340B program has nothing to do with this problem,” the group said. “What’s more, H.R. 6611 would create a 340B pricing exemption so broad that it would even include drugs that have never been in short supply. … If H.R. 6611’s 340B language were to become law, it would increase costs to patients, providers, and the government without alleviating drug shortages.”
Organizations that have expressed support for the legislation include the private oncology practice group Community Oncology Association, the drug-industry funded National Patient Advocacy Foundation, and AmerisourceBergen Specialty Group.[/ms-protect-content]