April 22, 2013—Two members of Congress have written to a Georgia 340B hospital after one of its officials appeared on national television to respond to a drug industry white paper that alleges misuse of the program.
Sen. Charles Grassley (R-Iowa) and Rep. Bill Cassidy (R-La.) sent a letter to Columbus (Ga.) Regional Healthcare System on April 18 seeking information by May 2 about the hospital’s 340B program savings and how it uses those funds to care for the indigent and uninsured.[ms-protect-content id=”2799″]
Unlike their other recent requests for information from 340B hospitals, in their latest letter, Sen. Grassley and Rep. Cassidy cite no specific evidence or charges that Columbus Regional is not complying with the 340B statute or guidelines. The hospital is located about 100 miles south of Atlanta and 40 miles east of Auburn, Ala.
Instead, they said they acted in response to statements by Dr. Burnis Breland, the hospital’s longtime director of pharmacy and clinical research, during a Feb. 15 appearance on the Fox Business News program Money With Melissa Francis.
The Fox network invited Dr. Breland to answer questions about a Feb. 12 report on 340B. The paper was prepared by the consulting firm Avalere and financed by the drug industry trade groups Pharmaceutical Research and Manufacturers of America and Biotechnology Industry Organization; the private practice oncologist group Community Oncology Alliance; the drug company-funded National Patient Advocate Foundation; the PBM group Pharmaceutical Care Management Association; and the independent pharmacy group National Community Pharmacists Association.
The groups expressed concerns that 340B providers give discounted drugs to insured patients and then generate savings by billing insurers at above acquisition cost. They say Congress created 340B for the purpose of making outpatient prescription drugs more accessible to the uninsured poor and that providing 340B drugs to other patients is contrary to congressional intent.
The groups further allege in the report that 340B hospitals may skew patient treatment decision “to take advantage of the 340B discount,” with “potentially harmful consequences for patients” and that some participating hospitals “may not be true safety-net providers.”
340B provider groups counter that there is ample evidence that Congress clearly intended for 340B hospitals and others health-care providers to use savings from 340B discounted drugs given to insured patients to stretch scarce federal resources, reach more patients, and provide more comprehensive care.
During the Feb. 15 Fox Business News program, the host began by saying that generating savings by providing discounted 340B drugs to the insured “sounds like fraud to me” and then asked Dr. Breland, “Is this fraud?”
“No,” Dr. Breland replied, “there’s not a windfall of profits in this program at all. The lower drug costs we incur with the 340B program helps us reduce our losses that we incur in treating indigent patients. … The savings we get from 340B go right back into, to take care of these patients that are unreimbursed services we provide. … What we save on those goes only so far on meeting the needs and the costs of care for the underserved patient.”
In their letter to Columbus Regional, the two lawmakers say that the 340B program is designed and intended “to help lower outpatient drug prices for the uninsured” and that its original intent “was to extend the Medicaid drug discount to the most vulnerable of patients.”
“Nonetheless, we understand that Columbus Regional Healthcare System, an entity that received drugs at a discounted price, subsequently receives reimbursements from Medicare and insurance companies for [340B] drugs at full price,” they wrote.
In a news release to announce the letter, Sen. Grassley said his recent investigation of three North Carolina hospitals’ participation in 340B showed they “were reaping sizeable 340B discounts on drugs and then upselling them to fully insured patients to maximize their spread.”
“If ‘non-profit’ hospitals are essentially profiting from then 340B program without passing those savings to their patients, then the 340B program is not functioning as intended'” he continued.”
Rep. Cassidy said he recognized “the value and importance” of 340B and “we must make sure that its good work is not threatened by those who misuse.”
In an April 19 statement, Safety Net Hospitals for Pharmaceutical Access (SNHPA), which represents nearly 1,000 340B hospitals, said that while it appreciated the lawmakers’ concerns about program integrity, their letter to Columbus Regional “mischaracterizes the program’s purpose.”
“From its inception, the 340B program’s purpose has been to enable safety-net health care facilities to ‘stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services,'” SNHPA said. The Department of Health and Human Services, it added, has specifically stated that Congress intended for hospitals to charge above the 340B acquisition cost for drugs provided to Medicare or privately insured patients, and that the Government Accountability Office has found that hospitals use such savings to serve more patients and provide additional services, consistent with the program’s purpose.
“The 340B program was never intended to subsidize the profits of the insurance industry nor was it intended to serve as a funding source for Medicare,” SNHPA said. “We encourage lawmakers to focus their attention on needed reforms, including better oversight of the pharmaceutical industry’s compliance with 340B and discriminatory practices by some pharmacy benefit managers.”
“The letter states that improper use of the program is increasing. SNHPA knows of no such evidence,” the group continued. “It is also important to note that the 340B program saves money for federal, state, and local taxpayers. This is why the Congressional Budget Office (CBO) concluded twice that expansion of the 340B program—in 2005 and 2010—generated federal savings.”[/ms-protect-content]