July 12, 2013—The Senate Republican who has been examining hospitals’ participation in the 340B program and the trade association for brand-name drug manufacturers have responded to a major new report on the 340B drug discount program.[ms-protect-content id=”2799″]
In a July 9 news release, Sen. Charles Grassley (R-Iowa) said the report on 340B that Safety Net Hospitals for Pharmaceutical Access (SNHPA) issued earlier that same day is “not objective.” America’s Essential Hospitals (formerly the National Association of Public Hospitals and Health Systems) and the National Rural Health Association joined SNHPA for the report’s release. SNHPA yesterday also unveiled a companion website, 340BFacts.com.
“Through my inquiries, I’ve been able to document that several hospitals are profiting from the 340B program rather than simply providing discounted drugs to the uninsured,” he said. “Instead of using the deeply discounted drugs these hospitals receive for the most vulnerable in need, the hospitals are up-selling those drugs to patients with Medicare and private insurance because those patients can pay more. The hospitals are keeping the difference. Even if the 340B program allows this kind of upselling, that doesn’t make it right. ”
In the 27-page report, SNHPA said the suggestion that 340B drugs should not be used for insured patients is contrary to the statute’s legislative history and conflicts with its language. “The law does not require that discounted drugs only be provided to uninsured patients or that program savings only be used to lower the cost of drugs for uninsured patients, as some critics have suggested,” it says. SNHPA also said government and other studies have found that 340B providers use their program savings consistent with congressional intent, for example, to provide medications free of charge or at lower cost to patients or to establish programs to help patients use medications properly.
In his statement, Senator Grassley said “nothing that I know of requires 340B hospitals to report how they use program savings and revenue.”
“Each hospital should provide public documentation of how it uses program proceeds,” he said. “Then the public would be able to evaluate claims of how hospitals use the money.”
In its report, SNHPA said that “Congress, the Administration, drug manufacturers, and safety net providers should work together to develop the means by which to improve program transparency in a way that is not overly burdensome.” Hospitals’ use of 340B savings and manufacturers’ pricing of 340B drugs should both be made more transparent, the group said. In addition, SNHPA called on the Health Resources and Services Administration to exercise its already existing legal authority to publish 340B price files and audit drug manufacturers.
Pharmaceutical Research and Manufacturers of America (PhRMA) also issued a statement to reporters about the 340B program on July 9. “PhRMA believes in the importance of the 340B program, but recognizes the need for improving and refining the safety net program to ensure that it is helping those it was intended to help, namely uninsured indigent patients,” said PhRMA Senior Vice President of Communications Matt Bennett. “While there remains a need for this safety net program, there are rising concerns about the program in its current form.”
PhRMA is part of a group of drug manufacturers, biotechnology companies, pharmacy benefit managers (PBMs), and independent oncologists that have concerns about the growth of the program and its perceived misuse.
SNHPA said it launched the 340BFacts.com website to counter what it believes are misleading claims about 340B.[/ms-protect-content]