August 7, 2009 – More than three years after former President George Bush signed into law the Deficit Reduction Act, allowing free-standing children’s hospitals to enroll in the 340B drug discount program, such hospitals are finally on the verge of getting in.
Mary Wakefield, head of the Health Resources and Services Administration (HRSA), said the formal guidance that would open the door for such health facilities have been approved by her department and moved to the Office of Management and Budget for final sign-off. No hiccups are expected there.
A second guidance allowing 340B-covered health care facilities to contract with multiple pharmacies is not far behind, Wakefield told the Annual 340B Coalition Conference in Washington, D.C., last month.
Read her entire speech here.
Children’s hospitals would save millions
Once the children’s hospital policy is official, it will give up to 80 children’s hospitals access to discounted drugs to help them serve a growing number of uninsured and underinsured pharmacy patients. Organizations representing such providers have been pushing for several years to get them into the 340B program, and been frustrated by the delay. (See Monitor Feb. 2009.)
So children’s hospitals were thrilled to learn that the new policy is imminent.
“If HRSA finally included children’s hospitals in the 340B program, it would be huge for us,” said Steve Pate, manager of outpatient pharmaceutical services at St. Jude Children’s Research Hospital in Memphis, Tenn. “I’ve been told that we would recognize as much as 40-50 percent savings on our outpatient take-home prescriptions and outpatient clinic-administered drugs. If that’s the case, the program has the potential to save us several million dollars a year. For institutions like us that utilize many high-cost drugs such as factor, specialty and oncology medications, the cost savings would be substantial.”
No risk for diversion
Language that would allow 340B providers to contract with more than one pharmacy is also being finalized.
“We tested this contracting method in our Alternative Methods Demonstration Projects and determined that it did not create a risk of diversion or duplicate discounts with the Medicaid rebate program,” Wakefield told conference participants. “The ability to contract with multiple pharmacies will improve patients’ access to needed drugs, and we are prepared to recommend that the notice be published in final form.”
Patient definition keeping 340B advocates in suspense
A 2007 Federal Register notice to clarify and limit the definition of “patient” under the 340B program continues to spook safety-net providers – and HRSA is tightlipped about how the agency may deal with this matter under the new administration. Providers fear a revised patient definition would limit their ability to offer discounted drugs to patients in need and to serve now-eligible patients outside the confines of their hospital walls. (See Monitor March 2009.)
Drug manufacturers, on the other hand, have urged HRSA to clarify who is and who’s not eligible for the 340B discount to prevent alleged abuse.
“HRSA feels very strongly that a clear and enforceable definition is needed to prevent non-eligible persons from receiving 340B drugs and, thus, to ensure the program’s integrity,” Wakefield said. “Based on the comments we received, HRSA has made revisions to the original notice, and we are considering plans to publish the revised notice for additional comments.”
If the guidelines are published for additional feedback, rather than in final form, it would be a victory for 340B providers that mounted a vigorous campaign to prevent final publication.
A HRSA spokesman declined to say when the revised patient definition guidance may be published.