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  • Washington Highlights

    AAMC Submits Letter in Response to Energy and Commerce Subcommittee Hearing on 340B Program

    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The AAMC July 27 submitted a letter to the House Energy and Commerce Oversight and Investigations Subcommittee in response to the Subcommittee’s July 18 hearing on the 340B Drug Pricing Program [see Washington Highlights, July 21]. In the letter, the AAMC reiterates its support of the 340B program, responds to misperceptions raised during the hearing, and expresses its opposition to the recent Centers for Medicare and Medicaid (CMS) Hospital Outpatient Prospective Payment System (OPPS) proposed rule, which reduces Medicare payments to hospitals that receive discounts on 340B drugs.

    The letter, which the AAMC sent to Subcommittee Chair Tim Murphy (R-Pa.) and Ranking Member Diana DeGette (D-Colo.), states that the association “strongly supports the 340B Program and looks forward to working with Congress and the Administration to ensure the program continues to serve as an effective resource for providing critical services to vulnerable populations across the nation.”

    The association also highlights its concern about some of the criticisms raised about the 340B program during the hearing, including the incorrect assertion that that growth in the program is responsible for the increase in prescription drug prices. The AAMC responded, “While the 340B program has continued to grow, HRSA estimates that 340B sales are less than three percent of the total U.S. drug market. Given how small the 340B Program is relative to the estimated $457 billion in prescription drug spending in the United States in 2015, the AAMC strongly believes that the 340B Program is not a significant driver of drug spending.”

    In the letter, the AAMC voices its opposition to the recent OPPS proposed rule, which would reduce Medicare payments for separately payable, non pass-through drugs purchased at a discount through the 340B program from the current rate of average sales price (ASP) plus six percent to a new rate of ASP minus 22.5 percent [see Washington Highlights, July 14]. According to the AAMC, “The CMS proposal would negate the longstanding statutory intent of HRSA’s 340B Program and severely limit safety net hospitals’ abilities to provide needed care and medications to the patients they serve in rural and urban communities across the nation. The AAMC strongly opposes this, which would undermine the 340B Program and will penalize safety net hospitals participating in 340B, severely restricting their ability to sustain vital services and provide needed care to underserved communities.”