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  • Washington Highlights

    Energy and Commerce Subcommittee Holds Hearing on 340B Program

    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The House Energy and Commerce Oversight and Investigations Subcommittee held an Oct. 11 hearing on the 340B Drug Pricing Program. Prior to the hearing, the AAMC submitted a letter subcommittee Chair Tim Murphy (R-Pa.) and Ranking Member Diana DeGette (D-Colo.) supporting to the 340B program, as well as an Oct. 5 joint letter with the American Hospital Association.

    Energy and Commerce Ranking Member Frank Pallone (D-N.J.) praised the 340B program in his opening statement, “It is beyond question that the resources provided through the 340B program directly augment patient care throughout the country. We have consistently heard this message from all types and sizes of 340B providers, from small AIDS clinics to large urban hospitals. The 340B program plays an integral role in supporting the mission of safety net providers serving low-income, uninsured, and underinsured patients.”

    In response to calls for increased transparency, Rep. Pallone added, “Good program integrity strengthens our programs not only for today but for the future. I want to be clear, however, that while I am always happy to have a conversation about strengthening the 340B program, it is plain from the responses we have received that 340B-covered entities are using their savings to serve the community, and Congress should commend and support these efforts.”

    Full Committee Chair Greg Walden (R-Ore.) also expressed support for the program, stating, “The 340B program enables covered entities to do some real good in our communities: to extend care to underserved populations, to create programs that serve specific community needs, and to provide life-saving drugs at discounted prices to the populations that need them the most. For some entities, this program is the difference in keeping their doors open or closing shop, which could result in a loss of care to vulnerable population.”

    However, he voiced some concern about the oversight of the program. He added, “Our goal today is to develop a better understanding of how much money different entities save through participation in the 340B program, how covered entities track their savings, and how those savings are used to improve patient care in various way.”

    The panel was comprised of leaders from five institutions that participate in the 340B program, including Johns Hopkins Hospital Executive Vice President and Chief Operating Officer Charles Reuland, M.H.S., Sc.D. In his testimony, Mr. Reuland highlighted how his medical center is using the savings from the 340B program to support low-income patients in Baltimore. He stated, “At no cost to taxpayers, except for modest appropriations to administer the program, the 340B program has been a success for our community, allowing [Johns Hopkins] to operate a variety of programs and provide services for vulnerable patients that improve their health and well-being that otherwise would not be possible. Importantly, the savings afforded by the 340B drug discount program allow covered entities to focus on preventive medicine, population health and care throughout the lifespan. These efforts help avoid other, more expensive medical interventions, the cost of which would be borne in large part by federal and state government funds if it were not for the 340B program.”

    The AAMC’s letter to the subcommittee highlights that the 340B program is critical to major teaching hospitals and the communities they serve. The letter notes, “The AAMC strongly supports the 340B Program, which allows safety-net hospitals and other eligible providers to leverage discounts from pharmaceutical companies to provide critical, life-saving services to vulnerable patients at no cost to taxpayers.”

    This hearing was a follow-up to a July 18 hearing that featured witnesses from the Health Resources and Services Administration, Government Accountability Office, and Office of Inspector General [see Washington Highlights, July 21].