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  • Washington Highlights

    HELP Committee Examines 340B Drug Pricing Program

    Len Marquez, Senior Director, Government Relations
    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The Senate Health, Education, Labor, and Pensions (HELP) Committee March 15 held a hearing entitled “Perspectives on the 30B Drug Pricing Program.” This hearing followed multiple House Energy and Commerce Committee 340B activities including two hearings and the release of the Committee’s subsequent report [see Washington Highlights, Oct. 13, 2017; July 21, 2017; and Jan. 12, 2018].

    In her opening remarks, Ranking Member Patty Murray (D-Wash.) explained Congress’s original intent when establishing the 340B Program: “For over a quarter of a century, the 340B program has been a critical safety net for health providers that bear the burden of caring for some of our patients and communities with the greatest needs and fewest resources. The 340B program was started in 1992 with a simple goal, to ‘stretch scarce federal resources’ to ‘provide more comprehensive services’ to vulnerable populations.”

    Sen. Murray went on to mention several Washington state 340B safety-net providers and the wide-ranging services they provide their communities. She specifically highlighted the University of Washington describing how it has “used 340B savings to stretch its reach with innovative initiatives. Like the University’s tele-pain program, which is combatting the opioid epidemic through innovative audio and video conferencing support for providers treating rural patients who struggle to manage chronic pain. This program, doesn’t just work in Washington, participants cover Wyoming, Montana, Oregon, Idaho, and beyond.”

    In his opening statement, HELP Committee Chair Lamar Alexander (R-Tenn.) described the purpose of the 340B Program, criticisms of how hospitals are using program savings, and whether any changes to the program are needed. Focusing on the logistics of the 340B Program, Alexander stated, “340B hospitals saved $6 billion in 2015 by buying prescription drugs at a discount. That $6 billion represented about 1.3 percent of the total purchases of prescription drugs in the United States in 2015…Hospitals will point out that, according to the Department of Health and Human Services, hospitals spent more than $50 billion in 2013 on uncompensated care –that’s service to patients that is not reimbursed. Hospitals and clinics use the $6 billion in savings they generate through the 340B program to help offset the money they spend in uncompensated care.” However, Sen. Alexander also stated that “we also know there are instances where 340B hospitals and clinics may not be using the savings to help low-income patients afford their medications or to provide care. There is no limit in the statute that says what hospitals may or may not spend the money on.”

    Testifying on behalf of the nation’s public hospitals was Bruce Siegel, MD, MPH, president and chief executive officer of America’s Essential Hospitals. In his testimony, Dr. Siegel highlighted the critical role safety-net hospitals play in their communities and how they utilize their 340B savings, saying “Our hospitals’ work to care for low-income patients and provide entire communities with high-intensity, lifesaving services—trauma care, burn units, disaster response, and others—reflects Congress’ vision for the 340B program. The list of comprehensive services made possible by 340B savings is long: free clinics and community programs for primary and chronic condition care; cancer and transplant care, including costly chemotherapy and anti-rejection drugs; medical respite care for the homeless and case management for underserved patients; training for rural hospital partners in high-risk labor and delivery and other specialized care.”

    Additionally, Joseph M. Hill III, MA, director, government relations division, American Society of Health-System Pharmacists, pushed back on the claim that 340B providers aren’t held accountable for use of program savings. He explained, “In September 2011, the Government Accountability Office (GAO), issued a study of the federal 340B program and found that, in large part, the program is operating as originally intended. Specifically, the GAO found that ‘all covered entities reported using the program in ways consistent with its purpose’ and that ‘all covered entities reported that program participation allowed them to maintain services and lower medication costs for patients.’” Mr. Hill also talked about the positive impact of 340B Program on rural communities, stating “Safety net providers are especially critical in our nation’s rural areas, where access and ability to pay for care are often compromised.”