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House Subcommittee Holds Hearing to Review 340B Legislation

July 13, 2018

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PRESS CONTACTS
Jason Kleinman, Senior Legislative Analyst, Govt. Relations

The House Energy and Commerce Health Subcommittee held a July 11 hearing on the 340B Drug Pricing Program. The hearing included a review of a recent Government Accountability Office (GAO) report on contract pharmacy arrangements, as well as an examination of 13 legislative proposals that would impact the program.

The AAMC submitted a statement to the subcommittee supporting the 340B program and two bills that would strengthen the program:

  • A bill (H.R. 4392) introduced by Reps. David McKinley (R-W.Va.) and Mike Thompson (D-Calif.), with nearly 200 bipartisan cosponsors, that would reverse the $1.6 billion annual cut in Medicare reimbursements to 340B hospitals in the calendar year 2018 outpatient final rule issued by the Centers for Medicare and Medicaid Services (CMS) last year, and
  • The Stretching Entity Resources for Vulnerable Communities Act (SERV Act, H.R. 6071) introduced by Rep. Doris Matsui (D-Calif.), which, in addition to rescinding these cuts, would clarify the intent of the program and improve program integrity to ensure that all program participants are held to the same oversight standards.

Additionally, the AAMC expressed concern about a variety of legislative proposals that seek to reduce the scope of the program, which could result in less access to critical services for low-income patients. Specifically, the association is concerned about provisions related to creating a moratorium on hospital participation, imposing additional reporting requirements on covered entities, changing the definition of an eligible patient, creating new eligibility thresholds, and imposing user fees on 340B hospitals.

During the first panel of the hearing, GAO Health Care Director Debra Draper, PhD, provided an overview of the June 28 report on contract pharmacy arrangements [see Washington Highlights, June 29]. Draper’s testimony included seven recommendations to increase oversight by the Health Resources and Services Administration (HRSA), three of which the agency did not concur with because they are overly burdensome.

The second panel featured testimony from Parkland Health and Hospital System President and CEO Frederick Cerise, MD; University of California San Diego (UCSD) Pharmacist-in-Chief and Associate Dean Charles Daniels, BS Pharm, PhD; and Texas Oncology Executive Vice President Debra Patt, MD, MPH, MBA. Cerise and Daniels both focused on how their institutions rely on the savings from the 340B program to support low-income patients in their communities. Cerise noted that in addition to using 340B savings to administer free or reduced-cost medicines to low-income patients, the program allows Parkland to invest in other programs, including diabetes management, pediatric asthma programs, and smoking cessation programs. Daniels highlighted that UCSD uses its savings to offer primary and specialty services at an HIV/AIDS clinic, as well as a program for staff to counsel patients at their bedsides before being discharged on how to take their medications appropriately and improve their health outcomes.

In his opening statement, Subcommittee Chair Michael Burgess, MD, (R-Texas) stated that the 340B program “enjoys strong bipartisan support as it helps many health care providers provide care to vulnerable Americans.” He added that the hearing “is an opportunity to engage in a dialogue and exchange ideas about what might be the best way to move forward with improving the accountability and transparency of the 340B program.”

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