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  • Washington Highlights

    MedPAC Releases 340B Drug Pricing Program Report to Congress

    Tannaz Rasouli, Sr. Director, Public Policy & Strategic Outreach
    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    The Medicare Payment Advisory Commission (MedPAC) May 22 released a standalone Report to the Congress on the 340B Drug Pricing Program. The report, which was released in response to a congressional request for the commission to examine the 340B program, provides an overview of the program but does not include any recommendations.

    The report outlines how the 340B program operates and highlights its recent growth. It notes the increase in the number of hospital organizations (a hospital and its affiliated sites) participating in 340B, which is largely due to the growth in the number of critical access hospitals (CAHs) and other types of hospitals that became eligible for the program through the Affordable Care Act (ACA, P.L. 111-148 and P.L. 111-152). Over the same period, the number of hospitals qualifying as a result of their Disproportionate Share Hospital (DSH) adjustment percentage declined slightly.

    The report states covered entities spent $7 billion on 340B drugs in 2013, representing 2.2 percent of total U.S. drug spending that year. About 45 percent of all Medicare acute care hospitals participated in 340B in 2014, and 340B hospitals accounted for 48 percent of Medicare spending in Part B drugs at all acute care hospitals in 2013.

    Additionally, the report discusses past concerns about the Health Resources and Services Administration (HRSA)’s oversight of the program on topics such as patient definition, hospital eligibility, contract pharmacies, and compliance of both manufacturers and covered entities, but notes recent efforts by HRSA to address these issues. It also indicates that HRSA plans to issue guidance in 2015 “to clarify important requirements and strengthen program integrity.”

    The commission also discussed the 340B program at two recent public meetings [see Washington Highlights, March 6].