New section

Content Background

New section

Senate HELP Committee Holds Hearing on 340B Program

May 18, 2018

New section

New section

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

The Senate Health, Education, Labor, and Pension (HELP) Committee May 15 held the second in a series of hearings to examine the 340B Drug Pricing Program [see Washington Highlights, March 16]. Witnesses from the Office of the Inspector General (OIG) and Government Accountability Office (GAO) both provided recommendations on how to improve and strengthen the program.

In his opening statement, Committee Chair Lamar Alexander (R-Tenn.) provided an overview of what he hoped to determine during the hearing, including identifying the purpose of the 340B program, whether or not the program is fulfilling its purpose, and if there should be any changes in the law so that it can fulfill that purpose. He stated that he has heard that hospitals and clinics are using the 340B program to benefit low-income patients or serve another worthy objective, but noted, “I’d like to hear more about whether HRSA’s lack of oversight authority has made it difficult for us to have agreement on a common set of data about the 340B program so that we can make such determinations.”

Ranking Member Patty Murray (D-Wash.) highlighted how many institutions in Washington, including the University of Washington Medical Center, are using their savings from the 340B program to support their local communities. She expressed the need for increased accountability for all participants in the program, stating, “We should be confident that 340B entities are using their savings appropriately and pharmaceutical manufacturers are providing 340B discounts fairly.”

Sen. Murray also referenced an OIG report that found that many drug companies were overcharging 340B participants for prescription drugs and criticized the Trump administration for delaying implementation of a final rule that would alleviate this problem by setting standards on calculating 340B ceiling prices and civil monetary penalties for manufacturers [see Washington Highlights, May 4].

During her testimony, OIG Assistant Inspector General for Evaluation and Inspections Ann Maxwell praised the Health Resources and Services Administration’s (HRSA) efforts to increase program integrity over the past decade. She also outlined OIG’s recommendations, which include increasing transparency to allow for payment accuracy and clarifying rules to ensure that the 340B program operates as intended. To increase transparency, Maxwell stated that “340B providers and State Medicaid programs need to know the 340B ceiling prices to determine whether they are paying the correct amount.”

GAO Health Care Director Debra Draper, PhD, provided an overview of GAO’s recommendations from its 2011 report and further recommended that HRSA finalize new guidance on the definition of an eligible patient and issue guidance to specify hospital eligibility. Additionally, Draper noted that GAO will issue upcoming reports this summer on contract pharmacies and the characteristics of hospitals participating in the program.

The Senate HELP Committee will hold another hearing on the 340B program with HRSA later this summer.

New section