Life Science Compliance Update

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February 06, 2018

Senator Cassidy Introduces Legislation on 340B Program

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Recently, Louisiana Senator Bill Cassidy introduced the Helping Ensuring Low-income Patients have Access to Care and Treatment, (the “HELP Act”).

The legislation would close loopholes in the United States Department of Health and Human Services’ (HHS) 340B program and hold hospitals accountable for passing on prescription drug discounts to patients.

The HELP Act would increase transparency and strengthen the reporting requirements to prevent abuse and ensure that 340B discounts are being used efficiently and to lower drug costs. The bill would prohibit any new enrollments in the 340B program for at least two years and would require the HHS secretary to issue new reporting requirements for current program participants.

The legislation includes the following pieces:

  • A temporary halt on the expansion of the 340B program for disproportionate share hospitals (including hospital outpatient facilities)
  • Clearer eligibility standards for hospitals and their offsite outpatient facilities
  • Public data reporting that highlights key metrics like patient mix and the amount of charity care provided by non-rural hospitals
  • New GAO and OIG reports on key areas, including reports on charity care rates at physician offices purchased by hospitals
  • A claims modifier, which will make it easier to identify and prevent duplicate discounting

However, there are several exceptions to pieces of the legislation. For example, critical access hospitals, rural referral centers, sole community hospitals, grantees and PPS-exempt children’s or cancer hospitals would still be allowed to enroll in the 340B program. Further, the bill exempts grantees along with rural and critical access hospitals from most of the bill’s new reporting requirements.

“The 340B program is an important resource for hospitals serving low-income areas,” said Senator Cassidy, who is a practicing physician. “But too often the program’s discounts are used to pad hospitals’ bottom lines instead of helping disadvantaged patients afford their treatments. This bill will increase transparency and accountability and help ensure these discounts reach patients.”

PhRMA Response

On January 17, 2018, Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Stephen J. Ubl issued a statement in support of the HELP Act.

PhRMA welcomes the introduction of legislation by Senator Bill Cassidy to review and fix the 340B program. As stated in the recently released House Energy and Commerce Committee report, there are a number of flaws with the 340B program that must be addressed, including more oversight to ensure the program is meeting its intent of helping vulnerable and uninsured patients. If passed, this legislation will enable Congress and the Health Resources and Services Administration to take additional, much-needed action to get the 340B program back on track.

We saw increased attention on the 340B program throughout 2017 from the Hill and the Administration, and it is encouraging to see continued focus in 2018. There has long been bipartisan support for fixing 340B, including recently introduced bipartisan legislation in the House, and PhRMA looks forward to working with all stakeholders to keep this momentum going.

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