Life Science Compliance Update

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April 09, 2018

Senate Holds Hearing on 340B Drug Pricing Program

HELPcommittee

On Thursday, March 15, 2018, the United States Senate Committee on Health, Education, Labor & Pensions held a hearing entitled, “Perspectives on the 340B Drug Pricing Program,” with testimony provided by Bruce Siegel, MD, MPH, Lori M. Reilly, Sue Veer, MBA, and Joseph M. Hill III, MA. Each individual brought a different perspective to the table and valuable insight to the issue.

Bruce Seigel, President and CEO of America’s Essential Hospitals

Dr. Seigel started off his testimony by reminding all present that the 340B program was initially created to “protect hospitals of the safety net from the existential threat of unsustainable drug costs.” According to his testimony, “In the 1992 House report that accompanied legislation establishing the 340B program, they wrote, ‘In giving these ‘covered entities’ access to price reductions the Committee intends to enable these entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.’”

Dr. Seigel then went through to explain the savings 340B programs help to provide, and the better care and outcomes the additional services provide. He encouraged Congress to review the legislative intent and ensure the programs are operating as intended.

Lori M. Reilly, Executive Vice President, Policy Research & Membership, PhRMA

Ms. Reilly expressed PhRMA’s support for the 340B program and noted its importance in supporting the care provided by recipients of Health Resources and Services Administration (HRSA) grants. Ms. Reilly also walked back in time to when the program was started as a way to assist “federal grantees, like [Community Health Centers], and true safety-net hospitals serving large numbers of uninsured or otherwise vulnerable patients.” She noted the distinction between grantees and hospitals in their reporting requirements and that the lack of program standards for use of 340B discounts by disproportionate share hospitals (DSHs) combined with the growth of the program driven by the hospitals, has transformed the 340B program. 

Ms. Reilly stated PhRMA’s belief that the “large discounts biopharmaceutical manufacturers provide under the 340B program should serve a targeted purpose” and help those who need it the most. 

Sue Veer, MBA, President and CEO, Carolina Health Centers/NACHC Consultation

Ms. Veer provided insight as to how health centers and their unique characteristics help provide patients with access to affordable pharmaceuticals. She also discussed the way many health centers use the program, and the resulting savings, to expand access to essential primary care services and drive improved clinical outcomes.

She spoke about how health centers are “good stewards” of the 340B program by ensuring “vulnerable patients can  afford their medications; reinvest[ing] 340B savings toward purposes that advance health centers’ safety net mission of expanding access for underserved populations; and adher[ing] to [the] extensive reporting and oversight requirements to demonstrate that health centers are increasing access to affordable primary health care.”

She also provided a few examples of how 340B savings increase access to high-quality, but affordable, care for their patients, including: implementing  delivery systems and mail order pharmacy programs; establishing multidisciplinary Care Transition Teams for  patients at high risk for repeat hospital admissions; and covering the cost of uncompensated care provided to patients in communities with high rates of poverty for which the health center’s Section 330 grant funds are inadequate.

Joseph M. Hill, III, MA, Director of Government Relations, ASHP

Mr. Hill spoke on behalf of the American Society of Health-System Pharmacists (ASHP), offering the organization’s perspective on the 340B drug pricing program. He noted that the group supports the program as many of its members have seen “firsthand the benefits of the program to the patients they serve.”

He went on to note that “when federal budgets are stretched thin, the federal 340B program helps maximize federal resources while providing access to lifesaving medications.”

Conclusion

Given the widespread support for the 340B program, it is likely that it is here to stay. What remains to be seen, however, is whether Congress will work to reign in the out-of-control side of it and modify it back on a sustainable path like was initially intended.

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