PUT PATIENTS FIRST:PRESERVE ACCESS, PROTECT THE PROGRAM, and PROVIDE GREATER OVERSIGHT
The 340B Drug Discount Program is an important program designed to help uninsured indigent patients gain greater access to prescription medicines. The AIR 340B coalition supports efforts to preserve access, protect the program’s original intent, while improving accountability of the program to ensure the program continues to serve patients in need.
Congress created the 340B program in 1992 to help uninsured indigent patients gain better access to prescription medicines.
In addition to many other patient assistance programs, today manufacturers provide roughly $6 billion worth of 340B-discounted medications to participants each year. (Source: Berkley Research Group)
Growing evidence suggests the 340B program has departed significantly from its original intent, leading to evidence of abuse of the program and unintended and potentially harmful consequences for patients.
Congressional Oversight Committees and the Health Resources and Services Administration (HRSA) have recently taken steps to improve oversight, and such efforts to ensure program integrity must continue and expand.
PRESERVE PATIENT ACCESS
Greater access to medicines through programs like the 340B Drug Discount Program helps needy patients. Treatment decisions and clinical care pathways should always be guided by the best interest of the patient and not by access to deep discounts in the 340B program.
News and Observer articles and other third-party sources:
As an example, a Charlotte Observer news investigation found many hospitals using the 340B program are routinely marking up prices on cancer drugs two to 10 times over cost. At the same time, there is further evidence that hospitals are charging far more for the same chemotherapy treatment upon buying the practices of independent oncologists who do not participate in the 340B program
Anecdotal evidence shows that the 340B program may skew patient care and clinical decision-making for financial incentives that may flow to the covered entities, but not patients.
Growing evidence of closure of non-340B providers who serve a key role in providing important health care services, which could cut patient access to these local, community providers (i.e. community pharmacies, oncologists).
PROTECT THE PROGRAM’S ORIGINAL INTENT: SUPPORT PATIENTS IN NEED
We would like to work with Congress and the federal government to ensure the 340B program maintains its original purpose – to support patients in need – and avoid unintended (and potentially harmful) consequences for patients and providers.
While the program was intended to benefit needy patients, the facilities actually receive the discount and there is no requirement that the facilities pass along the discount to needy patients. 340B covered entities can access 340B pricing on most outpatient drugs for all of their patients, regardless of patient income or insurance status. No one is accountable to ensure access for needy patients.
The number of entities in the 340B program has increased significantly (6,100 times Congress’ original intent) in recent years, yet no measure of the amount of care provided for indigent uninsured has ever been taken to validate this expansion.
Another abuse of the system has been the utilization of the program by contract pharmacies—for-profit entities—which are not serving patients in a hospital setting. Discounts given to contract pharmacies are captured by the pharmacies, rather than passed on to patients.
PROVIDE GREATER OVERSIGHT
Improved transparency and oversight of the 340B program is needed to ensure it remains aligned with its original intent and supports indigent patients who need the program.
Oversight of the 340B program is currently insufficient. A GAO study found that HRSA’s past oversight of the program was inadequate because it primarily relied on participants’ self-policing to ensure compliance.
While the overall number of covered entity sites that participate in the program has risen by 93% in the past 10 years, the number of HRSA staff overseeing the program has declined by 9% annually since 2008, with fewer than a dozen staff at HRSA today.
A diverse group of health care stakeholders, including BIO, the Community Oncology Alliance (COA), the National Community Pharmacists Association (NCPA), the Pharmaceutical Care Management Association (PCMA) and the Pharmaceutical Research and Manufacturers of America (PhRMA), have come together because they believe in the importance of 340B but recognize the need for improving this program to ensure that it is helping those it was intended to help, namely uninsured indigent patients.
Given the dramatic growth of the program and questions about how revenue generated from the program is used, we recommend:
Clearer guidance for the definition and interpretation of the term “patient”to ensure that it corresponds to the intent of the 340B law, particularly given the coverage expansions and increases in prescription drug coverage through the Affordable Care Act and Medicare Part D.
Because HRSA adopted a definition of “patient” that was ambiguous in several areas, self-policing is problematic. The law requires that covered entities only use 340B drugs for individuals receiving outpatient services who are “patients” of the entity. In its report, GAO recommended that HRSA improve monitoring compliance of covered entities with the requirement that 340B drugs be dispensed only to eligible patients treated in outpatient settings.
Notice and comment rule-making- 340B guidance should follow formal notice and comment rulemaking under the Administrative Procedures Act in order to ensure that careful, well-informed decisions are made and that all stakeholders have the opportunity to provide information and perspectives before HRSA policies are finalized.
Increased transparency to improve compliance with 340B program guidelines and ensure that resources are being directed to patient care for the uninsured indigent.
Full and transparent accounting for all cost-savings derived from the 340B program should be required to ensure that they are used to reduce drug costs for uninsured indigent patients.
Clarification of hospital eligibility criteria to ensure 340B program is meeting its intended purpose and aiding those hospitals providing a true safety net function by serving high numbers of low-income uninsured indigent patients.
HHS Highlights Oversight Challenges with Drug Discount Program
WASHINGTON, D.C. (February 7, 2014) — The Alliance for Integrity and Reform of 340B (“AIR 340B”) today released the following statement on the Department of Health and Human Services Office of Inspector General Report on “Contract Pharmacy Arrangements in the 340B Program”:
The new report released by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) affirms many of the concerns expressed by the members of AIR 340B about the vast expansion and increased use of “contract pharmacy” arrangements in the 340B Drug Pricing Program. While the OIG study (which can be found online here) clearly demonstrates the importance of community-based pharmacies for providing discounted services to low income and uninsured patients, it also provides further evidence that weak oversight and lack of regulatory clarity puts patient needs and care at risk, while in many cases hospitals use contract pharmacy arrangements to capture savings—real dollars— intended for needy patients.
Congress’s original intent never contemplated contract pharmacy arrangements within the 1992 statute creating the 340B program. However, through Health Resources Systems Administration (HRSA) subregulatory guidance, contract pharmacy arrangements were at first allowed only for entities that lacked an in house pharmacy. Later HRSA revised its subregulatory guidance to remove the limits, causing contract pharmacy arrangements to expand dramatically.
Today, some 340B facilities have scores of contract pharmacies. According to the OIG report, “the number of unique pharmacies serving as 340B contract pharmacies has grown by 770 percent, and the total number of contract pharmacy arrangements has grown by 1,245 percent.”
The OIG report found that this enormous growth in contract pharmacy arrangements has left uninsured patients more vulnerable. Moreover, the OIG report also found that, in nearly a third of cases, the covered entities studied do not offer the discounted 340B drug price to uninsured patients at their contract pharmacies, meaning that the uninsured and most needy patients pay the full non-340B price, while covered entities (all but one of which were hospitals) and their for-profit contract pharmacies reap the profit.
Tellingly, the vast majority of errors revealed by the report occurred among the hospitals studied, rather than the HRSA grantee entities that adhere to much stricter guidelines under the conditions of their grants. AIR 340B has advocated for proper oversight of the full 340B program to ensure patient access to the program so they may receive the proper care. The OIG report confirms that “without adequate oversight, the complications created by contract pharmacy arrangements may introduce vulnerabilities to the 340B Program.” The report found that less than 25 percent actually retained independent auditors to review their contract pharmacy arrangements.
AIR 340B commends the HHS OIG for their work in preparing this study, and reiterates their goal of preserving and protecting the original intent and integrity of the 340B program. We are also encouraged that six Members of Congress have also expressed their concern and pledge to work on solutions that benefit the patients (that letter can be found online here).
The Alliance for Integrity and Reform of 340B (AIR 340B) is a coalition of patient advocacy groups, clinical care providers, and biopharmaceutical innovators and distributors dedicated to reforming and strengthening the 340B program to ensure it directly supports access to outpatient prescription medicines for uninsured indigent patients.
White Paper on the 340B Drug Discount Program
Congress created the 340B program in 1992 to help uninsured indigent patients gain better access to prescription medicines. This program, as originated, provided discounts to outpatient facilities for the purpose of sustaining certain services to this population. 340B is important today and going forward for the many patients who are dependent on this program. This white paper examines the history and original intent of the program as well as highlights key findings to help policymakers ensure that the 340B program meets its stated purpose and to provide a roadmap for next steps to be considered.