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Drug Program Needs Reforming

Today, the AIR340B Coalition released a report, which found evidence that disproportionate share hospitals (DSH) participating in the 340B drug discount program often are not using the program as originally intended. The report comes a day before the House Energy & Commerce Subcommittee on Oversight and Investigations holds a hearing to investigate how providers utilize revenue generated by the 340B drug discount program.

Policymakers have renewed their focus on how the 340B drug discount program functions among “safety net” hospitals, particularly Disproportionate Share Hospitals (DSH), which qualify for the 340B program because they provide a sufficient amount of inpatient care to Medicaid and low-income Medicare beneficiaries.

The U.S. health care system needs systemic reforms that comprehensively address the problems of declining quality and rising costs. Alas, beneficial systemic reforms will not be implemented any time soon. There are still opportunities for Congress to implement tailored reforms that can help address these problems in the near term. One such opportunity is reforming the out-of-control 340B drug pricing program (the federal drug discount program created under the Veterans Health Care Act of 1992).

When a hospital becomes newly eligible for what is intended to be a safety-net program, you might expect to see the hospital serving more indigent or uninsured. For example, you would expect to see the amount of charity care the hospital provides increase with the additional revenue a hospital gets from the program. But with the 340B drug pricing program, new data shows that often the opposite happens.

WASHINGTON -- The Community Oncology Alliance (COA) released a report last week on the costs of cancer treatment depending on the site of care. The report found that across various types of cancer profiles, the cost of cancer care for patients treated in the community clinic setting is about $8,000 less expensive per month than treatment in the hospital-based setting.* Looked at another way, the total cost of care for cancer patients receiving chemotherapy delivered in the hospital outpatient setting is nearly 60 percent, or $90,144, per year more expensive than the same treatment delivered in independent, community oncology practices.

While not yet in the limelight of healthcare discussions, and totally unknown to most people, the federal 340B drug discount program affects many vulnerable patients in Southwestern Illinois. Created in 1992 to help vulnerable or uninsured patients afford valuable medications by providing certain hospitals and safety net clinics with discounted medicine, the 340B program is no longer functioning as intended.

Drug Discount Program Needs Reform