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U.S. House Asserts Oversight of the 340B Drug Pricing Program

July 18, 2017

In a Congressional hearing today—Examining HRSA’s Oversight of the 340B Drug Pricing Program—members of the U.S. House Energy & Commerce Oversight & Investigations Subcommittee discussed the intent of the 340B Drug Pricing Program, oversight by the Health Resources and Services Administration (HRSA), and potential areas for legislative action by Congress.

The 340B Drug Pricing Program requires drug manufacturers to provide outpatient drugs to eligible health care organizations that care for many uninsured and low-income patients at reduced prices. Particularly in the face of high-cost pharmaceuticals, this program supports hospitals in stretching limited resources to better serve their patients and communities.

The 340B Drug Pricing Program supports hospitals in serving the most disadvantaged in our society and building healthy communities. Hospitals use 340B savings to increase patient access to prescription drugs, enhance services for the uninsured or underinsured, and support cost-effective and patient-focused pharmacy services such as medication therapy management, disease management, and patient assistance programs.

Testimony was provided at the hearing by officials from the U.S. Department of Health & Human Services (HHS) Office of the Inspector General and the Government Accountability Office, and the Director of the Office of Pharmacy Affairs at HRSA.

Congressman Tim Murphy (R, PA-18) chaired the hearing and placed a significant focus on concerns with respect to the ability to track how savings generated by the program are used and HRSA’s ability to effectively audit and conduct oversight. Congressman Murphy sought clarity about what authority HRSA has under the authorizing statute.

Congressman Ryan Costello (R, PA-06) directed his inquiries toward addressing duplicate discounts. He questioned if current technology platforms are sufficient for tracking the program, and if there needs to be greater access to data about drug purchases under the program.

Lawmakers participating in the hearing cited an interest in pursuing legislation that would more proscriptively define how the 340B drug pricing program is used.

In addition to Congressional oversight, the 340B program is also subject to a new regulatory proposal included in the Hospital Outpatient Prospective Payment System (OPPS) proposed rule which calls for significant decreases in the payment rate for certain Medicare Part B drugs purchased by hospitals under the 340B drug pricing program. The Centers for Medicare & Medicaid Services (CMS) is proposing payment rates of the average sales price (ASP) minus 22.5 percent rather than ASP plus 6 percent, which is the current practice. This shortsighted proposal would do nothing to address skyrocketing drug prices, and would only stand to challenge access to lifesaving prescription drugs to low-income patients in communities across the country.

During the coming weeks and months, entities that use the 340B program to fulfill the stated intent of “stretching scare federal resources as far as possible, reaching more eligible patients and providing more comprehensive services” will work together with national stakeholder groups and HAP to educate lawmakers about the importance of this program.

Contact Jolene Calla, vice president, health care finance and insurance, with questions pertaining to the 340B drug pricing program. Questions regarding federal advocacy may be directed to Laura Stevens Kent, vice president, federal advocacy.

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