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Congressional Committee Hears How Hospitals Use 340B Drug Pricing Program

October 11, 2017

In a hearing before the U.S. House Energy & Commerce Oversight and Investigations Subcommittee, health care providers testified to how the 340B Drug Pricing Program helps them expand and improve access to care.

The 340B Drug Pricing Program requires pharmaceutical manufacturers to sell outpatient drugs at discounted prices to health care organizations that:

  • Care for large numbers of uninsured and low-income patients
  • Serve rural communities
  • Offer vital services to cancer patients and children

Lawmakers heard testimony from three hospital leaders, as well as federal grantees under the Ryan White HIV/AIDS Program and Federally Qualified Health Centers.

Questions asked during the hearing focused on how health care providers track the savings generated by the 340B program and how the savings are directed. U.S. Congressman Ryan Costello (R, PA-06) used his time during the hearing to emphasize the importance of being able to audit the program and ensuring that participating entities have the accounting mechanisms to safeguard accountability.

The hearing today—Examining How Covered Entities Utilize the 340B Drug Pricing Program—served as a follow-up to a July 18 hearing by the Oversight and Investigations Subcommittee that explored oversight of the 340B Drug Pricing Program by the Health Resources and Services Administration (HRSA).

Ahead of today’s hearing, the American Hospital Association (AHA) and Association of American Medical Colleges (AAMC) sent a letter to the Energy & Commerce Committee reinforcing the intent of the program and offering examples of how the program works within hospitals.

Hospitals in Pennsylvania have cited that the program allows them to reach more patients and provide more comprehensive services. Many hospitals that participate in the program use the savings to help patients by offering their prescription medications at significantly reduced costs, or no cost at all. Additionally, the program supports initiatives such as providing transportation services to get patients to their doctor appointments, or expanding access to wellness and medication management programs.

A recent op-ed in the Delaware County Daily Times highlights how the Mercy Health System uses savings from the program to make sure their most vulnerable patients have access to the medication they need. The Philadelphia Inquirer featured an opinion piece—Continue Federal Drug-assistance Program that Aids PA Hospitals, and a HAP blog makes the case that in the face of skyrocketing prescription drug costs, the 340B program has never been more important.

Earlier this week, a group backed by the pharmaceutical industry released a disingenuous report that misrepresents how hospitals use the savings from the program to reinvest in care for their community. The AHA highlighted how the report misses the mark in a recent blog.

Setting the record straight, in 2015, 340B hospitals provided $23.8 billion in uncompensated care—62 percent of all uncompensated care provided by hospitals. Uncompensated care includes “bad debt” (services for which hospitals anticipated but did not receive payment) and charity care (services for which hospitals neither received nor expected payment because they determined, with help from the patient, the patient’s inability to pay).

HAP continues to work to educate federal lawmakers about the importance of the 340B Drug Pricing Program for hospitals in Pennsylvania and make the case against payment cuts, and be sure patients across the commonwealth understand how the 340B program helps patients in need.

In late September, ten members of the Pennsylvania Congressional delegation signed a letter urging the Centers for Medicare & Medicaid Services (CMS) to abandon a proposed payment policy that will limit the ability of hospitals to use the 340B Drug Pricing Program to better serve their patients and communities. Senator Casey (D, PA) joined 56 colleagues in the U.S. Senate in sending a similar letter that raises concerns about the proposed payment policy, and restates the importance of the 340B program.

Contact Laura Stevens Kent, HAPs vice president, federal advocacy, or Jolene Calla, HAPs vice president, health care finance and insurance, for more information.

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