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U.S. House Committee Releases Review and Recommendations for 340B Drug Pricing Program; HAP Advocates to Safeguard Key Program

January 11, 2018

Stemming from a multi-year review of the 340B drug pricing program, the U.S. House Energy & Commerce Committee has issued a report that summarizes the committee’s findings and lays out a series of policy recommendations. 

The report—Review of the 340B Drug Pricing Program—asserts that improvements are needed with respect to oversight and administration of the program.

The 340B program allows certain eligible health care providers to obtain outpatient drugs at discounted prices. In turn, the 340B drug pricing program helps participating providers expand and improve access to care.

Conclusions in the report are drawn from activity by the committee over the last two years including stakeholder meetings, three Congressional hearings, and document requests. 

The findings outline the Health Services and Resources Administration’s (HRSA) concerns with the administration of the program. These concerns include the fact that HRSA:

  • Has not fully implemented regulations in a timely manner
  • Has inadequate regulatory authority to promote compliance and program integrity

Additionally, the committee report:

  • Includes findings with respect to program compliance by eligible entities and drug manufacturers and limitations in the audit process 
  • Speaks to the underlying intent of the program, and the current statutory framework of the program

The report identifies twelve specific policy recommendations:

  1. HRSA should soon finalize and begin enforcing regulations in areas in which it currently has regulatory authority
  2. Congress should give HRSA sufficient regulatory authority to adequately administer and oversee the 340B program
  3. Congress should require certain eligible entities to conduct independent audits of program compliance, and should determine what such audits should assess and evaluate
  4. All eligible entities should perform independent audits of their contract pharmacies at regular intervals
  5. Congress should equip HRSA with more resources and staff to conduct more rigorous oversight and more effective management of the 340B program
  6. Congress (and Health and Human Services to the degree possible) should take steps to identify and reduce duplicate discounts for drugs paid for under Medicaid managed care
  7. Congress should evaluate whether the permissible scope of HRSA’s audits should be expanded to cover other features of the program
  8. HRSA should work toward ensuring that it audits eligible entities and manufacturers at the same rate
  9. Congress should clarify the intent of the 340B program
  10. Congress (or HRSA where HRSA already has authority to make such changes) should promote transparency in the 340B program, including ensuring that eligible entities and other relevant stakeholders have access to ceiling prices and requiring eligible entities to disclose information about annual 340B program savings and/or revenue
  11. Congress should establish a mechanism to monitor the level of charity care provided by eligible entities and provide for a clear definition of charity care such that the data can be used to fairly compare care provided across entities 
  12. Congress should reassess current program provider eligibility standards (serving a large percentage of Medicaid and low-income Medicare inpatients) to determine whether a metric based on outpatient population would be more appropriate

The 340B program allows hospitals in Pennsylvania 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.

HAP continues to work to educate federal policymakers about the importance of the 340B drug pricing program for hospitals in Pennsylvania, and assist patients across the Commonwealth in understanding how the 340B program helps patients in need

HAP will advocate for Congress to:

  • Safeguard the long-term sustainability of the 340B drug pricing program
  • Solidify the important benefits of the program, which play a key role in helping hospitals balance the increasing burden of ever increasing drug costs

Congress should promote program reforms that enhance transparency and accountability without placing onerous hardships on hospitals providing care to vulnerable patient populations. 

For more information, contact Laura Stevens Kent, HAPs vice president, federal advocacy, or Jolene Calla, HAP’s vice president, health care finance and insurance.

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