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HAP Commends New Federal Effort to Strengthen 340B Drug Pricing Program

June 12, 2018

New legislation, the Stretching Entity Resources for Vulnerable (SERV) Communities Act, makes important enhancements that strengthen the 340B Drug Pricing Program. The 340B program helps hospitals stretch scarce resources to better serve vulnerable patients and communities particularly as the price of prescription drugs places an increasing financial burden on patients and hospitals. 

The 340B program allows health care organizations that care for large numbers of uninsured and low-income patients, serve rural communities, and offer vital services to cancer patients and children to purchase outpatient drugs at discounted prices.

Health care providers reinvest those savings to meet their communities’ health care needs, including by offering financial assistance to patients unable to afford their prescriptions and supporting clinical pharmacy services, such as disease management programs or medication therapy management.

The SERV Communities Act affirms the intent of the 340B Drug Pricing Program is “to stretch scarce resources as far as possible, reaching more eligible patients and providing more comprehensive services” and clarifies that the discounts can be used in a variety of ways to help vulnerable patients access quality medical care and to improve population health.

The legislation would also improve the integrity and transparency of the 340B program by requiring the Secretary of Health and Human Services to audit both providers of care and drug manufacturers equally, as well as disclose critical pricing information.

In an effort to enhance the ability of health care providers to address the opioid crisis, the bill would allow Substance Abuse and Mental Health Services Administration grantees to participate in the 340B program and take advantage of the financial relief from high prescription drug costs.

Importantly, the bill would also reverse a payment rule that took effect on January 1, 2018, which imposed a nearly 30 percent cut in Medicare reimbursement to many 340B hospitals, undercutting the benefit of the 340B program. This is consistent with legislation introduced last year, H.R. 4392, which has earned the support of 11 members of the Pennsylvania Congressional Delegation.

A section-by-section overview of the SERV Communities Act, a fact sheet, and the legislative text of the bill provide more information.

HAP commends this new legislation which reinforces the importance of the 340B program in helping hospitals balance the increasing burden of ever-increasing drug costs; safeguards the program’s long-term sustainability; and promotes program integrity by enhancing 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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