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U.S. House Hearing Reviews Policy Impacting the 340B Drug Pricing Program

July 11, 2018

In a hearing before the U.S. House Energy and Commerce Health Subcommittee, federal lawmakers explored the purpose and administration of the 340B Drug Pricing Program; reviewed federal oversight and compliance; and garnered feedback on policy proposals.

The hearing provided a forum for discussion about 15 specific legislative proposals that would make changes to the 340B program.

In two panels of witnesses, federal lawmakers heard testimony on conclusions and recommendations laid out in oversight reports by the U.S. Government Accountability Office (GAO), and also, gained the perspectives of health care providers that have direct experience with the 340B program which allows certain health care organizations to purchase outpatient drugs at discounted prices.

The 340B program serves as a crucial tool for hospitals to stretch scarce resources to better serve vulnerable patients and communities across the Commonwealth, particularly as the price of prescription drugs places an increasing financial burden on patients and hospitals. 

HAP has advocated for Congress to review policy in the context of the following goals:

  • 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
  • Promote program reforms that enhance transparency and accountability without placing onerous hardships on hospitals providing care to vulnerable patient populations

Legislative proposals subject to conversation touched on a variety of issues including:

  • Overturning the nearly 30 percent payment cut for certain outpatient drugs purchased under the 340B program
  • Clarifying the intent of the program and enhance program integrity
  • Closing the loophole that limits the orphan drug exclusion under the program
  • Limiting the reach of the program by establishing a moratorium on the registration of certain new 340B hospitals and raising the threshold for eligibility to qualify
  • Requiring the submission of reports and information on savings from discounted prices
  • Imposing the payment of a user fee
  • Implementing the Government Accountability Office's recommendations relating to 340B contract pharmacies
  • Augmenting the administration of the program and increasing program audits

Earlier in the week, U.S. Department of Health & Human Services Secretary Alex Azar spoke at the 340B Coalition summer meeting in Washington, DC. In his remarks he cited the Administration’s intention to pursue two kinds of reforms:

  • Greater transparency surrounding how these discounts are being used
  • Reducing the gap between discounted prices and the reimbursement provided, particularly by government programs

The 340B program is subject to significant policy discussion in Washington.

In the context of the policy conversation surrounding drug pricing, HAP has urged federal policymakers to recognize that taking action on shortsighted policies, such as reducing benefits of the 340B Drug Pricing Program, does nothing to address the underlying causes of continually increasing drug pricing. In fact, it actually makes it harder for hospitals to manage high drug costs and help patients.

HAP continues to work to educate federal policymakers about the importance of the 340B Drug Pricing Program for hospitals in Pennsylvania, and to be sure patients across the Commonwealth understand how the 340B program helps patients in need.

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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