Hospitals look to reform 340b drug discount program

     Jaimy Lee

    Posted: July 9, 2013 – 6:45 pm ET- Modern Health
    Safety net hospitals issued recommendations Tuesday for reforming the federal 340b drug discount program, which was designed to help clinics and hospitals serving the poor and uninsured but has become controversial because of alleged misuse by some hospitals.The recommendations included increased transparency of 340b prices and how hospitals use 340b savings, audits of drug manufacturers and more scrutiny of contract pharmacies that participate in the program. They were released by the Safety Net Hospitals for Pharmaceutical Access, a trade group that represents more than half of the participating 340b hospitals.

    Roughly one third of the nation’s hospitals participate in the 340b program, and that growth has fueled a debate about reforming the decades-old program.
    The 340b hospitals that buy the deeply discounted medications and the pharmaceutical companies that are required to sell them at up to a 50% discount separately have called for “reforms” that include federal audits of the drugmakers and new rules about how hospitals can use 340b savings. Both camps say they would like to better target the money saved for serving indigent patients.The 340b program has been around since the early 1990s, and legislation has expanded the number of eligible healthcare providers several times.Hospitals in the program can buy covered outpatient drugs for all eligible patients, not only those who are poor or uninsured, and then use savings generated from purchasing the discounted medications to enhance patient care and services.But critics of the program say that some hospitals are upselling the discounted drugs to patients covered by Medicare and private insurers, which can help boost profits for the hospitals, and that some uninsured and indigent patients may not be receiving any direct benefits from the program.

    SNHPA said Tuesdays that the program is operating as Congress intends it to.

    “The 340B program strengthens the healthcare safety net, allowing vulnerable patients to access medicine and healthcare services they need to stay out of the hospital,” SNHPA President and CEO Ted Slafsky said in a news release. “Without the 340B program, many safety net hospitals would have to limit services or even close their pharmacy doors. As a result, patients would lose access to healthcare and communities would suffer.”

    SNHPA and an alliance of trade groups representing drug manufacturers and others both have recently published websites addressing concerns about the 340b program.

    The Alliance of Integrity and Reform—composed of drug companies and organizations, oncology groups and a pharmacy benefit manager—in May established 340breform.org, which argues 340b savings should be used to directly boost access to medication for indigent and uninsured patients.

    “PhRMA believes in the importance of the 340B program, but recognizes the need for improving and refining the safety net program to ensure that it is helping those it was intended to help, namely uninsured indigent patients,” Matt Bennett, PhRMA’s senior vice president of communications, said in a statement. “While there remains a need for this safety net program, there are rising concerns about the program in its current form.”Read more: