We posted last week that the E&C Committee held a hearing July 18, 2017, with witnesses from the Office of Pharmacy Affairs, the Government Accountability Office and the Office of Inspector General. The purpose of the hearing was to review HRSA’s oversight of the 340B Drug Pricing Program, and how the program specifically impacts patients, providers, manufacturers and other stakeholders.
At current issue is the drastic expansion of the 340B program through an increase in eligibility to additional categories of hospitals, the quadrupled number of participating unique covered entities (hospitals and child sites), number of contract pharmacies and amount of savings on 340B drugs. Additionally, despite the expansion, annual HRSA audits remain steady, at or below 200 since 2012 and the audit findings show a “high level of non-compliance by covered entities” in the areas of duplicate discounts, incorrect reporting and diversion to ineligible patients and facilities. You can find our recap of the hearing in part 1 of this blog series. You can also view the entire two-hour hearing HERE.
In summary, the committee aimed to examine:
How has HRSA’s oversight changed to reflect the growth of the 340B program in recent years?
How effective is HRSA’s oversight in detecting and resolving non-compliance with 340B program regulations?
Does HRSA currently have the regulatory authority it needs to successfully oversee the 340B program?
How has the 340B program affected patient care?
Key Takeaways and Recommendations:
All members of the subcommittee spoke positively on the importance and necessity of the 340B program. Many members highlighted specific instances in their constituencies where the 340B program made a large and favorable impact on the community. It is recommended that continued advocacy and promotion of the positive impact of 340B by all covered entities is paramount.
One repeated concern from the subcommittee was the lack of stipulation in the statute for how 340B savings are used by the hospitals, either to pass on savings directly to the patients, to expand patient services or to provide reduced or free services to those unable to pay. It is recommended that covered entities document in great detail the amount of 340B savings and how their savings are used to benefit their patients and the community. With greater calls for transparency and compliance by Congress, it is feasible that this inquiry will continue to resurface thus any supporting documentation will be beneficial for the covered entity.
One subcommittee member, Diana DeGette (Colorado), suggested the committee bring in hospital representatives for an additional hearing to hear directly how the savings are utilized. Stakeholders, including hospitals, patients, and advocacy groups should be allowed testimony prior to any final decisions on the 340B program which might impact them.
Many subcommittee members were in favor of granting HRSA broader authority over the 340B program, Congressional clarification on HRSA’s authority to classify patient and hospital definition, and manufacturer pricing policies. One subcommittee member asked if there was specific language to use in proposed legislation and Captain Pedley stated she will look into it to provide the preferred language. It is recommended that when the potential legislation is brought before the committee and Congress, that 340B covered entities be sure to comment on the potential broadened HRSA regulatory authority over the 340B program to aid in program clarification.
The greatest discrepancy among subcommittee members was on the correlation of 340B and the rising cost of drug prices. Some Republican members stated there was a direct correlation while many Democratic members stated high drug prices have no correlation to the 340B program. They also argued that CMS’s proposed rule which would dramatically reduce Medicare Part B reimbursement to 340B hospitals would have drastic and unfortunate consequences for the safety-net hospitals and their communities. All comments to the proposed rule must be submitted by September 11, 2017 HERE, we strongly recommend that all covered entities submit comment.
As stated above, there could potentially be a second hearing involving hospital stakeholders and their use of 340B savings. We will be sure to keep you updated and you can rest assured that we will post a recap of any subsequent hearings. Don't miss our next post. Subscribe to our blog by clicking the image below.
