By: Brandon M. Macsata, CEO, ADAP Advocacy Association
The pharmaceutical industry and other interest groups have lobbied Congress to "reform" the
340B Drug Pricing Program, which they claim is riddled with waste, fraud, and abuse. Abound are damaging audits and reports that certainly back up the claim, except this over-generalization can be dangerous. Whereas hospitals are the program's primary participating vendors, there are many other smaller entities that also leverage the discounts on prescription drugs to assist their clients. No better example exists than the Ryan White covered entities, including Ryan White clinics, State AIDS Drug Assistance Programs (ADAPs), and other safety net providers.
The Health Resources and Services Administration (HRSA) summarizes the 340B Drug Pricing program as follows:
"The 340B Drug Pricing Program requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices. The 340B Program enables covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. Eligible health care organizations/covered entities are defined in statute and include HRSA-supported health centers and look-alikes, Ryan White clinics and State AIDS Drug Assistance programs, Medicare/Medicaid Disproportionate Share Hospitals, children’s hospitals, and other safety net providers."[1]
It is understandable why the drug manufacturers — most of which are required by law to to provide significant discounts (20-50%) off drug pricing— would be concerned about the growth of the program. Total sales under the program increased from $1.1 billion in 1997 to more than $7 billion in 2013,
[2] and quickly climbing toward $20 billion. There are plenty of shenanigans with hospitals boosting their profits rather than providing supports and services for low-income and uninsured patients.
[3] A recent study concluded, “
Our findings support the criticism that the 340B program is being converted from one that serves vulnerable patient populations to one that enriches hospitals and their affiliated clinics.”
[4]
Some in Congress are also alarmed. Senator Charles E. Grassley (R-IA) is chief among them, arguing a few years back, "
Congress needs to know the extent to which the agency believes it lacks the statutory authority to ensure that hospitals use the 340B program to help the uninsured receive affordable prescription drugs. Medicare and private insurance are paying much more for some drugs than the hospitals paid because of the program discount. Congress needs a full picture of how hospitals are using the program and how their uses affect other programs in the health care system.”
[5]
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| Photo Source: Brendan Smialowski/Getty Images |
But there is an age-old saying, "
Don't throw the baby out with the bathwater."
Earlier this year, Harish Thiagaraj authored a detailed report on how AIDS Service Organizations (ASOs) — some of which are Ryan White covered entities — have served as the poster child for the success of the 340B Drug Pricing Program. Thiagaraj accurately notes that proposed "reforms" to the program would leave such HIV entities largely untouched,
[6] but there is no guarantee that harmful changes, or unintended consequences couldn't result from the programmatic reforms targeting large hospitals.
The study concludes:
"Those in the 340B industry realize that the 340B Drug Discount Program runs much more deeply than lower cost prescriptions. It provides treatment for those who are seriously ill. Its savings go towards valuable community services. Its creation was born out of necessity, and program growth directly correlates with better health and outcomes, which the Ryan White clinics’ achievements exemplify."[7]
Thiagaraj's assessment couldn't be more accurate, and we applaud him. Ryan White covered entities participating in the 340B Drug Discount Program have contributed to achieving viral suppression, and more needs to be done. The savings are re-invested back into the clinics, thereby allowing them to offer much needed supports and services to their clients.
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| Source: Wellpartner |
That said, it is important that the integrity of the program is protected.
"The 340B program has been challenged since its inception," summarized Jeffrey R. Lewis, President and Chief Executive Officer at Legacy Health Endowment. "The challenge today is to ensure that the program is operating the way Congress intended. To accomplish this, Legacy Health Endowment will be organizing a national commission to recommend specific ways to ensure the long term solvency of the 340B program, and to determine what changes may need to be made to ensure that the program does not exceed its Congressionally mandated purpose."
Next month this issue will be discussed at the ADAP Advocacy Association's
AIDS Drug Assistance Program Regional Summit in Raleigh, North Carolina. "Ryan White & 340B Drug Access" is one of the topics on the agenda with leading policy stakeholders concerned about the future of the program, and potential impact on patients living with HIV/AIDS and other underserved populations.
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[1] Health Resources and Services Administration (2017). 340B Drug Pricing Program. U.S. Department of Health & Human Resources. Retrieved from: http://www.hrsa.gov/opa/index.html.
[2] Vandervelde, Aaron (November 2014). GROWTH OF THE 340B PROGRAM: PAST TRENDS, FUTURE PROJECTIONS. Berkley Research Group. Retrieved from: http://www.thinkbrg.com/media/publication/524_Vandervelde_340B_GrowthDrivers_WhitePaper_20141202_FINAL.pdf.
[3] Adamopoulos, Helen (2014, October 7). Are hospitals abusing the 340B drug discount program? New study reignites controversy. Becker's Hospital CFO. Retrieved from: http://www.beckershospitalreview.com/finance/are-hospitals-abusing-the-340b-drug-discount-program-new-study-reignites-controversy.html.
[4] Myers, Nan (2016, May 31). Concerns Persist about the 340B Program. Pharmacy Times. Retrieved from: http://www.pharmacytimes.com/news/concerns-persist-about-the-340b-program.
[5] Sen. Charles Grassley (2013, October 13). Grassley: Questions Continue About 340B Discount Drug Program. United States Senate. Retrieved from: https://www.grassley.senate.gov/news/news-releases/grassley-questions-continue-about-340b-discount-drug-program.
[6] Thiagaraj, Harish (2017, January 18). The 340B Drug Pricing Program Success Story: Ryan White HIV Entities," 2017. Wellpartner. Retrieved from: http://wellpartner.com/wp-content/uploads/2017/01/WP_TPL_ThoughtLeadership_RyanWhite.pdf.
[7] Thiagaraj, Harish (2017, January 18). The 340B Drug Pricing Program Success Story: Ryan White HIV Entities," 2017. Wellpartner. Retrieved from: http://wellpartner.com/wp-content/uploads/2017/01/WP_TPL_ThoughtLeadership_RyanWhite.pdf.
