Are 340B drug discount programs at risk of being cut?

Hospitals and other advocates for health systems are joining forces to maintain a federal program that offers discounts on certain outpatient drugs.

They also say they are fighting what they describe as a deceptive effort led by the pharmaceutical industry to covertly gut the program.

The American Hospital Association, America’s Essential Hospitals, the Association of American Medical Colleges and others are trying to stave off efforts to slash the 340B program. The program provides discounts on certain outpatient drugs for hospitals that care for a high percentage of patients from underrepresented communities, including minority groups and those with lower incomes in urban and rural areas.

Health systems fear that the changes would lead to fewer hospitals being eligible for the program, and they say it would hurt efforts to treat patients in vulnerable communities. They contend drug companies are working to protect their profits.

“Hospitals are critical components of the health care safety net, and they work with community health care providers to deliver a wide range of care to patients in need,” the hospital groups said in a joint statement. “Without access to 340B discounts, it will be more difficult for patients to receive the same level of care from their community health providers.”

Other advocates joining the effort include 340B Health, the Children’s Hospital Association, the Catholic Health Association of the United States, and the American Society of Health-System Pharmacists.

Hospitals and the pharmaceutical industry have clashed for years over the size and scope of the 340B program for some time. Some critics contend the program has grown beyond its intended purpose and say some of the discounts on drugs aren’t getting to patients.

Earlier this month, the Pharmaceutical Research and Manufacturers of America (PhRMA) and the National Association of Community Health Centers and others said they were coming together in an effort to modernize the 340B program.

The Alliance to Save America’s 340B Program, dubbed ASAP 340B, says the group of unusual partners is coming together to offer practical solutions and more transparency to the program.

In a statement earlier this month, National Association of Community Health Centers Interim President and CEO Rachel Gonzales-Hanson said, “We believe it’s time for an honest conversation about the good that 340B can deliver and the reforms needed to ensure we can continue to serve the safety net for generations to come.”

Stephen J. Ubl, president and CEO of PhRMA, said in a statement, “This partnership marks a historic, united step toward improving the 340B program, and we encourage policymakers and other stakeholders to join us.”

The American Hospital Association and its partners are pushing back, saying it is “deceptively branded as an effort to save 340B,” even though they seek to remove many hospitals from the program.

Hospitals won a much-anticipated case in the U.S. Supreme Court last year over federal reductions to the 340B program. In a 9-0 ruling, the high court found the government didn’t follow statutory requirements in making cuts to the program, which amount to about $1.6 billion annually. In the opinion, Justice Brett Kavanaugh wrote, “340B hospitals perform valuable services for low-income and rural communities but have to rely on limited federal funding for support.”

Health systems say they’ve been disappointed over the delays from the U.S. Department of Health & Human Services in devising a remedy in light of the court ruling.

Now, hospitals are bracing for the potential of changes to the 340B program, which they say would hurt health systems and patients.

“Because 340B cuts would leave fewer hospital resources to help pay for uncompensated and unreimbursed care, this proposal would be especially harmful to patients who are uninsured, underinsured, and dependent on public health programs, such as Medicaid,” the American Hospital Association and other health groups said.

More than 20 drug companies have scaled back their discounts in the 340B program, the hospitals and health groups said in their letter. Some hospitals say they are losing millions of dollars due to the diminished discounts.

With Republicans regaining control of the U.S. House of Representativs in January, some analysts expect lawmakers may want to take a look at the scope of the program.

Lisa Kidder Hrobsky, the American Hospital Association’s senior vice president of advocacy and political affairs, told Chief Healthcare Executive® in a January interview that hospitals are ready to make their case to lawmakers about the value of the 340B program.

“The program is an important safety net for hospitals,” she said, adding, “We’re happy to talk about the program and what it means for hospitals and health systems.”

Editor's Note: This article was first published by Chief Healthcare Executive.