Twenty-year-old program has improved lives, helped hospitals meet patient needs 

HARRISBURG, Pa. (June 11)—State hospital association leaders from Pennsylvania, New Jersey, Texas, and Michigan are taking steps to protect a federal drug discount program that helps the poor. The leaders are responding to a movement to make significant changes to the 340B Drug Pricing Program, which requires manufacturers to sell medicines at reduced prices to health care providers who treat high numbers of low-income and other underserved patients.

The association heads have sent a letter to the chairmen of the Committee on Energy and Commerce requesting that they support the program, and not make major legislative changes until pending regulations are released for public comment. Some policymakers and interest groups want to significantly reduce the benefits that eligible hospitals and their patients receive from the program.

For more than 20 years, the 340B Drug Pricing Program has provided financial relief from high prescription drug costs, allowing safety net hospitals and other eligible providers to stretch limited federal resources to reduce drug costs and reinvest savings in improved care for patients and communities. Hospitals use 340B savings to increase patient access to prescription drugs, enhance services for the uninsured or underinsured, and support cost-effective and patient-focused pharmacy services such as medication therapy management, disease management, and patient assistance programs.

Hospitals eligible for 340B Drug Pricing Program discounts have high levels of uncompensated care and narrow 3.9 percent operating margins. Approximately 2 percent of annual drug purchases are made through the 340B Drug Pricing Program, saving eligible providers $3.8 billion dollars. The program also provides significant savings to state and federal governments.

The Health Resources and Services Administration (HRSA), which oversees the 340B Drug Pricing Program, is poised to complete its regulatory process, including recommended changes to improve administrative oversight, and to invite public stakeholder input. State hospital leaders are requesting that lawmakers refrain from making complex changes and give HRSA the opportunity to complete the regulatory process.

“The 340B Drug Pricing Program is critical in supporting Pennsylvania hospitals in serving the most disadvantaged in our society and building healthy communities, particularly in the face of the increasingly high cost of pharmaceuticals,” said Andy Carter, president and CEO of The Hospital & Healthsystem Association of Pennsylvania. “HRSA already has taken steps to improve the administration and strengthen the integrity of the program, and we are eager to review forthcoming guidance.”

“New Jersey’s safety net hospitals play an essential role caring for the underserved, the disadvantaged, and the uninsured,” said Betsy Ryan, president and CEO of The New Jersey Hospital Association. “It’s a challenging mission, and the 340B program is essential in providing affordably priced pharmaceuticals for our patients. We urge lawmakers to protect this important program and ensure our hospitals and their patients receive access to the life-saving drugs they need.”