Recently, the Pharmaceutical Research and Manufacturers of America (PhRMA) submitted comments in response to the Senate 340B working groups’ request for information on ways to “ensure the 340B program has the stability and oversight needed to continue to achieve the original intention of serving eligible patients.”
In its response, PhRMA reiterated its support for the 340B drug pricing program as Congress intended. However, PhRMA noted how Congress can address some of the problems that exist in the program, particularly the way it can sometimes result in “misaligned incentives and a lack of benefit for patients.” The recommendations made in the PhRMA response largely fell into three buckets: (1) make sure the program reaches low income and vulnerable patients; (2) ensure safety-net entities are participating in the program; and (3) institute stronger accountability measures.
Make Sure 340B Reaches Low-income, Vulnerable Patients
PhRMA noted that the “340B program of today is unrecognizable in both character and size when compared to the targeted program Congress originally created” and that while the program was initially built to support grantees and frontline safety-net providers, hospital use of 340B has become vastly concentrated among disproportionate share hospitals (DSHs) and there is no guarantee that patients are the ones benefitting from the “significant discounts” that manufacturers provide on medicine.
To that end, PhRMA recommended that Congress clarify who qualifies as an eligible “patient” of a covered entity to whom benefits must be delivered and require all covered entities and contract pharmacies to pass through 340B discounts to reduce out-of-pocket costs for eligible patients based on their ability to pay.
Ensure True Safety-Net Entities Are Participating in the Program
PhRMA also noted that while non-profit status is required for a non-governmental hospital to participate in the 340B program, a significant share of hospitals that participate in the program provide less charity care than non-340B hospitals. In fact, PhRMA notes, two-thirds of DSHs that participate in 340B provide below-national-average levels of free and reduced-cost treatments to uninsured or low-income patients, when compared to all hospitals.
Therefore, PhRMA made the following recommendations:
- Hospitals participating in the program should be required to provide charity care to uninsured, low-income and other vulnerable patients. These hospitals should also be prohibited from engaging in aggressive medical debt collection with respect to these patients. These requirements should also apply to hospitals’ offsite outpatient facilities.
- Contract pharmacy policies should only be considered as part of comprehensive changes that address patient affordability and program integrity concerns. There should also be limits on how contract pharmacies are able to profit from the program.
Congress should prohibit for-profit corporations, like pharmacy benefit managers and for-profit chain pharmacies, from profiting off the program.
Institute Stronger Accountability Measures
Transparency and accountability are often recommendations made to help bolster and improve government programs. In the comments, PhRMA made the following recommendations with respect to transparency and accountability: (1) Congress should require covered entities to report basic information and make that information public, including how much charity care is provided at each 340B hospital and each of their offsite facilities; (2) create a clearinghouse for claims-level data to help ensure 340B discounts are being properly claimed, that all stakeholders are operating in a compliant manner, and that low-income and vulnerable patients are benefiting; and (3) Congress should require HRSA to issue revised audit guidelines and provide necessary data that enable manufacturers to conduct appropriate covered entity oversight.
PhRMA also recommended providing HRSA with “ongoing, dedicated funding that is sufficient to support the agency’s oversight of covered entities through audits and other activities targeted at known program integrity risks.”