Noteworthy News

340B Program Faces Challenges, Change

A federal program that helps selected health care providers obtain discounted drugs for low-income patients they are serving on an outpatient basis may soon face major changes.

The 340B prescription drug pricing program, created more than 20 years ago to help serve low-income individuals, has come under fire in recent years in both the House and the Senate over how qualified, participating providers – disproportionate share hospitals, Federally Qualified Health Centers and their look-alikes, children’s hospitals, critical access hospitals, rural referral centers, and others – use the savings they derive from the program. While there is a general expectation that providers will use those savings to provide additional services to low-income patients, they are required neither to do that nor to discloses how they do use their savings.

Prescription Medication Spilling From an Open Medicine BottleThe House Energy and Commerce Committee held a hearing about the program this week and Congress has asked the Medicare Payment Advisory Commission (MedPAC) to look into the program as well.

In addition, the U.S. Government Accountability Office (GAO) recently published an update on the status of its 2011 recommendations for improving the program, which it found suffered from inadequate oversight by Health Resources and Services Administration (HRSA), lacked adequate criteria for determining patient and provider eligibility, and lacked controls for preventing drugs acquired through the program from being diverted to ineligible patients.

The administration has long been thought to be preparing new guidelines for the 340B program.

Virtually all non-profit urban safety-net hospitals qualify for the 340B program because of the many low-income patients they serve, so any changes in the program will be of special interest to them.

For a closer look at the issues surrounding the 340B program, see this Roll Call blog report. Find a summary of the GAO report Drug Discount Program: Status of GAO Recommendations to Improve 340B Drug Pricing Program Oversight and a link to the study itself here and a report on some of the testimony provided at the congressional hearing here.

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