WASHINGTON – House lawmakers on Tuesday floated reforms to a controversial drug discount program serving low-income populations, but it’s still unclear which policies will come to fruition and how.
The 340B program requires drugmakers to offer discounts to some pharmacies that contract with hospitals and healthcare systems serving low-income communities. But pharma companies have become concerned in recent years that hospitals and healthcare systems are taking advantage of the program by increasing the number of contract pharmacies and pocketing the savings.
House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) said Tuesday she’s concerned about loopholes that lead participating healthcare systems to prescribe biosimilars at a lower rate, and that it’s unclear how hospitals reinvest the 340B savings.
“Let me reaffirm once more that I support this program in its original intent and mission,” Rodgers said.
Ranking member Frank Pallone (D-NJ) opined that Republicans should have brought drugmakers to testify, and someone from the Health Resources and Services Administration, which oversees the program but has faced criticism.
The trade group PhRMA has been outspoken against the 340B program, asserting that the 340B hospitals prescribe higher-cost drugs and promote provider consolidation.
Lawmakers went back and forth with witnesses over potential policies to make the 340B program more transparent.
William Smith, a senior fellow at the public policy research firm the Pioneer Institute, said that individual hospitals should be required to report how much revenue they’re saving through the 340B program and disclose how much they spend on charity care.
“The goals of the Congress in creating the 340B program were very worthy, bringing credible innovations and discovery supply laboratories as well as quality health care services to disadvantaged populations who otherwise could not afford them,” he said. “I urge Congress to return to this program, these important goals.”
But hospitals and healthcare systems see it a different way.
Matthew Perry, president and CEO of Genesis Healthcare System in Ohio, told lawmakers that the program shouldn’t impose restrictions on how the savings from the program are used because hospitals find their own ways to redistribute the savings.
“We can create resources where our patients need them the most,” he said. “It is critical that this flexibility continues.”
Lawmakers have been working on some legislation in recent months to get reforms passed.
A group of Republican lawmakers on the House side introduced a bill last Tuesday that seeks to rein in how hospitals use the 340B program, including allowing HHS to audit how health systems are using it and creating a definition of patients that are covered under the program.
On the Senate side, lawmakers are considering a draft bill that would institute user fees for participating systems and prohibit manufacturers from limiting which drugs are covered, though the bill has yet to be formally introduced.
As Congress weighs its own adjustments, drug manufacturers have taken to the courts over the past few years to attempt to reform the system, including a lawsuit from Novartis last week seeking to walk back a law that requires drug makers to contract with an unlimited number of pharmacies. PhRMA also filed suit in West Virginia last week, according to Reuters, over a new 340B-related law that went into effect in March.
Editor’s note: A previous version of this story incorrectly stated that the 340B bill introduced last week was bipartisan. The story has been corrected.