Politicians Prepare for Drug Discount Debate (1)

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By Jacquie Lee

Politicians are prepping for a busy week after dropping eight drafts of bills meant to address the regulatory gaps in the federal drug discount program for low-income hospitals.

Most criticism of the program, called 340B, surrounds confusion over which patients are eligible for the discounts, what sort of authority the Health Resources and Services Administration needs to regulate the program, and what data are needed to make 340B run smoothly. Those are issues the House Energy and Commerce Health Subcommittee is set to delve into during a July 11 hearing.

A large part of the hearing will likely touch on a recent Government Accountability Office report that outlines “weaknesses in HRSA’s oversight that impede its ability to ensure compliance with 340B Program requirements” and potential problems with pharmacies that contract with facilities getting the drug discounts.

340B requires drugmakers to give discounts to hospitals that serve predominantly low-income patients as an attempt to help resource-strapped hospitals take on more patients.

It was once only recognized by regulatory aficionados, but is getting greater political attention due to its exponential growth in recent years and the Trump administration’s push for fewer regulations and greater drug price transparency.

The committee will also bat around ideas regarding who should head the 340B program, how the hospitals should coordinate with pharmacies, what figures should be reported by facilities that benefit from the program, and what the audit system needs to look like to ensure each party is following the program’s guidelines.

Alex Azar, head of the Department of Health and Human Services, is also set to discuss the program July 9 at the 340B Coalition 2018 Summer Conference. Azar isn’t set to appear at the hearing July 11.

Bipartisan Support for Hearing

The discussion drafts posted on the committee’s website will help guide the members’ discussion, but the bills aren’t set in stone.

Critics and advocates of the program say they’re pleased a hearing has been scheduled, but the proposed legislation is a mixed bag—with some suggestions designed to strengthen the program and with others meant to curb it.

The Pharmaceutical Research and Manufacturers of America, the main industry group representing branded drugmakers, says it’s “ready to work with all stakeholders on how to make this program sustainable for the future.”

The group told Bloomberg Law as of July 6 it had no comments on specific draft language but said it does support the PAUSE Act, one of the bills set to be discussed at the hearing.

That bipartisan bill (H.R. 4710) temporarily pauses new hospitals from enrolling in the program until they fulfill certain reporting requirements, which would “ensure the program continues to be viable long-term, and that hospitals are adequately serving low-income and uninsured patients,” according to Rep. Larry Bucshon (R-Ind.). Bucshon introduced the bill in December 2017 with Rep. Scott Peters (D-Calif.).

340B advocates are “pleased that the Committee will be considering legislation to improve accountability and transparency for drugs sold to 340B hospitals and to roll back the ill-conceived Medicare cuts that are harming access to patient care,” according to a 340B Health statement Tom Mirga, the group’s editorial director, sent to Bloomberg Law. 340B Health is an association of 1,300 hospitals that partake in the drug discount.

According to GAO congressional testimony from May, there were more than 21,000 hospital sites participating in the program in 2017, compared to 7,800 such sites in 2013.

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