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“As you and your readers may now be aware, the 340B Drug Pricing Program has been under siege for the past couple months. The program requires drug manufacturers to provide outpatient drugs to eligible health care organizations at significantly reduced prices, so that those savings can be passed on to the patients and the community at large.
Henry Ford Health System is one of the largest, if not the single largest 340B entity in the nation and serves thousands of disadvantaged patients in the metropolitan Detroit and Jackson areas in Michigan every year. As Director of Finance and Contracts and 340B Compliance Officer for the System, I’d like to offer my perspective on the criticisms we’ve been hearing about the program (largely from pharma companies and organizations representing the pharmaceutical industry), along with a first-hand glimpse of how I’ve seen this program save patient lives.
On November 1, 2017, the Centers for Medicare and Medicaid Services (CMS) finalized a ruling that slashes reimbursement rates on drugs that qualify under the 340B program from the current six percent above the sale price to 22.5 percent less than the sale price—a move that is estimated to save pharmaceutical manufacturers $1.6 billion annually. The ruling went into effect January 1.
The program’s critics claim that hospitals are using the savings from the 340B program to line their own pockets or to create centers and programs that will increase hospital profit margins, and that the underserved patients are not receiving the benefits the program was intended to provide. Those of us who are on the front lines of care know a very different reality.”