29 May Modern Healthcare: Attacks on 340B program distract from source of drug-pricing problem
“Given all the good things hospitals accomplish thanks to 340B Drug Pricing Program savings—from affordable medications to comprehensive services for the poor—it might seem odd the program has taken so much heat lately.
But if you consider the larger context of the attacks—the national debate on runaway drug prices—you’ll understand why drugmakers have worked so hard to shift attention to this critical source of safety-net support. Their strategy is simple: Distract from the shell hiding the real problem—manufacturer pricing practices—by keeping your attention on 340B. But no amount of misdirection can overcome mounting evidence that drug prices lie at the root of the problem.
Recent events in Washington suggest this is not entirely lost on policymakers. On May 11, the Trump administration announced a drug pricing strategy that included proposals targeting the industry, including moving some Medicare Part B drugs to Part D. That change would be anathema to drugmakers because it gives the government additional bargaining power.
Subsequent statements by HHS Secretary Alex Azar suggest the administration won’t shrink from taking on drugmakers. Then, on May 15, a Senate hearing on 340B program oversight turned out to be as much about manufacturers’ lack of accountability and transparency as anything else.
So manufacturer pricing practices remain in the mix, and you don’t have to look far to understand why. In a recent JAMA study, researchers found per-capita U.S. drug spending to be about double that of 10 other high-income countries from 2013 to 2016. The study concluded high brand-name drug prices, not utilization, explained the difference. A Health Care Cost Institute report in January 2018 found a 110% price increase for brand-name drugs from 2012 to 2016. During that same period, federal officials say, per-dosage spending for some of the most commonly used drugs across Medicare Part B, Medicare Part D and Medicaid saw annual double-digit increases.
The future isn’t any brighter. In a March 2018 Health Affairs study of health spending from 2017 to 2026, federal actuaries said prescription drug spending is projected to outpace increases in overall healthcare spending due mostly to “faster anticipated growth in drug prices.”
But to hear drugmakers tell it, the pricing problem lies with 340B program discounts, which require no taxpayer dollars and account for a scant 1.3% of the nation’s $457 billion annual tab for drugs. They advance the implausible notion that the 340B program somehow is to blame for industry pricing practices that brought us $1,000-a-pill hepatitis C treatments and $600 allergy medicine injectors.
It’s regrettable that much of the current thinking on the 340B program flows from a steady stream of misinformation, threatening a program that successfully supports hospitals on which millions of Americans depend. Worse, all the misdirection jeopardizes real improvements to care and healthcare outcomes that stem from 340B savings.”