Campaign Launched Against PhRMA’s Proposal to Raise Drug Costs on America’s Seniors
Washington, D.C., Nov. 13, 2018—An ad campaign launched today on President Trump’s favorite television morning news program urges the President to reject proposed changes to a vital federal drug discount program that would undo one of his greatest domestic policy achievements – providing America’s senior citizens with hundreds of millions of dollars of savings on prescription drugs.
If the Department of Health and Human Services (HHS) were to adopt big drug companies’ proposed changes to the federal 340B Drug Discount Program, many Medicare beneficiaries will experience a huge increase in out-of-pocket expenses for drugs to treat cancer, rheumatoid arthritis, and other serious chronic diseases.
The ad by 340B Matters began running Nov. 13 on the Fox News program Fox & Friends. It warns the President about harmful “reforms” to the 340B program that big drug companies have proposed to HHS Secretary Alex Azar. “President Trump, please don’t let Secretary Azar roll back 340B and raise prices on us,” a senior in the ad asks the President.
A Trump administration regulation that took effect Jan. 1, 2018 reduced what the government pays many hospitals in the 340B program for drugs covered under Medicare Part B. For most services covered for under Part B, Medicare pays 80 percent of its approved charge and seniors pay the other 20 percent in coinsurance. As a result of the Trump administration regulation, today seniors pay far less out-of-pocket for Part B drugs administered at many 340B hospitals than they would for identical drugs at other facilities. President Trump personally touted this accomplishment in the White House Rose Garden on May 11, 2018 when he announced his Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.
Example: A drug costs $1,000. At a 340B hospital where Part B drug reimbursement was cut, a senior’s Part B out-of-pocket expense would be $155.00. At a different hospital or a physician’s office, a senior would pay $212.00 for the same drug – a 36 percent increase.
Relief for Seniors Under Threat
When the Trump administration released its Blueprint, it invited public comment on the 340B program.
The drug industry trade group Pharmaceutical Research and Manufacturers of America (PhRMA) suggested on pages 79-85 of its comments on the Blueprint that HHS should “promptly” update its 340B program guidance to redefine who is considered a patient for 340B discount purposes; tighten eligibility criteria for hospital off-campus outpatient facilities; limit hospitals’ use of contract pharmacies; tighten eligibility for disproportionate share hospitals; and create new mechanisms to stop or prevent providers from purchasing a medicine at a 340B discount that also generates a Medicaid rebate claim.
If 340B is “reformed” on the terms PhRMA outlined in its response to the President’s Blueprint, there will be far fewer hospitals in the program and far fewer seniors eligible as patients in the program. This would force American senior citizens who currently receive care at 340B facilities to get care at non-340B facilities, where they would pay more out-of-pocket for Medicare Part B drugs. Financial relief on prescription drugs for Medicare Part B beneficiaries would evaporate. Under PhRMA’s proposal, America’s seniors would pay more for their prescription drugs, and big drug companies would reap the financial benefits of increased drug prices on entities and patients who are no longer eligible for the program.
340B Matters urges President Trump to side with America’s seniors, not with PhRMA. He should heed our seniors’ call and refuse to let Secretary Azar and big drug companies roll back 340B and raise seniors’ drug prices.
What is the 340B Program?
Under the 340B law, to participate in the Medicaid and Medicare markets, drug companies have to give certain safety-net hospitals, health centers, and clinics a break on outpatient drug prices. The providers save money up front on drugs and can earn money downstream billing government and private payers for 340B-purchased drugs. The program helps them pay for critical services – free and discounted medicines; medication therapy management; patient counseling, transportation, and translation services; care for cancer, HIV/AIDS, and opioid addition; neonatal care; and more. It also helps offset hospitals’ uncompensated care. According to independent researchers, 340B discounts totaled $6 billion in 2015. That was just 1.4 percent of total U.S. drug sales ($433 billion) and just 1.9 percentof drug manufacturer net revenues ($317 billion).