The Future of 340B Rests with Congress

Leading hospital trade groups recently announced they are willing to seek a legislative solution to update the 340B Drug Discount Program. The move, years in the making, is timely and we applaud the effort.

Why do we support it?  Because it’s now undeniable that the current impasse between safety-net healthcare providers and the pharmaceutical industry can only be resolved by congressional action. Despite community health centers partnering with pharma as we noted in a previous blog, they too continue to be hit with negative policy changes, just like the hospitals.  While the 340B Program has been incredibly successful, the existing 340B statute has ambiguities that the pharmaceutical industry has used to its advantage.

What the program needs now is clarity.

On the ground, the most pressing issue is hospital relationships with nearby community pharmacies. Traditionally, these community pharmacies provided 340B medicines to outpatients, and the savings helped hospitals extend services to uninsured and underinsured patients. Two years ago, drug companies illegally began refusing 340B discounts to these pharmacies, leading to a shortfall of more than $6 billion for hospitals. Several cases are moving through federal courts regarding this issue.

The American Hospital Association and 340B Health (representing safety-net providers) have both indicated they will support new language under development by Rep. Doris Matsui (D-CA) that addresses the community pharmacy issue. It is gratifying to know 340B hospitals will have a seat at the table – and therefore be less likely to end up on the menu. We don’t yet know the details, but we wholeheartedly support the effort to find a solution that is consistent with the principles we announced during the 340B Coalition Conference in March.

Other bills are in the mix. Rep. Larry Bucshon (R-IN) has sponsored H.R. 3290, which we oppose.  We agree that more sunlight is needed but it should shine on all aspects of 340B – including the pharmaceutical companies – not solely safety-net healthcare providers.

Hospitals have resisted reopening the 340B law for decades, and we understand the reluctance.  Most have been afraid that any tinkering on Capitol Hill would lead to cutbacks in a program that’s vitally important to their safety-net missions. But the time has come for Congress to remove the ambiguities it could not have foreseen in 1992 and to put this important program on solid statutory ground.

A legislative update is the right way to go.