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Analysis

Hospital CEOs Urge Congress to Protect 340B

By John Commins  
   October 03, 2018

Stakeholders call the 340B program 'a tremendous success' as Congress considers legislation that would raise the eligibility threshold and cut the number of eligible hospitals in half.

CEOs representing more than 700 hospitals in the 340B drug pricing program are urging Congress to protect their discounts.

In a letter this week to U.S. House and Senate leaders, the CEOs said that recent proposals to cut back the 340B program would worsen the high prices charged for drugs.

"We are concerned about recent regulatory actions that have reduced the reach of this vital program and by legislative proposals that would undo more than two decades of bipartisan work to preserve the healthcare safety net," they said.

The 340B requires drug makers to provide discounts to hospitals and other healthcare providers that serve high volumes of low-income or rural patients.

The CEOs did not identify specific threats to the 340B program, but their letter was delivered as Congress considers legislation that would raise the eligibility threshold for 340B hospitals, which safety-net advocates say would cut participation in half

The hospital CEOs in their letter to Congress called the 340B program "a tremendous success story."

They note that 340B hospitals represent 38% of all acute-care hospitals but account for 60% of all uncompensated care. In addition, they note that the program discounts represent less than 2% of drugmakers' revenues, and supports safety-net care at no cost to taxpayers.

"Because of the savings from 340B, we are able to offer vital but often money-losing services including obstetrics, trauma care, opioid addiction treatment and HIV/AIDS care," the letter said. "In many rural communities, 340B savings are the difference between hospitals staying open and closing."

Critics say the 340B program is deeply flawed, ultimately leads to higher drug costs for consumers, and creates perverse incentivizes for hospitals to drive up treatment costs and increase profits.

A June audit by the Government Accountability Office found lax oversight of the 340B program by the Department of Health and Human Services' Health Resources and Services Administration.

HHS Secretary Alex Azar told the 340B Coalition Summer Conference in July that reforms were coming for the program, but reassured the advocates that 340B-covered providers who responsibly invest their savings have nothing to fear.

John Commins is a senior editor at HealthLeaders.


KEY TAKEAWAYS

CEOs representing more than 700 hospitals in 50 states urge Congress to save 340B.

Critics contend that hospitals are gaming the program, and consumers are footing the bill.

Congress is considering legislation that would raise the threshold for 340B eligibility.


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