Fix 340B drug discount program to increase patient access to treatment

As Americans continue to face a changing health care environment, much of the focus remains on legislative and executive actions around insurance reforms. But as costs continue to rise, two factors have largely escaped public criticism — hospital consolidation and abuses of the 340B drug discount program. 

Hospital consolidation — when a major hospital purchases surrounding hospitals, small health centers, and physician offices — is happening across the United States.

{mosads}Each time a hospital or health-care system buys a smaller competitor, health care in that area is increasingly monopolized, a practice that only hurts patients.

When patients have no options, hospitals can charge whatever they want for medicine and treatments. This is happening more and more due to abuse in the 340B program.

340B works by requiring drug manufacturers to offer a steep discount on their products when selling to enrolled hospitals and health centers. The program was signed into law in 1992 and is intended to help safety-net providers that serve uninsured or vulnerable patients reduce outpatient prescription drug costs.

At the National Infusion Center Association, we are concerned monopolized health care will take away affordable options from vulnerable patients. This especially impacts patients in rural areas where health care options are already limited.

Infusion centers provide vital treatment to patients and are often more convenient than hospitals. Office-based infusion providers offer competitive pricing for the most effective drugs on the market, but are increasingly unable to compete with large hospitals, in part due to the profits hospitals generate through abuse of the 340B program.

Hospitals, many of which are in wealthy areas, qualify for the drug discount program due to ambiguous regulations, but are not required to treat or pass discounts on to vulnerable or uninsured patients. This allows hospitals to pocket the savings, creating an uneven playing field for infusion centers trying to offer care to those in need.

Enrollment in 340B has soared — 12,722 health-care entities were enrolled in the program as of Oct. 1, 2017 according to a January report by the House Energy and Commerce Committee. That was up from 583 covered entities in 2005.

While those enrollment numbers are significant, they don’t reflect the program’s total reach. If each satellite location was counted individually, the number of covered entities would be more than 42,000. With that many sites across the U.S. patients should be benefitting.

But data shows that in reality rapid expansion of the program has made it impossible for regulators to manage and has allowed hospitals to exploit loopholes, hurting patients to generate profit.  

Because the rules are so loosely written, qualifying hospitals can extend 340B savings to other consolidated locations which would not normally qualify for the program. Infusion centers following both the letter and the spirit of the 340B rules are being left behind and patients suffer the consequences.

Thankfully, Congress is currently considering two bills which would reform 340B and close loopholes that allow bad actors to abuse the program. The 340B PAUSE Act (340B Protecting Access for the Underserved and Safety-net Entities Act), introduced by Reps. Larry Bucshon (R-Ind.) and Scott Peters (D-Calif.) in the House, would pause new hospitals from enrolling in 340B for two years and improve transparency by requiring enrolled hospitals to follow strict reporting requirements.

The Senate is considering a separate bill, the HELP ACT (Helping Ensure Low-income Patients have Access to Care and Treatment), introduced by Sen. Bill Cassidy (R-La.). The HELP Act accomplishes the same goals as the PAUSE act, but would also grant oversight agencies more power to define some of the program’s vague terms and close loopholes that allow hospitals to use the program for profit.

When asked by Sen. Cassidy during a recent hearing on his proposed reforms, a spokesman for the 340B hospital industry refused to say whether they would support a change in the law that would require providers to pass on the discounted drugs, or the discount itself, to uninsured or underinsured patients. That unwillingness to do the right thing underscores why a legislative solution is needed.

By passing these bills, Congress would be sending a clear message that health-care providers cannot game the system. Providers, drug manufacturers, community health, infusion centers, and patient advocates all support improvements to the program. We must act to ensure the 340B program actually helps our nation’s sickest and most vulnerable citizens and no longer restricts their access to affordable treatments.

Brian Nyquist is the executive director of the National Infusion Center Association.