Breaking News
August 16, 2018 - Childhood exposure to secondhand smoke increases risk of COPD death in adulthood
August 16, 2018 - Scientists uncover key control mechanism of DNA replication
August 16, 2018 - NIH begins first-in-human trial of experimental live, attenuated Zika virus vaccine
August 16, 2018 - Two diabetes medications don’t slow progression of type 2 diabetes in youth
August 16, 2018 - 5 Questions: How Stanford research is making MRI scans safer for kids | News Center
August 16, 2018 - Columbia Celebrates 25th Anniversary of White Coat Ceremony
August 16, 2018 - Phonak’s new smallest and most discreet Virto B-Titanium hearing aid
August 16, 2018 - New project aims to study growth of water-based microorganisms
August 16, 2018 - New research confirms link between DDT exposure and autism
August 16, 2018 - Neurodevelopmental Anomalies, Birth Defects Linked to Zika ID’d
August 16, 2018 - Risk of heart failure up in ALVSD patients with diabetes
August 16, 2018 - Exercise reduces symptoms and fatigue in patients with chronic kidney disease
August 16, 2018 - Study reveals role of RUNX proteins in DNA repair
August 16, 2018 - New research finds no harm from average salt consumption
August 16, 2018 - Researchers develop new way of testing bacterial resistance to antibiotics
August 16, 2018 - Magnetic gene in aquarium fish could open doors to treatment for epilepsy, Parkinson’s
August 16, 2018 - Five tips for successful long-term breastfeeding
August 16, 2018 - Researchers identify brain networks involved in object naming
August 16, 2018 - Promoting HPV Vaccine Doesn’t Prompt Risky Sex by Teens: Study
August 16, 2018 - Treating Rheumatoid Arthritis: Search for a Cure
August 16, 2018 - Research shows in the long run, charcoal toothpaste likely won’t whiten teeth
August 16, 2018 - Seattle Children’s opens new clinic to provide convenient access to pediatric specialty care services
August 16, 2018 - Curious case of the lost contact lens
August 16, 2018 - GN Hearing unveils world’s first Premium-Plus hearing aid
August 16, 2018 - Parental life span linked with increased longevity and health in daughters
August 16, 2018 - Health leaders reveal ten most important medicines in NHS history
August 16, 2018 - Mobile health devices diagnose hidden heart condition in at-risk populations
August 16, 2018 - When it comes to shedding pounds, it pays to think big
August 16, 2018 - Liva Healthcare announces appointment of Thomas Cooke as clinical services manager in the UK
August 16, 2018 - New digital pharmacy aims to help people living with chronic care conditions
August 16, 2018 - Preventing ACL injuries in high school athletes
August 16, 2018 - Experts provide insight into novel concepts and approaches for stroke rehabilitation
August 16, 2018 - Scientists reverse congenital blindness in mouse model
August 16, 2018 - Study shows link between use of benzodiazepines and increased risk of Alzheimer’s disease
August 16, 2018 - Study provides new insight into how ‘trash bag of the cell’ traps and seals off waste
August 16, 2018 - Trial shows PARP inhibitor as novel treatment option for patients with advanced breast cancers
August 16, 2018 - Prenatal exposure to violence increases toddlers’ aggressive behavior to their mothers
August 16, 2018 - Can manipulating gut microbes improve cardiac function in patients with heart failure?
August 16, 2018 - Hearts of newborn piglets can completely heal after heart attacks
August 16, 2018 - Ablating the mutant p53 gene in mice with colorectal cancer inhibits tumor growth
August 16, 2018 - Higher BMI in people with prediabetes related to evening preference and lack of sufficient sleep
August 16, 2018 - Using peripheral nerve blocks to treat facial pain may produce long-term pain relief
August 16, 2018 - Neural stem cells are the key to tail regeneration
August 16, 2018 - Study compares genetic and neural contributions to ADHD in children with or without TBI
August 16, 2018 - Adding energy drinks to alcohol may exacerbate negative effects of binge drinking
August 16, 2018 - Eye Examination Can Help Detect Abuse in Children
August 16, 2018 - Know the Difference: Rheumatoid Arthritis or Osteoarthritis?
August 16, 2018 - From ‘sea of mutations,’ two possible cancer links rise to the surface
August 16, 2018 - Does medical school take too long?
August 16, 2018 - Brown University researchers reveal key physical properties of ‘giant’ cancer cells
August 16, 2018 - Regular resistance training improves exercise motivation
August 16, 2018 - Feds urge states to encourage cheaper plans off the exchanges
August 16, 2018 - Seven activities that prevent you from getting quality sleep during summer
August 16, 2018 - Five ways to tell if your baby is getting enough milk from breastfeeding
August 16, 2018 - From Pigs to Peacocks, What’s Up With Those ‘Emotional-Support Animals’?
August 16, 2018 - Breast cancers enlist the help of normal cells to help them spread and survive
August 16, 2018 - Engaging with “high-need” patients outside the clinic
August 16, 2018 - Research illuminates how online forum may offer suicide prevention support for males
August 16, 2018 - Researchers identify way to grow immune cells at large scale for preventing cancer reoccurrence
August 15, 2018 - Keck Medicine of USC’s hospitals ranked among nation’s best for the 10th consecutive year
August 15, 2018 - Researchers compare existing approaches for automating diagnostic procedures of skin lesions
August 15, 2018 - Autism risk determined by health of mom’s gut, research reveals
August 15, 2018 - WELL for Life challenges you to explore the great outdoors
August 15, 2018 - ‘Zombie’ gene protects elephants from cancer, study finds
August 15, 2018 - Ebola outbreak in Congo spreads to active combat zone
August 15, 2018 - Study highlights pollution exposure of babies in prams
August 15, 2018 - Study provides insight into link between sleep apnea and lipid metabolism
August 15, 2018 - New study focuses on promise of gene therapy for Amish nemaline myopathy
August 15, 2018 - Researchers discover new approach to alleviate chronic itch
August 15, 2018 - Uncovering the Mysteries of MS: Medical Imaging Helps NIH Researchers Understand the Tricky Disease
August 15, 2018 - Autistic people at greater risk of becoming homeless – new research
August 15, 2018 - New imaging technique can spot tuberculosis infection in an hour
August 15, 2018 - Scientists study effects of eating breakfast versus fasting overnight before exercise
August 15, 2018 - Talking with children about suicide could save lives
August 15, 2018 - Grip strength of children predicts future cardiometabolic health
August 15, 2018 - New polyclonal immunotherapy successfully neutralizes Ebola virus
August 15, 2018 - Innovative oncofertility program launched by RMA of New York and Mount Sinai Health System
August 15, 2018 - Study shows efficacy, safety of AAV5-based gene therapy to treat sheep model of achromatopsia
August 15, 2018 - Simple score helps predict which hospitalized heart attack patients are at high risk of readmissions
August 15, 2018 - New discoveries show how protein droplets do more than keep cells’ interiors tidy
Heated and deep-pocketed battle erupts over 340B drug discount program

Heated and deep-pocketed battle erupts over 340B drug discount program

image_pdfDownload PDFimage_print

The program, known as 340B, requires pharmaceutical companies to give steep discounts to hospitals and clinics that serve high volumes of low-income patients.

The Centers for Medicare & Medicaid Services struck a blow to the program this month announcing a final rule to cut Medicare payments for hospitals enrolled in the program by 28 percent, or about $1.6 billion. The American Hospital Association, the Association of American Medical Colleges, America’s Essential Hospitals and others filed suit on Nov. 13, arguing that the agency lacks the authority to slash the payments and that the rule undermines the intent Congress had when creating the program.

Several federal reports in recent years from the Medicare advisory board, as well as the Government Accountability Office and the Office of Inspector General, have evaluated 340B’s explosive growth. About 40 percent of the hospitals in the U.S. now buy drugs through the program, according to the 2015 GAO report.

Richard Sorian, of the hospital lobbying group 340B Health, said that for some small, rural hospitals the funding cut “could actually be the difference between staying open and closing.”

Northeast Ohio’s largest safety-net hospital, MetroHealth System in Cleveland, said it would see an $8 million cut in Medicare reimbursements.

In trying to explain the importance of that funding, Dr. Benjamin Li, a MetroHealth cancer surgeon, said that if the 340B program were to disappear “some of our cancer patients will not be able to have lifesaving care.”

In contrast, those supporting the cut, including drugmakers, argue that the program has grown beyond its original intent because hospitals have pocketed the discounts to pad profits — not to help indigent patients.

Stephen Ubl, president of the drug industry group PhRMA, said the program “needs fundamental reform” and that the latest rule change is merely a good first step. His group, which has deep pockets and an advertising campaign geared at pinpointing the program’s flaws, has a list of changes that Congress and the Trump administration could tackle. Those include limiting which hospitals should be eligible for 340B price breaks and making sure needy patients benefit when hospitals buy discounted drugs.

The day after the hospital groups filed suit, Joe Grogan, director of health programs at the White House’s Office of Management and Budget, called 340B “really screwed up,” according to Politico, and said the Trump administration isn’t afraid to take on the program. “We are not wimps.” Grogan led a White House task force last summer that proposed scaling back the program.

The hospitals — often the biggest employers in a congressional district — are ready for a fight. The American Hospital Association launched an advertising campaign. And hundreds of members of Congress signed a letter defending the program. On Nov. 14, two House lawmakers introduced a bill that would prevent CMS from implementing the proposed rule.

Under 340B, named after the section of the Public Health Service Act that authorizes it, eligible hospitals buy drugs at a discount from the pharmaceutical companies and then are reimbursed for those purchases from Medicare. The drugs are purchased under the Part B program, which covers expensive chemotherapy and other treatments in a hospital, doctor’s office and clinics.

The hospitals make money on the spread, using it to improve the financial stability of the hospital.

In comment letters to federal officials, a range of hospitals from St. Cloud, Minn., to Kalamazoo, Mich., said the new rule would cost them hundreds of thousands of dollars.

Yet, even as concerns arise around the impact of the cuts and a legal battle plays out, Congress has heightened scrutiny of the program. The House Energy and Commerce Committee held two hearings over the past few months, examining how hospitals use money made on 340B drugs. A key question for lawmakers was how much the patients benefited.

The new rule, according to CMS Administrator Seema Verma, addressed that concern — albeit indirectly.

While the actual price of drugs will not be lower under the rule, Verma said beneficiaries will save an estimated $320 million a year on copayments. Medicare patients typically are responsible for a percentage of coinsurance on their prescriptions. The lowered Medicare reimbursement means that an enrollee’s coinsurance would be lower at 340B hospitals because Medicare would pay hospitals less for the drug.

In one example the administration provided, if Medicare reimburses a participating hospital $2,000 a month for an individual drug, a beneficiary would save over $100 on their out-of-pocket share.

Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York, agreed.

“If Medicare reduces the reimbursement amount, that will directly reduce what the patients pay,” Bach said. “Patients will see lower prices.”

Allan Coukell, senior director for health programs at the Pew Charitable Trusts, said the change in how Medicare spends its money may have broader, unintended consequences for the health care system. Patients may change providers, seeking lower copays. Or, conversely, hospitals may drop out of the program because of lower reimbursements.

“The long-term impact of such a shift is unknown,” Coukell said, adding that one thing is certain: Fewer hospitals participating in the program simply “transfers the 340B revenue from the provider to the manufacturer.”

The 340B program wasn’t always so controversial. The bill, signed by Republican President George H.W. Bush in 1992, once had bipartisan support.

“Everyone loved the program. That’s why Congress expanded it on three separate occasions,” recalled William von Oehsen, who helped lobby for the initial law and is a founder of the hospital group 340BHealth. Most recently, the program was expanded under the Affordable Care Act in 2010.

“There was never any concern about its size until, basically, pharma decided it had gotten too big and started investing in a public relations and lobbying campaign to reform it,” von Oehsen said, adding, “We just don’t have the money they have, and it’s kind of discouraging.”

KHN’s coverage of prescription drug development, costs and pricing is supported by the Laura and John Arnold Foundation.


Kaiser Health NewsThis article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.

Tagged with:

About author

Related Articles