Nov. 10, 2017—Six current and former members of Congress gathered with nearly 200 safety-net healthcare providers on Capitol Hill this week to mark the 25th anniversary of the enactment of the 340B drug discount program. In remarks during the event, Virginia and Ohio hospitals, a Texas hemophilia treatment center, Colorado’s AIDS drug assistance program, and a Maine health center described how 340B savings help them care for patients who are poor and/or coping with health conditions that can be fatal without treatment.
President George H.W. Bush signed the bill creating the 340B program on Nov. 4, 1992, requiring drug makers that participate in Medicaid or Medicare Part B to provide discounts in their prices for outpatient drugs sold to clinics, health centers, and hospitals that provide a “disproportionate share” of care to low-income patients. The legislation was approved by both houses of Congress by wide, bipartisan majorities with chief sponsors coming from both major political parties.
Over the course of its history, 340B has helped hospitals, clinics, and other outpatient facilities serve the health care needs of millions of low-income patients who would otherwise struggle to have those needs met. 340B has saved billions of dollars in drug costs that have allowed covered entities to stretch their limited resources to meet community and patient needs. In 2015, 340B discounts saved participating providers $6.1 billion.
While the 340B program has a strong track record of success, speakers at the anniversary event noted that it has often had to contend with efforts by the pharmaceutical industry to undermine the discounts. Pharmaceutical industry lobbyists have been calling on Congress to curtail the reach of the program and created faux “coalitions” to “reform” 340B. More recently, industry groups supported a new Medicare Part B regulation that will slash drug reimbursement to 340B hospitals by nearly 30 percent starting Jan. 1, 2018.
“Perhaps because of its success, 340B has been a target of attacks by special interests trying to limit its reach,” said Ted Slafsky, President and Chief Executive Officer of 340B Health, which represents hospitals and health systems in 340B and took the lead in organizing the anniversary event. “CMS’ misguided action does nothing to reduce the cost of drugs and doesn’t save money for Medicare or the millions of seniors Medicare serves and must be reversed.”
Show of Bipartisan Support
Illustrating 340B’s continuing level of support, several current and former members of Congress attended the celebration and had warm words of support for the program. In addition to 340B Health, the gathering was sponsored by The Hemophilia Alliance, National Alliance of State & Territorial AIDS Directors, National Association of Community Health Centers, National Coalition of STD Directors, and National Rural Health Association.
“When I think about the 340B program I think about the access to incredibly important lifesaving treatments this program has provided to so many people,” said Sen. Maggie Hassan (D-N.H.). “I thank you for everything you do for the health and success of your communities. I look forward to working with you to sustain the 340B program and to make it even better to deal with whatever challenges are ahead.” New Hampshire has 13 hospitals in the 340B program, including Dartmouth-Hitchcock Medical Center, the state’s only academic medical center.
Former Rep. Phil Gingrey (R-Ga.), a physician and the founder of the House GOP Doctors Caucus, noted that the 340B program “enables hospitals and others to stretch scarce federal resources as far as possible. Hands down, it is one of the best examples of how we can do this without spending more taxpayer dollars. It literally pays for itself.”
One of the chief authors of the law, former Congressman Henry Waxman, greeted guests by video as he was traveling in Israel. “In 1992, we wanted to create a program to help lower the price of drugs for safety-net healthcare providers and at the same time give them more money to extend their efforts,” said Waxman, who for many years chaired the House Energy & Commerce Committee before retiring in 2015. “Let’s celebrate and rededicate ourselves to the program.”
Reps. Peter Welch (D-Vt.) and David Loebsack (D-Iowa) and former Rep. Bart Stupak (D-Mich.) also attended. Rep. Welch, whose state has 14 hospitals in 340B including University of Vermont Medical Center, the state’s sole Level 1 trauma center, noted that 340B drug savings represent just 1.3 percent of total U.S. drug spending – in his words, “a pimple on an elephant.”
Real Help for Real Patients
At a briefing for congressional staff, 340B healthcare providers gave concrete examples of how the drug discount program enables them to stretch other dollars so they can provide better care to more patients, just as Congress intended when it created the program a quarter century ago.
Cindy Williams, Vice President and Chief Pharmacy Officer for Riverside Health System in Virginia’s Tidewater region, described how her institution saved almost $31 million by participating in the 340B in 2016 while providing more than $216 million in uncompensated care. “The program is essential to allowing us to provide services to the most vulnerable populations in our service area,” said Williams. Riverside’s main hospital in Newport News is the community’s sole provider of trauma care, neonatal intensive care, comprehensive stroke care, and inpatient oncology intensive care. “Without us, folks would have to travel an hour or more to receive these services,” Williams said.
Dr. Sherrie Dixon Williams, Director of Pulmonary Rehabilitation and Smoking Cessation Programs at the MetroHealth System in Cleveland, described how her hospital uses 340B savings to fight the opioid epidemic, help people quit smoking, and provide free transportation to patients to get them to their appointments in winter when buses aren’t always running. “We are providing very expensive naloxone kits to the community, to patients, and to family members” of people addicted to opioids and at risk of overdosing, Williams noted. 340B savings also allow MetroHealth to provide free injections of naltrexone that block opioid receptors in the brain to opioid addicts being released from prison, to increase the odds they will not relapse, she added. “This drug costs around $1,000 per monthly injection,” Williams said. “If it weren’t for 340B we would never be able to provide that to patients for free.”
Hemophilia treatments can cost $300,000 or more annually per patient, noted Marisela Trujillo, Administrative Director of Gulf States Hemophilia and Thrombophilia Center in Houston. They are medically complex and expensive patients. “340B has been critical to my [hemophilia treatment center] and other HTCs around the country,” Trujillo said. Her center uses its 340B savings, for example, to train patients to give themselves infusions at home, for classes for parents of children diagnosed with the disease, and for camps for children and retreats for adults. More recently, 340B savings went toward transportation assistance and basic needs for patients with hemophilia affected by Hurricane Harvey.
Presenters also offered a personal perspective on the importance of 340B. “I’m a 340B success story,” said Todd Grove, who manages Colorado’s AIDS drug assistance program. “I’m a person living with HIV for 30 years … While these drugs have gotten better and better, they are still an extremely expensive asset that we have to get access to, and 340B is essential to that.” Early in the epidemic, 340B savings were instrumental in helping Colorado clear long wait lists for HIV drug treatment, Grove said. “340B allows us to do more than that,” he added. “As the years have passed, we have become more active in purchasing our clients’ insurance. Now, only about 350 persons living with HIV in Colorado are not under insurance of some form.” Colorado’s ADAP is also putting 340B funds into case management, mental health and substance abuse treatment, and treatment centers in rural areas.
The 340B program is integral to the work of Penobscot Community Health Care in Bangor, Maine, in helping local residents access affordable care, said Felicity Holmsted, the health canter’s Chief Pharmacy Officer. The health center uses its savings to provide discounts on more than 50 percent of the prescriptions its pharmacies fill and to help qualified patients obtain other drug discounts straight from drug manufacturers.
PCHC is also using 340B savings to fight the opioid epidemic in Maine, Holmsted explained. 340B savings support staff training and evaluation that has led to a nearly 70 percent reduction in the center’s opioid prescribing, she said. “That’s led to a nearly 50 percent decrease in premature death,” she pointed out. The savings also have allowed to center to begin using chiropractic, acupuncture and other alternative treatments for pain management.
340B funding also helps PCHC better manage patient care such that patients are making far fewer trips to hospital emergency rooms and are far more likely to get prescriptions filled and take their medications properly. “We’ve seen more than 500 Mainers since we started this program a year ago and we’ve reduced readmission rates by 40 percent, which translated into 100 readmissions avoided,” Holmsted said. There was also a 40 percent reduction in mortality among patients who accepted the extra services versus those who declined them, Holmsted said, and PCHC has saved $1.2 million.