Is 340B Working?

by Admin | July 9, 2013 6:57 am

Yes.

Multiple reports show that safety net health care providers use 340B savings just as Congress intended:

The Government Accountability Office (GAO) found in a September 2011 study that all 340B entities it interviewed reported using their 340B savings in ways that were consistent with the program’s intent.
A June 2011 study by Safety Net Hospitals for Pharmaceutical Access (SNHPA) found that 340B hospitals use program savings to help vulnerable patients by reducing the price of drugs for low-income patients, increasing patient access to pharmacy services, expanding the selection of drugs available to patients, enhancing pharmacy and other health care services, and serving more patients, especially those who are indigent or otherwise vulnerable. The vast majority of these hospitals say that if they did not have access to 340B discounts, their uninsured and underinsured patients would see higher drug costs.
A 2004 Mathematica Policy Research report commissioned by HRSA categorized how entities used their savings. It found that entities that focused on a specific aspect of health or disease–family planning, STD, TB, and HIV clinics and Ryan White grantees–all devoted the largest share of savings to increasing the number of patients receiving care. Community health centers and migrant health centers were most likely to devote a significant portion of the savings to reducing the price of medication for their patients. Entities with the highest median spending on prescription drugs—disproportionate share hospitals and hemophilia treatment centers—devoted the greatest share of their savings to offsetting losses from providing pharmacy services at less than cost. Tribal contract and urban Indian health centers also devoted the greatest share of their savings to the same purpose.

The 340B program benefits taxpayers as well as patients. The Congressional Budget Office (CBO) has consistently projected that proposed expansions of 340B would generate savings for the federal government.

340B critics often express dismay that safety net health care providers may dispense or administer 340B-discounted drugs to insured patients, implying that doing so is contrary to Congressional intent. Nothing in the 340B law even remotely suggests that these providers must use 340B drugs for uninsured patients only. Purchasing drugs at lower costs allows them to stretch their limited resources and depend less on taxpayer support. The GAO has said that using drugs purchased at the 340B price for patients who are not poor, uninsured, or underinsured is permissible. The U.S. Department of Health and Human Services (HHS) has said that if 340B providers were unable to access savings by using discounted drugs for insured patients, there would be little incentive to participate in the program. The HHS Inspector General has said it is appropriate for Medicare Part B payments to 340B hospitals to be the same as for non-340B hospitals.

Critics say the program’s growth is unwarranted. In fact, growth in the number of 340B safety net health care providers is the result of deliberate, policy-oriented actions taken by Congress in recognition of the important role these caregivers play in their communities. Even after Congress expanded the program in 2010 to hundreds of rural hospitals, HRSA has said the newly-eligible entities only account for 10 percent of all 340B drug-purchasing volume. Overall, 340B drug spending remains a tiny percentage of the total U.S. drug market. Total annual drug spending in the U.S. is approximately $320 billion. 340B only accounts for $6 billion to $7 billion of that amount, or just about 2 percent of the market.

340B will also continue to be needed even after health care reform is fully implemented. More than 30 million people will remain uninsured and tens of millions will remain underinsured. Safety net hospitals will continue to care for all patients regardless of their payer status or ability to pay. They are highly dependent on 340B savings to serve their vulnerable patients, and this dependence will continue after 2014.

Critics say the 340B program is to blame for the financial troubles of community pharmacies and oncologists. While it is true that community pharmacies and oncologists are facing marketplace pressures, 340B is far from the driving force and, in some cases, it may be helping to turn the tide. For example, many local independent pharmacies actually benefit from 340B by partnering with safety net health care providers enrolled in the program. As for community oncologists, a recent study found that only 8 percent of spending on oncology drugs by surveyed practices and institutions was through 340B. Moreover, private practice oncologists can—and often do—turn away patients who cannot pay. Patients then turn to safety net hospitals or clinics that provide care to all.

Can 340B be improved? Of course. But is it “broken,” as some of its critics say? Absolutely not.

Source URL: https://340binformed.org/2013/07/is-340b-working/