340B Drug Discount Program Advocates: "This Program Works"


On its 20th birthday, a group of prominent healthcare leaders have launched a campaign to rejuvenate the image of the 340B drug discount program.


The program allows nonprofit hospitals, as well as community health centers, hemophilia treatment centers, HIV/AIDS clinics and other similar facilities, that serve a large proportion of under- or uninsured patients to purchase pharmaceuticals from manufacturers at reduced prices.

The program continues to meet its original goal of helping safety-net hospitals make the most of scarce resources while saving taxpayers money, according to a new report and website from Safety Net Hospitals for Pharmaceutical Access, an organization comprised of close to 1,000 hospitals enrolled in the program.

The report and website come in the wake of ongoing criticism of the program. Recently, Sen. Chuck Grassley called on major program beneficiaries Duke University Health System in Durham, N.C., University of North Carolina Hospitals in Chapel Hill, N.C., and Carolinas Medical Center in Charlotte, N.C., to explain how revenue from the program has been reinvested in patient care. Sen. Grassley also launched a probe into several other participating hospitals that doled out large executive bonuses in recent years, again questioning the use of money saved through the program.

Despite criticism, the advocates of 340B remain convinced of both the benefits and necessity of the program. Ted Slafsky, president and CEO of SNHPA, along with Bruce Siegel, MD, president and CEO of America's Essential Hospitals (formerly the National Association of Public Hospitals and Health Systems) and Maggie Elehwany, vice president of government affairs and policy for the National Rural Health Association, hosted a telebriefing to raise awareness of the importance of the program, and to refute four common arguments.

1. The program does not cost taxpayers money. It saves money. "The key finding of this report is that the program saves taxpayers money," said Mr. Slafsky. The program has grown significantly since its inception, he said, and recently the Patient Protection and Affordable Care Act expanded the program's eligibility to include critical access, rural, community and freestanding cancer hospitals.      

However, according to the hospital groups, this expansion has only reduced taxpayer burden. Mr. Slafsky said that a nonpartisan appraisal of the program from the Congressional Budget Office showed that as the program expanded, government expenditures on pharmaceuticals decreased.

2. The program will not cripple the pharmaceutical industry. While these cost savings come at the expense of the pharmaceutical companies, Mr. Slafsky emphasized the small fraction of the market affected: "About one-third of the hospitals in this country participate in this program," he said, "but the program currently represents only 2 percent of the $325 billion pharmaceutical market. Even if the program doubles, it will still remain a tiny fraction of these companies' business."

3. It benefits participating hospitals. NRHA's Ms. Elehwany said the rural hospitals she represents face unique and daunting challenges. "Over three-quarters of these hospitals are in counties facing physician shortages," she said, "and over 34 percent currently operate at a financial loss." She said the program has allowed these hospitals, as well as disproportionate share hospitals across the country, to stretch their budget further and stay afloat.

"This program allows these facilities to operate and provide care to those who need it," she said.

4. It benefits patients. "It's the most vulnerable patients who benefit from this program," said Dr. Siegel. He said the program provides critical support for hospitals dedicated to caring for the neediest patients. He gave the example of Memorial Hospital in Gulfport, Miss., which is able to offer local residents affordable access to advanced cancer treatments through participation in the program, "making essential medication available to thousands of patients," he said.

"This program works," he said. "And it works well."

More Articles on the 340B Program:

Sen. Chuck Grassley Probes Georgia Health System's Use of 340B Drug Program
10 Overlooked Opportunities for Hospital Cost Savings
HRSA Delays 340B Drug Discount Rule  

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