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March 2015


340B Drug Pricing Program Questioned by Congressional Subcommittee






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The House Energy & Commerce Health subcommittee held a hearing on the 340B Drug Pricing Program to "review the functionality of the program to ensure it is meeting its intended goals." Hospitals, the pharmaceutical industry, and other program participants must be prepared for changes to the program, as the Health Service Resources Administration (HRSA) intends to issue program guidance later this year. HRSA also intends to issue a Notice of Proposed Rulemaking that will address civil monetary penalties and drug ceiling prices within the 340B program. The Energy & Commerce Committee may revisit HRSA's statutory authority over the 340B program and the hearing is an indication of the committee members' thoughts on the program's administration as well as the committee's oversight role.

Titled "Examining the 340B Drug Pricing Program," the subcommittee hearing included testimony from the Health Resources and Services Administration, the Government Accountability Office and the Department of Health and Human Services Office of the Inspector General.

Committee Chair Rep. Joe Pitt (R-PA) commented during the hearing that greater oversight and transparency of the 340B program is needed to ensure that the program is preserved and is functioning as Congress intended. Created in 1992, the 340B Drug Discount Program requires drug manufacturers that participate in Medicaid to provide discounted outpatient drugs to eligible health care organizations that provide care to uninsured, low-income populations.

Rep. Fred Upton (R-MI), who is the Full Committee Chair, and other Republicans noted that the program had grown significantly since the Affordable Care Act's enactment and that recent findings from the GAO and OIG are concerning. Republican members of the subcommittee also communicated concern that hospitals could not account for any savings from the program and that the money was being used outside of the intent of the program. Rep. Gene Green (D-TX), the ranking member of the subcommittee, however, expressed that the 340B program is an important safety net to providers and that it helped expand access to care for underserved populations. Rep. Green and Rep. Frank Pallone (D-NJ) did agree, however, that proper oversight of the program is needed if it is to continue to function and support the mission of safety net providers.

Reps. Marsha Blackburn (R-TN) and Renee Ellmers (R-NC) also made opening statements. Blackburn said she was concerned about the accuracy of HRSA's oversight of the 340B program and about HRSA's definition of an eligible 340B patient. Ellmers noted that HRSA does not monitor how 340B entities are using the savings generated by the program and that more transparency is needed for the 340B program to be accountable. No other subcommittee members made opening statements.

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* Law360, March 2014
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