November 17, 2009 - With the U.S. Senate poised to begin debate on health care reform, advocates of the 340B drug discount program are trying to regroup after the House leadership unexpectedly removed a long-sought extension of the program to the inpatient setting.
On Nov. 7, the House passed its health care reform legislation to provide access to health care for most of the nation's 46 million uninsured Americans. To the disappointment of 340B hospital advocates, however, the House bill dropped the inpatient measure many had thought would be a shoo-in after it was included in the House Energy and Commerce Committee's version of the bill in July.
Supporters of the 340B inpatient provision quickly jumped into action once news of the House bill broke.
Within 48 hours of the bill first being released, 31 House Democrats signed a letter sponsored by Reps. Bobby Rush (D-Ill.) and Carolyn Maloney (D-N.Y.), requesting that House leadership restore the 340B inpatient language in the bill before sending it to President Obama to be signed.
When the House bill still passed without the 340B language, several representatives who supported the health care reform bill immediately expressed regrets that the inpatient language didn't make it.
"The inpatient and outpatient setting serve the same low-income population that the 340B drug Pricing Program was designed to assist," noted Rep. Maloney in a statement. "At a minimum, extending the (program) to inpatient drugs would reduce inpatient drug costs by 15 percent…This is not the time to deprive safety-net hospitals from millions of dollars in savings needed to treat the most vulnerable in our communities."
Rep. James Oberstar (D-Minn.), chairman of the House Transportation and Infrastructure Committee, also expressed disappointment. Read Rep. Oberstar's statement, along with other comments he made on the bill, here.
PhRMA: "The fairest way to proceed."
But an industry spokesman noted that the House bill offers other provisions that will strengthen — and expand — the 340B program, already a $5-billion market for discounted drugs.
"There is a longstanding, historical distinction between outpatient settings and inpatient settings in the 340B discount program," Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America, told BNA Daily Health Care Daily Report. "By keeping 340B eligible providers confined to the outpatient setting, the House bill is consistent with the original intent of the 340B program to treat low-income, uninsured people. And, we believe that is the fairest way to proceed."
Bill Includes Other 340B Measures
The House will have another opportunity to restore 340B inpatient provisions to health care reform. The House is now waiting for the Senate to approve its version of the legislation, which does include a 340B extension to the inpatient setting. Once that happens, the House and Senate must merge their two bills and approve the compromise language before the bill is signed into law by the president.
Indeed, the news wasn't all bad for 340B stakeholders. The House bill included provisions to extend the discount to additional entities such as critical access hospitals, rural referral centers, sole community hospitals, and freestanding children's and cancer hospitals.
It would also create new integrity provisions for the 340B program, including defined sanctions and fines for drug manufacturers and covered entities that knowingly violate 340B guidelines.
The Health Resources and Services Administration, meanwhile, would be required to develop a dispute resolution process to quickly resolve pricing issues between covered entities and drug manufacturers.
The House bill also:
Still, the omission of the inpatient extension came as a big surprise to safety-net hospitals — and it couldn't have come at a worse time for cash-strapped providers forced to do more with less.
"We're trying to be as lean as we possibly can and still provide excellent service to patients," said Vincent Giambanco, director of procurement and operations at New York City Health and Hospital Corp. "Any extra savings would help us reach our patient outcome goals faster and that means the public would save money in the end, too."
The New York City health system has estimated that it would save $25 million annually if the 340B discount were extended to the inpatient setting.