340B Program Lobbying Intensifies As Midterms Near

The 340B Drug Discount Program (“340B Program”) was created by Congress in 1992 to help low-income people obtain needed drugs. The 340B Program requires that drug manufacturers provide certain outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. Now sixteen years after the 340B Program’s inception, both sides of the political spectrum as well as hospitals and Big Pharma are pressing for changes to the program. As the lobbying intensifies between hospitals and drug manufacturers, it is unclear what substantial changes the program may undergo.

The chasm separating hospitals and drug manufacturers on the 340B Program’s issues only widened after the Trump administration cut Medicare Part B payments across the board beginning in January 2018. Since the new cuts took effect, legal and political setbacks have been building for hospitals within all three branches of government. Hospitals have been holding firm on their stance of refusing to negotiate on proffered changes to the 340B Program, reasoning that any such negotiation would lead to harmful cuts. On Capitol Hill, however, it is yet to be seen if such a stance will keep any suggested changes to the program from gaining momentum. Lobbyist efforts and pressure on lawmakers from hospitals reportedly have made many lawmakers skeptical about whether there is currently any real chance for new regulation to make it through the Senate. However, several proposed bills currently being considered in the House of Representatives include provisions that, if passed, would drastically reduce 340B Program income for certain hospitals. Some of the provisions in the proposed bills include tying the discount received to a hospital’s uninsured patients (with carveouts for rural, critical-access and vulnerable disproportionate-share hospitals), enhancing the program’s audit requirements, and mandating that certain 340B Program providers pass on all savings received from the discounts directly to their low-income patients.

Meanwhile, drug manufacturers want to sell more of their drugs at full price and have fewer sold under the 340B discount.  Manufacturers also claim that hospitals are using the money saved in discounts to enrich themselves rather than help the low-income patients the 340B Program is designed to assist, and lobbyists for the manufacturers are hard at work stressing these points on Capitol Hill.

To further complicate any movement on legislation related to the 340B Program, midterm elections are fast-approaching and man lawmakers are hesitant to make too much of a commitment to a decision that either hospitals or Big Pharma will be opposed to. Both hospitals and Big Pharma remain optimistic that the midterm elections will be kind to their positions and that the aftermath of those midterms will be the lawmaker support needed to affect real change in the 340B Program. However, only time will tell. If you have any questions about the 340B Program or possible changes being proposed for the program that may affect your business, it is important that you contact a healthcare regulatory attorney well-versed in 340B regulation.