Leading experts from key sectors discuss challenges in 340B Drug Discount Program

Leading health care policy experts from community health centers, patient and clinician specialty groups, industry organizations and academic institutions convened yesterday to discuss challenges in the federal 340B Drug Discount Program, and the importance of preserving aspects that truly serve vulnerable, uninsured and underinsured patients. In a meeting organized by the Alliance for Integrity and Reform of 340B (AIR 340B), the diverse group of stakeholders reviewed new research detailing the rapid growth and impact of the program, and assessed pressing issues for the 340B program as it moves forward.

While the program is essential to the ability of certain health care facilities to serve medically at-risk communities, participants agreed that the rapid expansion of 340B has created unintended, negative consequences for some patients, physicians and payers. Regulatory and legislative reforms would ensure that the program can thrive for the institutions that depend on it to serve their needy patient populations.

Commander Krista Pedley, Director of the Office of Pharmacy Affairs at the Health Resources and Services Administration (HRSA), gave the keynote address and commended the Summit as a "rare opportunity to speak to such a diverse group of stakeholders." Commander Pedley reviewed some of the compliance and oversight activities underway, and expressed willingness to work together with stakeholders to ensure the 340B program is operating in the most efficient, transparent manner.

In the day-long meeting, participants discussed differences between traditional 340B public health entities, such as Ryan White HIV clinics, hemophilia treatment centers and community health centers, and the public and private non-profit hospitals participating in the program. Many participants applauded the mechanisms imposed on HRSA-grantees as a condition of their grant to pass the program benefits on to vulnerable patients and provide transparent reporting on how program savings are used to benefit patients. Participants discussed whether the program could be better aligned if hospital-based covered entities were required to meet similar patient-centric and accountability mechanisms, and if a more appropriate eligibility metric was set that clearly identifies hospitals that are actually providing significant charitable care. Health economist Donald Moran pointed to the inherent financial incentive for hospitals, noting, "340B has become a statutory mechanism for price arbitrage, and there is little evidence that the beneficiaries of this arbitrage are using those dollars to help needy patients."

Several participants highlighted the negative impact of 340B on community-based oncology practices. Aaron Vandervelde of the Berkley Research Group presented a new BIO-funded study showing the large numbers of 340B hospitals—likely motivated by the increased revenues generated by the 340B arbitrage— acquiring community-based oncology practices, which can have an array of negative consequences for patients. Murray Aitken of the IMS Institute for Healthcare Informatics noted that 340B hospitals are expanding by acquiring growing numbers of community oncology practices. Aitken cited new IMS data showing that when cancer care is shifted from community care sites to 340B hospitals, costs of care rise 189 percent. He asserted that increased costs, when borne by patients, may also disincentivize adherence to their treatment regimes.

Summit physician-participants addressed recurring challenges in the 340B program. Dr. Jeffery Ward, immediate past chair of the American Society of Clinical Oncology's (ASCO) Clinical Practice Committee and current chair of their Payment Reform Workgroup, said ASCO "had concerns about the 340B program" that "demanded attention," and described a recent ASCO policy statement and its recommendations for improving the 340B program. As the program has expanded to roughly a third of all U.S. hospitals, Dr. Ward said, "We have seen an expansion of the program beyond its original intent." Ward urged, "The program needs reform so that resources go to the patients that need them, regardless of the setting." Florida oncologist Dr. Michael Diaz, a member of the Board of the Community Oncology Alliance, argued that hospital acquisitions have shifted care to hospitals where costs are higher and access is reduced, forcing patients to pay higher co-pays and travel farther for their treatment. Dr. Diaz indicated he saw hospital changes in patient care that seemed to be driven by hospitals' desire to maximize 340B revenues, rather than by the patients' therapeutic needs.

All participants agreed that continued discussion among stakeholders is needed to ensure the 340B program remains viable. Throughout the constructive discussion a framework began to emerge for bringing 340B back to its original intent as a vital safety net for uninsured and underinsured patients. Many participants urged policy reforms on Capitol Hill and in the federal agency that would address program challenges, including:

• Clearer guidance for the definition of the term "patient" to ensure that 340B entities use the program to support the needs of the most medically underserved patients;
• Full and transparent accounting for all cost-savings derived from the 340B program; and
• Revised hospital eligibility criteria to ensure 340B discounts go to the facilities that are taking care of medically underserved patients and providing appropriate levels of charity care.

Participants lauded the Summit as a very successful, open dialogue, and many commented that they appreciated hearing new perspectives they had not heard previously from other 340B stakeholders.