Pharmaceutical costs climb as the pharmaceutical industry targets the 340b program

The drug industry is trying to thwart a crucial federal drug discount program called 340B that serves to help healthcare facilities and community health centers across the country supply lower-cost medications and enhanced services to underserved patients.

The industry's profiteering has garnered the interest of Congress, insurance companies and patients. Per-unit costs on specialty drugs increased 12 percent last year, according to Express Scripts. A database organized by Bloomberg News shows the constant price increases of leading drugs throughout the previous 7 years. An EpiPen for allergic reactions climbed 222 percent. A single dosage of the medicine Benicar for hypertension is up 164 percent. The high-cholesterol drug Crestor jumped 103 percent each tablet.

Against this backdrop, the drug industry has marshaled an army of lobbyists to go to battle against poor, underserved Americans and the medical facilities that serve them. Congress created the 340B drug discount program in 1992 with bipartisan support to enable health providers that serve large numbers of low-income individuals to obtain affordable drugs from drug companies. Consequently, these safety-net health centers and clinics supply low-priced or no-cost medications to the community. The program also helps fund diabetes, HIV/AIDS, cancer, dental and primary-care facilities.

Affordable drugs are the key to improving wellness outcomes. When drug costs get too high, individuals skip doses or pass up buying prescriptions altogether. According to a study from the Commonwealth Fund, the United States leads the world in this respect, with one-quarter of adults choosing to go without their medications. Their wellness often deteriorates, and several end up back in the ER, mostly on the taxpayer's dime.

Everybody concurs, even John Castellani, CEO of the industry trade association PhRMA. In a recent interview with Kaiser Health News, he said individuals' "out-of-pocket expenses are potentially so high that we have to be concerned about whether or not people will be able to afford to continue to get their medicines.".

In fairness, Castellani was actually grumbling about high prescription deductibles in a few plans furnished under the Affordable Care Act. But what about the destructive impact of his own industry's expensive medications? Here, Big Pharma dodges accountability and conveniently selects profits over people.

With too much partisan squabbling in Washington, it is vital to keep in mind there actually are programs that not only function but enjoy bipartisan backing. The 340B program is one of them. Yes, the program is funded at the expense of extra profits by the drug companies. More important, it allows health centers and clinics to assist poor Americans stay healthier, and it actually saves taxpayer money by keeping people out of the hospital.

Big Pharma will assert that several medical facilities don't provide adequate charity care and should not be in the program. That's rubbish. It ignores the massive $28 billion in unremunerated treatment these providers bear each year to care for the underprivileged.

The 340B program helps safety-net health centers provide economical prescriptions and treatments to disadvantaged outpatients. Pharmaceutical companies are definitely raising their prices. As the cost of drugs soars, the program becomes more essential than ever. If we do not stop the pharmaceutical industry's attempts to kill it, the casualties will be America's poor and the hospitals that treat them.

www.center-rx.com/340b/pharmaceutical-costs-soar-drug-industry-attacks-340b-discount-program

Health and Human Services Delays the 340B 'Mega Rule'

The HHS Health Resources and Services Administration has withdrawn sweeping rules for the 340B drug pricing program and instead plans to provide proposed guidance addressing vital policy issues starting in 2015.

Last year, Pharmaceutical Research and Manufacturers of America submitted a lawsuit challenging a final HHS regulation that broadened the 340B drug discount program. PhRMA filed the suit in an attempt to omit all drugs with an "orphan" designation-- a pharmaceutical that has been developed specifically to treat a rare condition and frequently carries a hefty cost-- from the final rule. U.S. District Judge Rudolph Contreras ruled in favor of PhRMA, finding HHS doesn't possess the power to place policies into place which implement Patient Protection and Affordable Care Act 340B provisions.

However, HRSA consequently re-issued the policy that enables 340B-covered entities to buy orphan drugs at 340B rates when orphan drugs are used for any indicator apart from dealing with the rare disease or condition for which the drug received an orphan classification. In October, PhRMA filed an additional suit seeking to revoke the interpretive rule HRSA issued.

With HRSA opting to ditch what many in the sector are referring to as a "mega rule," health centers, health systems and pharmaceutical companies will have to wait to be given more direction regarding the program. HRSA declared there will be an opportunity for the public to discuss the guidance it issues, and American Hospital Association Executive Vice President Rick Pollack said "The AHA looks forward to working with HRSA on its efforts to improve the 340B drug pricing program, which is vital to so many vulnerable patients and communities.".

340B Aides Our Most Vulnerable Citizens

In a June 23 "Viewpoint" article titled, "Hospitals Making Hundreds Of Millions Off Program For Poor," Sally Pipes labelled the 340B drug discount program's eligibility criteria slack and indicated hospitals are not making use of the savings appropriately.

In reality, the program is crucial to the fiscally vulnerable safety net that helps millions of needy Americans receive healthcare each year.

The debate pits the drug industry with $329 billion in U.S. profits versus the financially extended not-for-profit and public hospitals that look after millions of poor individuals.

Recently, the dubious price increases for several drugs have received the attention of Congress, state governments, insurance companies and patients. A Bloomberg News database reveals that the price hikes in the U.S. for leading prescriptions have actually significantly outpaced inflation since late 2007.

An IMS Institute for Healthcare Informatics analysis discovered "a significant driver of growth in the market was price increases on protected brands, which contributed $20 billion to growth in 2013, up from $15.6 billion in 2012." This does not allow for the much-publicized high prices for new drugs such as Sovaldi for hepatitis.

Against this backdrop of soaring prices, the pharmaceutical industry is seeking to maximize profit margins by reducing accessibility to reduced rate medication and service via the 340B program.

Our lawmakers established the program in 1992 with bipartisan backing to enable health providers that help millions of low-income individuals to acquire discounted medicine from pharmaceutical companies. Consequently, these types of safety-net medical facilities and clinics offer affordable or free medicine to the community.

The program also funds medical clinics for diabetes, HIV/AIDS, cancer, dental and primary care.

The law categorically enables safety-net hospitals to distribute discounted medications to qualified patients and to sell them at negotiated prices to insured patients. Congress meant for these financial savings to maximize funds by improving low reimbursement levels from the Medicare and Medicaid programs to finance the services required to treat the underserved. This mechanism is hardly misuse-- it is precisely the way the program was designed.

To be qualified for the 340B program, a medical facility has to meet the stringent qualification requirements of serving a high percentage of low-income and impaired patients or of being situated in rural areas of the country. These covered entities must annually sign an agreement certifying that they fulfill these requirements.

Our lawmakers, in a bipartisan manner, has broadened the program to additional providers so as to confine the necessity for escalated federal funding in order to sustain the health care safety net. Despite having more Americans insured under the healthcare overhaul, medical facilities that have Medicare and Medicaid programs as their primary payers will certainly struggle to serve the remaining uninsured or underinsured.

www.center-rx.com/340b/340b-drug-discount-program-assists-vulnerable-citizens

HHS Reissues Contested 340B Policy on Orphan-Drug Discounts

In spite of an adverse court judgment, the federal government is retaining its stance on how safety-net healthcare providers may obtain discounts on drugs that might have "orphan" uses.

On July 21, HHS published a document it called an interpretive rule on the exclusion of orphan drugs from the 340B discount program. The policy takes effect without delay. The announcement follows a May court verdict which shot down the HHS's authorization to release a substantive rule regarding whether or not pharmaceuticals with a rare-disease or orphan classification could be attainable at a rebate to health centers for non-orphan uses.

The HHS stated in the document it has been notified by safety-net healthcare providers or covered entities "that some of the newly-eligible covered entities are significant purchasers of drugs with an orphan designation, and if these drugs were excluded from the 340B Program entirely, it is not clear if there would be sufficient financial benefits to participate.".

The pharmaceutical sector has contested the Obama administration's interpretation of a provision in the Patient Protection and Affordable Care Act, asserting that the administration didn't possess the jurisdiction to publish the legislative rule in 2013. The Pharmaceutical Research and Manufacturers of America, the pharmaceutical industry's lobbying organization, filed a claim against HHS in 2013, and a federal judge ruled against HHS in May. The government, however, took the stance that the ruling authorized it to reissue the exact same policy in a different framework.

The new version of the rule, posted to the Federal Register on July 21, requires drug companies to offer markdowns between 20 % and FIFTY % on orphan drugs used for non-orphan ailments or diseases to freestanding cancer hospitals, critical-access hospitals, rural referral centers and sole community hospitals that take part in the 340B program.

A spokesperson for PhRMA stated the organization's stance hasn't changed and it continues to think that the Health Research and Services Administration, which oversees the 340B program, doesn't possess the jurisdiction to issue rulemaking with regard to the regulation.

Meanwhile, the regulation is considered a victory for safety net hospitals that participate in the 340B drug pricing program. Orphan pharmaceuticals are among the most expensive pharmaceuticals on the market and discounts on these types of treatments may be a contributing reason why several health centers sign up in the 340B program.

"The agency's position on this issue has been correct all along," said a spokesman for Safety Net Hospitals for Pharmaceutical Access, a trade organization that stands for healthcare facilities that take part in the 340B program. "Orphan drug discounts are essential to helping these healthcare providers treat underserved patients.".

The intent of the 340B program is to provide reduced rates on covered outpatient drugs to health centers that service a large number of uninsured or indigent patients. The health centers may then keep the financial benefits, or revenue, from the discounts. Read More