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

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

As the Health Resources and Services Administration (HRSA) continues to increase their role in the 340B Program oversight, they have made three modifications which will certainly affect covered entities. Even though the overall procedure continues to be mostly unchanged, recently-announced improvements to post-audit procedures will impact how covered entities learn about and reply to audit results.

In a July 2014 update, HRSA announced that it will not issue preliminary reports to CEs after an audit. Instead, covered entities will learn of audit findings when HRSA provides its Final Report.

Furthermore, are presently obligated to present HRSA a letter describing findings related to diversion and/or duplicate rebates. This letter will be posted on the HRSA web site, in conjunction with the audit findings, and is intended to notify any affected suppliers and wholesalers of potential payment they might be due. Instances of letters are currently published along with FY12 audit findings on the HRSA website.

Finally, all CEs whose results include payment will promptly be subject to a follow-up audit the next year. As HRSA continues to enhance the audit process, they will likely publish additional updates here.

More information from CenterRx

CenterRx Offers 340B Virtual Inventory Management Services

CenterRx - 340B Solutions
CenterRx offers inventive pharmacy delivery strategies for the flourishing market of federally qualified community health centers servicing America's most at risk populations. We are completely aware of the 340B laws by virtue of our partnership with, Feldesman Tucker Leifer Fidell LLP, top counsel for 340B as it pertains to FQHCs.

Comprehensive 340B Solution
CenterRx offers a totally thorough 340B program. The processor-centric model is developed to leverage the existing pharmacy infrastructure in place throughout America. We team up with eligible entities and their specific 340B business needs.

Virtual Inventory
The CenterRx virtual inventory system eliminates the need to manage distinct 340B physical inventories. As medicines are dispensed to eligible patients, our system monitors this utilization virtually and re-supplies drugs to contracted pharmacies at the 340B discount price.

True-up Design
As a part of its processor-centric model, CenterRx has developed a complete financial reconciliation process, consisting of all invoicing and claims reconciliation. Applying the claims information either through the switch or through CenterRx POS, CenterRx manages all billing and financial reconciliation on behalf of the FQHC. CenterRx supplies clients with an every three months true-up report.

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340B "MegaRule" on the Way

In 1992, the US government informed drug companies they needed to provide steep rebates to health centers that treat a large percent of poor patients. This government program, designed to enable certain safety-net healthcare facilities and medical clinics to save cash on pharmaceutical purchases is under fire from critics, who say the facilities are using that money for profits instead of aid patients.

The legislation received bipartisan support and it was a benefit for healthcare facilities and the federal government. In the ten years that followed, the drug discount program has certainly grown in leaps and bounds. But this spring as the feds have been composing fresh rules for the program, a battle royal has broken out between medical facilities and drug companies who say the program, named 340B, is now puffed up and poorly regulated.

"A federal program designed to allow certain safety-net hospitals and clinics to save money on drug purchases is under fire from critics, who say the facilities are using that money to pad profits rather than help patients. The 340B drug-pricing program lets thousands of hospitals, community health centers and family-planning clinics buy outpatient prescription medications from manufacturers at an estimated 25 to 50 percent discount. Participants can then charge higher rates to insured patients and keep the additional revenue." Read More 

Sometimes, rather than passing on drug discounts to individuals, medical centers offer the medicines at higher prices to their insured patients. The hospitals use the profits to finance clinics, personnel and additional services that the healthcare facilities point out benefit everybody. The law allows them to do that, the medical facilities point out, due to the fact that it's a means to stretch "scarce federal resources"-- a phrase which is in the law.

These obvious abuses have the drug manufacturers on the offensive. "Everyone sees this as a cash cow," says Maya Bermingham, vice president and senior counsel at Pharmaceutical Research and Manufacturers of America, a drug-industry business organization. "You can actually make money off of this program, and that was not really the intent of the program when it was originally formed.".

"The U.S. Dept. of Health & Human Services is moving forward with its plan to allow certain hospitals to receive discounts on orphan drugs when they are used for non-orphan conditions despite a court ruling that said the agency did not have the authority to do so." Read More

For all the disagreement, both equally the medical centers and the pharmaceutical manufacturers agree that the federal government ought to define or re-write the 340B rules. A new court judgment had brought into question whether the new rules would be introduced, but the federal Health Resources and Services Administration that supervises 340B is actually expected to introduce those new rules this month.