Matsui, McKinley, DeGette, Gianforte, Welch, Johnson Lead Bipartisan Effort to Stand Up for Hospitals, Clinics Serving Low-Income Patients

Bipartisan Letter to HHS Secretary Expresses Concerns About Recent Attacks on the 340B Drug Pricing Program

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WASHINGTON, D.C., September 14, 2020 | George Hatamiya (916-201-5412) | comments

WASHINGTON, D.C. – Today, Congresswoman Doris Matsui (D-CA), as well as Reps. David B. McKinley, P.E., (R-W.Va.), Diana DeGette (D-CO), Greg Gianforte (R-MT), Peter Welch (D-VT), and Dusty Johnson (R-SD), led a group of 243 Members of Congress in sending a letter to the United States Department of Health and Human Services (HHS) Secretary Alex Azar, requesting an immediate response is taken to ensure covered entities, including disproportionate share hospitals, children’s hospitals, Ryan White clinics, community health centers, and other safety net providers continue to receive crucial 340B drug discounts.

Recently, several large drug manufacturers announced that they will limit or restrict 340B pricing to certain covered health care entities. These providers rely on savings from the 340B Drug Pricing Program to ensure access to medication for low-income patients and vulnerable communities.

“The 340B program helps us provide comprehensive care to people who have suffered lifetimes of inequity in health and life,” said WellSpace Health CEO Dr. Jonathan Porteus. “Recent actions by some pharmaceutical companies have put that care at risk and seriously undermined our ability to meet our patients’ most basic healthcare needs.”

Today’s letter builds on Congresswoman Matsui’s enduring support for the 340B Program. In July, she introduced a bipartisan bill to provide temporary waivers for certain 340B program eligibility requirements due to the COVID-19 health emergency. The bill will protect 340B hospitals from losing their covered entity status and allow for greater flexibility in sourcing drugs during the pandemic. Text of that bill can be found here.

Read the full letter below or click here.

Dear Secretary Azar:

The 340B program plays an integral role in ensuring eligible health care organizations have access to vital lifesaving medications. As Members of Congress deeply committed to the important safety net mission of the 340B Drug Pricing Program, it is imperative that immediate action is taken to ensure covered entities continue to receive crucial 340B drug discounts.

Recently, several pharmaceutical companies have taken a series of actions to restrict federally required 340B drug discounts for eligible health care organizations/covered entities, which are defined in statute and include HRSA-supported health centers and look-alikes, Ryan White clinics, Medicare/Medicaid Disproportionate Share Hospitals, children’s hospitals, and other safety net providers. These providers have always served as a critical part of our health care safety net, ensuring that our most vulnerable populations have access to the care they need. Right now, they are on the front lines of our national response to COVID-19. These providers rely on 340B savings to ensure access to care for low-income and rural patients. The recent actions undermine the intended purpose of the 340B Drug Pricing Program. The Department of Health and Human Services (HHS) must take immediate action to stop these companies from either denying or limiting access to 340B pricing to hospitals, health centers, and clinics participating in 340B.

Congress enacted 340B with strong bipartisan support more than 25 years ago to reduce drug costs for safety-net providers that care for vulnerable populations. Congress clearly stated the law’s purpose: “To stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” The savings created by 340B do not cost the American taxpayer a single dollar, as the savings come directly from discounts provided by the manufacturers.

Specifically, the 340B statute requires manufacturers wishing to participate in Medicaid and Medicare Part B to “offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price.” There are no provisions in the statute that allow manufacturers to set conditions or otherwise impede a provider’s ability to access 340B discounts.

Despite this statutory requirement, several major drug manufacturers have recently announced that they will limit or restrict 340B pricing based on where the safety-net provider elects to have its 340B drugs shipped. These actions are in violation of the statutory requirement that drug companies charge no more than the 340B ceiling price when selling their products to 340B providers. They establish a dangerous precedent for other manufacturers to follow if immediate action is not taken.

Additionally, within the past two months, other manufacturers have sent requests to covered entities demanding extensive claims data that goes far beyond the scope of the 340B statute. These demands are not only needlessly burdensome for providers but also raise issues related to patient privacy. These companies are also threatening to limit or deny 340B pricing if these covered entities do not comply.

The actions of these companies violate the 340B statute and must be rejected. A failure to act will serve as an invitation to other manufacturers to follow suit, leading to a wholesale increase in prescription drug costs for our safety-net providers during a public health emergency. We urge you to use your authority to address these troubling actions and require these companies to comply with the law.

Thank you for your attention to these matters.

Background:

Since 1992, the 340B program has used mandated discounts offered by drug manufacturers to help hospitals and other covered entities provide discounted drugs and lifesaving services to their patients.

The letter is supported by: 340B Health, AEH, AAMC, AHA, Catholic Health Association, NRHA, Ryan White Clinics For 340B Access, Wellforce, NACHC, CommonSpirit Health, Denver Health, Colorado Community Health Network, National Alliance of Safety-Net Hospitals, St. Luke's University Health Network, West Virginia University Health System, Greater New York Hospital Association, Safety-Net Association of Pennsylvania, and Kintegra Health.

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