340B Health

Latest Delay in 340B Drug Pricing Rule Leaves Providers and Patients Vulnerable to Higher Drug Costs

in 340B Health News Releases

Washington, D.C.-- The federal government’s decision to delay – for the fifth time – enforcement of critical 340B program rules policing drug manufacturer pricing behavior will leave safety net providers and their patients vulnerable to paying more than they should for outpatient prescription drugs. 340B Health, representing more than 1,300 hospitals and health systems participating in the 340B drug pricing program, is calling on the government to begin enforcing the rule without further delay.

The 340B drug pricing program gives safety-net providers relief from high drug prices and the ability to use those savings to fund critical programs for low-income and rural patients. In 2010, Congress called for rules establishing civil monetary penalties for drug makers that “knowingly and intentionally” charge more than the law allows for 340B drugs. Lawmakers acted following reports by the HHS Office of the Inspector General (OIG) detailing actions by manufacturers to exceed price limits. In a 2006 report, the OIG found that 14 percent of purchases made by 340B entities exceeded the 340B ceiling price. In response, Congress directed HHS to publish the 340B ceiling prices on a password-protected website so that hospitals could verify they were being charged the correct price. That action, too, has been delayed.

In January 2017, HHS published a final rule implementing the penalties. However, since taking office the Trump administration has repeatedly put off enforcement. In its latest announcement, the government proposes pushing that date off to July 1, 2019. In seeking public comment on that plan, HHS claims the delay “would not result in a significant impact” on 340B providers and patients.

“There is a clear history of manufacturers overcharging 340B providers. Delaying enforcement of this rule will have a tremendous adverse impact on hospitals, clinics and health systems caring for low-income and rural patients,” said Maureen Testoni, Interim President and Chief Executive Officer of 340B Health. “It has been eight years since Congress directed HHS to establish these vital consumer protections and they are long overdue. We are calling on the administration to enforce the law as written and make sure manufacturers aren’t overcharging for their products.”

Absent enforcement of the pricing provisions of the law, hospitals and other covered entities do not have any significant remedy to address suspected 340B overcharges. For example, hospitals are not allowed to audit or sue manufacturers that overcharge. HHS’ refusal to launch the 340B drug price website denies hospitals another tool they could use to check manufacturers’ compliance with the law.

Hospitals participating in 340B provide 60 percent of the nation’s uncompensated and unreimbursed care and provide vital services including HIV/AIDS care, opioid addiction treatment, and trauma care. On average, 42 percent of the patients these hospitals serve have income low enough to qualify for Medicaid.

Contact: Richard Sorian at 202-536-2285 or richard.sorian@340bhealth.org

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