Placeholder Banner

BioCentury TV This Week: 340B Drug Discount Program Needs More Oversight

July 28, 2014
BIO’s Laurel Todd shared concerns that the 340B program has departed significantly from its original intent, leading to evidence of abuse and potentially harmful consequences for patients.

“The original intent of 340B was to support the most vulnerable patients; clearly that is not the focus for many of the participants in the program now,” said Todd.

Todd pointed to three primary reasons the program needs more oversight: Exponential growth, significant violations revealed in audits, and lax oversight.

Congress created the 340B program in 1992 to provide discounts on outpatient drugs to hospitals that treat a disproportionate share of poor patients. Since the program’s inception, the number of entities has increased significantly yet no measure of the amount of care provided for uninsured patients has ever been taken to validate this expansion. From 2005 to 2011, the number of hospitals participating in the 340B program has nearly tripled (from 591 to 1,673) and the number of hospital sites (separate locations of a given hospital that participates in 340B) nearly quadrupled (1,233 to 4,426). Today, one-third of all disproportionate share hospitals (DSH) participate in the 340B program.

The Health Resources and Services Administration (HRSA) recently conducted an audit of randomly-selected covered entities and identified a clear and urgent need for oversight and improved guidance for covered entities. More than half of the audits had adverse findings, and only 18 of the 42 entities were shown to be fully compliant with the guidelines of the 340B Drug Discount Program.

Over the last 10 years, the Government Accountability Office (GAO) and the Office of the Inspector General (OIG) have consistently called for more specific, formal guidance and improved oversight of covered entities. In fact, a GAO study found that HRSA’s past oversight of the program was inadequate because it primarily relied on participants’ self-policing to ensure compliance.  Congressional Oversight Committees and HRSA have recently taken steps to improve oversight, and such efforts to ensure program integrity must continue and expand.

“Medically underserved patients are depending on all of us to protect access to this critical safety net program intended to help at-risk patients. If we want to keep 340B alive, reforms are vitally important to ensure the program benefits vulnerable patients,” said Todd. Watch the interview here:

BioCentury 07.27.14 - [2] Billions of Dollars

BIO is a member of the Alliance for Integrity and Reform of 340B (AIR 340B), which is a coalition of patient advocacy groups, clinical care providers and biopharmaceutical innovators dedicated to reforming and strengthening the 340B program to ensure it directly supports access to outpatient prescription medicines for uninsured indigent patients. Alliance members believe that the 340B program is critically important to uninsured indigent patients and that attention is needed to address concerns over whether the program has deviated from its original purpose and is leading to unintended consequences for patients.