Health Resources and Services Administration’s proposed ‘Mega-Guidance’ for 340B drug program is “…solution in search of a problem,” says AHF in formal comments filed with HRSA to oppose changes.
The 340B discount drug program requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices. 340B enables covered entities to stretch scarce Federal resources as far as possible, reaching more patients with more services.
WASHINGTON (October 28, 2015) In response to a call by the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) for community comment and stakeholder input on proposed changes to the government’s 340B discount drug pricing program, AIDS Healthcare Foundation (AHF), a certified 340B safety net provider, formally submitted a 16-page letter yesterday offering its own input—and direct challenges—to HRSA over proposed changes to the successful program.
According to HRSA, the 340B discount drug pricing program, which was created by Congress in 1992, “…requires drug manufacturers to provide outpatient drugs to eligible health care organizations/covered entities at significantly reduced prices. The 340B Program enables covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”
Earlier this year, HRSA issued a draft version of proposed changes or ‘Mega-Guidance’ on the 340B drug program. With the release of the draft Guidance, HRSA also solicited stakeholder and community comment, due to HRSA by October 27th. AHF officials submitted their comments, opposition and suggestions on that date.
“The 340B Program was not broken, but in attempting to fix it, HRSA has, unfortunately, broken it in unnecessary and harmful ways,” said Laura Boudreau, Chief Counsel for Operations for AHF. “In particular, it would impose restrictions on participation and eligibility that are inconsistent with the law and outside HRSA’s regulatory authority. And as a practical result, if 340B is cut or if eligibility is restricted under HRSA’s Proposed Guidance, more people will turn to the government for help as safety net providers can no longer offer services. In this regard, it is important to note that the 340B Program costs the government and taxpayers nothing. The Program simply affords safety net providers access to reduced prices for drugs the providers purchase from drug manufacturers. Yet the savings obtained from the Program enable safety net providers to provide more services to more people, meaning the government reaps an additional benefit, as these people would otherwise be treated through emergency rooms or other public assistance programs, at taxpayer expense. Given the importance of the Guidance to numerous stakeholders—including AHF and other safety net providers—we believe HRSA should rescind the Proposed Guidance to avoid unnecessary confusion, disruption, and likely litigation.”
For several years 340B has been the target of ongoing and aggressive attacks by the pharmaceutical industry, PhRMA (Pharmaceutical Research and Manufacturers of America) and its lobbyists. The pharmaceutical industry has twice sued to show that HRSA does not have the legal authority under the original 340B legislation to create regulations with the exception of in a very few areas, an assessment that AHF agrees with. In 2007, HRSA also started down the same path of issuing guidance but later withdrew it.
In its formal ‘Comments on 340B Drug Pricing Program Omnibus Guidance from the Ryan White Provider Perspective,’ AHF noted that the Guidance appears to favor drug company and Medicaid’s wishes over the rights of covered 340B entities and providers such as AHF. Several specific concerns AHF has with individual provisions of the proposed Guidance are included in its comments. These specific areas of concern include:
- Patient Definition: The proposed new patient definition would limit 340B drugs to only certain kinds of patient prescriptions – even for a bona fide patient of the safety net provider, and even though the statute does not limit access by prescription. This would pose a significant hardship for patients and the covered entities who, in certain instances, could have to pay up to 50% more for a drug.
- Limit Ability to Use 340B Drugs for Medicaid Managed Care Drugs: The Proposed Guidance would significantly re-write the 340B and Medicaid statutes and the rights and obligations of safety net providers, with the result that providers who use contract pharmacies would effectively be barred from using 340B drugs for their Medicaid managed care patients – while the benefit would ultimately end up on the pocket of commercial Medicaid plans.
Other areas of concern for AHF about the proposed Guidance include the categorical exclusion of pharmacies as covered entities and problems with the audit process, most notably, the absence of Due Process in the form of adequate hearing & appeal rights for covered entities. To read AHF’s entire 16-page letter to HRSA OPA Director Captain Krista Pedley, click here.
“While the proposed Mega-Guidance contains some helpful clarifications, these are outweighed by ‘guidance’ that is in fact unlawful and bad policy, and which would have disastrous consequences for Ryan White providers in particular,” added Michael Weinstein, President of AIDS Healthcare Foundation. “On balance, because the Guidance would do more harm than good, especially to Ryan White providers, AHF urges HRSA to withdraw its Proposed Guidance.”