Legislative Update: U.S. House Energy and Commerce Subcommittee on Oversight and Investigations Holds Hearing on 340B Drug Pricing Program

The U.S. House of Representatives Energy and Commerce Subcommittee on Oversight and Investigations held a hearing on Wednesday, October 11 entitled, “Examining how covered entities utilize the 340B drug pricing program.”

Speakers called before the committee represented a range of health care providers, including Ryan White Grantees, similar to AIDS Healthcare Foundation.

“While the official reason for the hearing is for the subcommittee to conduct oversight on how the program is being implemented, the political reason is that  drug companies want to roll back 340B because it crimps a tiny portion of their overall profits,” said AHF national director of advocacy John Hassell.  “It’s good that non-profit health care providers are maximizing this program to purchase life-saving prescription medication at a discount so they can keep patients in care and treat even more patients in the future,” he added.

What is the 340B Drug Discount Program?

Established by Congress in 1992, the 340B Drug Pricing Program mandates that drug manufacturers provide outpatient prescription medication at a reduced cost to eligible covered entities, such as AHF’s Ryan White Clinics, as a way to “stretch scarce federal resources.” Pharmaceutical manufacturers are required to provide these 340B discounts as a condition of their participation in the federal Medicaid program.

Who are the speakers who provided testimony?

Mr. Mike Gifford, CEO at the AIDS Resource Center of Wisconsin, and a fellow member of the Ryan White Clinics for 340B Access Coalition. Ms. Shannon A. Banna, Director of Finance and System Controller, Northside Hospital, Inc., Dr. Ronald A. Paulus, President and CEO, Mission Health Systems, Inc., Mr. Charles Reuland, Executive Vice President and COO, Johns Hopkins Hospital and Ms. Sue Veer, President and CEO, Carolina Health Centers, Inc.

Copies of the statements the witnesses gave at the hearing can be found here.

What are the main takeaways from the hearing?

First and foremost, Wednesday’s hearing highlighted the indisputable value of the 340B Drug Pricing Program to safety net providers across the country. Savings generated by 340B have been instrumental to the ongoing success in the fight against AIDS.  Mike Gifford, CEO of ARCW, testified at Wednesday’s hearing, saying,

The “elimination of the 340b program would substantially undermine the fight against AIDS. It would mean fewer resources, fewer services. Patients would become more ill, they would not have an undetectable viral load, there would be new & more HIV infections.”

The hearing showed that while drug manufacturers are asking their friends on the House Energy and Commerce Committee to demand more restrictions on a highly effective program that costs the taxpayers’ nothing, they are simultaneously fighting newly enacted laws demanding more transparency in how drug makers develop prices for drugs that the government purchases from them. During the hearing on Wednesday, Representative Schakowsky from Illinois said,

“It is interesting to me that while the pharmaceutical companies have argued for transparency to the 340b program, PhRMA has spent millions of dollars to prevent laws that require transparency in their own drug pricing.”

 What are the next steps?

Next up, advocacy. We will continue to advocate for the patients we serve and the programs that serve them, all thanks to 340B.

“Our next steps are to organize, educate and advocate,” said Hassell. “We at AHF will be educating voters and stakeholders that the 340B program is the foundation of an innovative social enterprise that creates a business model between clinics and pharmacy operations that helps us keep patients in care by stretching taxpayer dollars to cover services our government contracts won’t pay for.  All our community health HIV testing, STD screening and treatment, and outreach depend on the 340B program that helps us meet our mission of providing quality medical care to our patients regardless of the ability to pay.”