Federal officials told lawmakers Tuesday that the 340B drug discount program needs greater transparency and more clarity about which providers and patients should be eligible.
Such changes will improve oversight of a program that has seen a stark rise in its participation over the past decade, they said.
“To preserve the 340B program and ensure that it is serving those who most need help, greater oversight and transparency is needed to increase the program's accountability,” said Rep. Joe Pitts (R-Pa.), who chaired the proceedings.
Members of the House Energy and Commerce Committee held a hearing to examine how well the program, which mandates drug companies provide 20% to 50% discounts to hospitals and clinics, was working to provide greater access to medications for low-income patients.
The hearing marked the first congressional review of the 340B program since 2005. The number of participating facilities doubled between 2001 and 2011, according to 2014 article in Health Affairs. One-third of all hospitals participate.
As many as 40% of all hospitals are eligible for 340B, according to Dr. Debbie Draper, director of healthcare for the Government Accountability Office, who testified at the hearing Tuesday.
Critics say the agency tasked with overseeing the program, the Health Resources and Services Administration, has failed to fully address a number of deficiencies in its rules and enforcement. That has led to some providers benefiting from discounted drug prices even though a relatively small proportion of their patients are in the population targeted by the program.
An analysis conducted by Avalere Health (PDF) found roughly two-thirds of hospitals participating in 340B provide less charity care than the average U.S. hospital, with charity care making up 1% or less of total costs at a quarter of those facilities.
Meanwhile, 340B drug sales have grown. An analysis conducted by the Berkeley Research Group (PDF) found that drug purchases made at the 340B price rose from $1.1 billion in 1997 to more than $7 billion by 2013, with projections of reaching more than $16 billion by 2020.
HRSA is expected to release regulations on the program that are aimed at clarifying certain issues. Those regulations are expected to allow 340B providers and Medicaid programs access to what are known as “ceiling prices” or the maximum amount that drugmakers are allowed to charge for their drugs under 340B.
Ann Maxwell, assistant inspector general for evaluations and inspections at HHS' Office of Inspector General, said such information is vital to ensure providers and Medicaid are not overcharged for 340B drugs.
Also pending guidance are the parameters for determining which providers and patients qualify to participate. Problems identifying who should be entitled to such benefits have become more common since more hospitals began using contract pharmacies to dispense 340B drugs, Maxwell said.
A 2014 OIG report found that the share of 340B providers who were using third-party pharmacies increased from 10% in 2010 to 22% in 2014.
HRSA estimates the program saved providers $3.8 billion in 2013. Drugmakers have advocated for rules requiring that 340B participants demonstrate those savings are used to directly care for patients.