Both supporters and critics view the release Thursday of the federal government's long-awaited proposed guidance on the 340B Drug Pricing Program as a much-needed step to help clarify some of the ambiguity many providers feel has been the program's trademark as providers have tried to remain compliant with its rules year after year.
But an initial review of the 90-page guidance document has worried stakeholders who think the proposed rules could limit patient access to the program while adding an extra administrative and clinical burden for hospitals.
According to Alyce Katayama, a partner at law firm Quarles and Brady, the draft guidance released by the Health Resources and Services Administration aims to limit the ability of non-covered organizations to prescribe discounted drugs for patients referred to them by providers covered in the program.
She adds that in some ways the agency has shifted away from previous guidance it provided.
“Now that we have this insight as to where HRSA might go with the guidance, I think it's just going to put everyone in limbo until it is finalized,” Katayama said. “People will be concerned about what they're doing; people who might have wanted to implement new programs will put those plans on hold because they don't know how this thing will turn out.”
Other conditions placed on the definition of a 340B-eligible patient include requiring that an employed staff member for a covered entity provide care for the patient. That prohibits physicians or other providers from prescribing drugs under the program if they have an arrangement in which they only have privileges or credentials with a 340B hospital.
“There definitely are some provisions in the guidance that appear to be restricting hospitals' ability to use the program and potentially in large ways,” said Beth Feldpush, senior vice president of advocacy and policy for America's Essential Hospitals, the leading advocacy organization for safety net providers.
Another point of concern involves a provision that prohibits hospitals from prescribing 340B discounted drugs to inpatients at discharge, instead requiring patients to make an outpatient appointment before a prescription is eligible under the program.
Feldpush said such requirements have the potential to add an undue burden for hospitals and will cost time and money to implement.
“The 340B program is very administratively complex and costly to administer now,” Feldpush said. “For our members that rely on the savings, I could see where if HRSA narrowed the program so much, a hospital could say the costs to run this program may outweigh (the benefit of) participation in it.”
Debate over the need for 340B program reforms has increased in recent years as the number of organizations involved in the program has grown. Critics, including the Pharmaceutical Research and Manufacturers of America, have accused the program of allowing some providers to participate and benefit from savings despite serving a relatively small proportion of low-income patients.
The program requires drugmakers to provide discounts of 20% to 50% to hospitals and clinics for certain outpatient drugs as a condition of eligibility for Medicaid reimbursement.
The program has since seen a stark rise in the number of covered organizations. One-third of all hospitals now participate, and the Government Accountability Office has estimated as many as 40% are eligible.
In a statement released Thursday, Lori Reilly, PhRMA's executive vice president of policy and research, said the organization was “pleased” with HRSA's effort, calling it a “step forward” in providing greater program clarity.
“PhRMA has long maintained the 340B drug discount program should be targeted to true safety net hospitals and the recipients of federal grants, which rely on the program to serve vulnerable patients,” Reilly said. “PhRMA is pleased the Health Resources and Services Administration is taking a step forward to provide additional clarity on the 340B program.”
