Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
May 15, 2018 01:00 AM

Senate committee turns 340B spotlight on drugmakers

Susannah Luthi
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Lawmakers turned their sharp scrutiny of the 340B program on drugmakers Tuesday, questioning why states and providers don't know the ceiling prices within the drug discount program.

    In a hearing Tuesday, members of the Senate health committee asked government watchdogs why the Trump administration has delayed for the fifth time a rule that would set ceiling prices and why 340B hospitals don't know what they ought to be paying for the discounted drugs. Although the Government Accountability Office and HHS' Office of Inspector General urged senators to clarify 340B's intent to improve oversight, the tone marked a shift from the committee's March hearing where hospitals were on the hot seat for how they spend the funds they save thanks to 340B.

    Ann Maxwell, the OIG's assistant inspector general for evaluation and inspections, said the office believes the Health Resources and Services Administration needs to share 340B drug ceiling prices directly with providers and states to make the program more transparent.

    But that move is on hold, she said. The Affordable Care Act gave HRSA the authority to share the data with providers, but so far the agency hasn't finished its secured data system to release the prices. Congress would have to give HRSA additional authority to share them with states as well. The secured data system likely won't be completed before the Trump administration finalizes its drug pricing rules, Maxwell said.

    Maxwell and the GAO's Debra Draper both testified that the systematic audits in place for hospitals don't carry over to the pharmaceutical companies involved in 340B.

    HRSA must refer drugmakers that overcharge 340B providers to the OIG for penalties. To date, HRSA has not made any referrals, according to Maxwell.

    The lack of transparency financially hurts providers, Maxwell said. A 2005 report showed that 14% of all drug purchases by 340B providers in one month were over the mandated ceiling price, racking up an estimated $3.9 million in overcharges for June 2005 alone.

    Republicans and Democrats both piled on to these points, with Democrats slamming the Trump administration for delaying the pricing regulation the same week it released its long-anticipated strategy to lower drug pricing.

    Sen. Johnny Isakson (R-Ga.) suggested hospitals ought to be able to verify what they are supposed to pay manufacturers for 340B drugs. The committee's ranking Democrat, Patty Murray of Washington, blasted the administration's fifth delay of regulation on ceiling prices as sabotage of the program.

    Sen. Susan Collins (R-Maine) spoke on behalf of the 25 340B hospitals in her state, 14 of which she said have negative operating margins. The rest depend on the 340B program to put their operating margins in the black. She reserved her ire for drugmakers and murky rebate systems.

    "Once again we ran into lack of transparency," Collins said, referencing the hearing she chaired last week in the Senate Special Committee on Aging to examine the spike in insulin prices for patients. "There is a chart of middlemen including pharmacy benefit managers, insurers and distributors that are between manufacturers and patients. The rebates don't get passed on."

    Maxwell and Draper both emphasized the need to clarify 340B's intent, which they described as ambiguous.

    Maxwell also noted that the OIG will be monitoring how the recently implemented rule cutting 340B providers' Part B reimbursements by 22.5% affects hospitals and whether the subsequent redistribution of the 340B discounts will blunt the cuts in any way.

    But some upcoming watchdog reports will continue to scrutinize the cottage industry that has sprung up around 340B providers, including third-party administrators and contract pharmacies.

    Massive pharmacy benefit managers like Walgreens, CVS and Walmart have seen an explosion of business in the 340B space. According to analysis by consultant Adam Fein of the Drug Channel, Walgreens saw a 19% increase to almost 6,400 340B drug dispensing sites between 2013 and 2017. CVS expanded its 340B dispensing sites from just over 500 to more than 1,900 in the same span, a more than 280% increase. Walmart had a 137% increase in sites.

    The GAO plans to look at the financial arrangements between contract pharmacies and 340B providers. Officials will also look at what portion of the 340B discounts are passed on to low-income patients and will also look at HRSA's oversight work and will dive into the audits of 340B providers.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    hospital mergers roundtable
    CEOs sound off on mergers, healthcare disruptors
    About Fresh
    Nonprofit helps hospitals connect patients with healthy food
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing