340B Blues
by Joe Pugliese, President and CEO

Congress passed the Veterans Health Care Act that created the 340B Program in 1992 and if you are having trouble sleeping you may want wade through the link. The 340B Program has been controversial since its inception. Ironically covered entities were remarkably slow to take advantage of the obvious benefit of the federally-mandated drug discount program. Based on personal experience, for the first two decades the pharma industry simply considered the program a cost of doing business. However, as many have noted, the program has grown substantially in the last decade. Critics describe this growth using pejorative terms, like “an explosion” and say that the program needs guardrails. PhRMA, the industry trade group, devotes a significant amount of time to eviscerating the program and calling for changes, though they fail to mention that their members would be the direct beneficiary of any curtailment of the program, perhaps an important disclosure.

Recently, the pharmaceutical industry has taken a more proactive approach to limiting the program by instituting restrictions on access to discounted products if you use contract pharmacy providers. As usual, our manufacturing partners have not applied these restrictions to HTCs. The bleeding disorders community is very appreciative of their unwavering support. Generally, the restrictions have been focused on the hospital participants in 340B (either because they are DSH (disproportionate share hospitals) and/or children’s hospitals). PhRMA and hospitals have gone to court over this restriction. Everyone agrees the restrictions are hurting the ability of covered entities to generate revenue to support patient care and services.

Historically all of the covered entities – hospitals and grantees – have consistently presented a single voice regarding the obvious value of the 340B program in stretching scarce federal resources and providing care for vulnerable populations. HTCs are grantees under the HRSA SPRANS Program (Special Programs of Regional and National Significance). Recently some of the grantees have broken with this tradition and are calling for changes to the program.

As the smallest participant in the 340B drug discount program, we have long worried that we could be harmed by these debates. We are closely watching these events unfold to make sure that we can mitigate threats. But, we are also aware that change is likely and with change comes opportunity. We are looking for opportunities to build on a program that has been pivotal in providing the financial support for HTCs to provide outstanding clinical care for the bleeding disorders community. (see studies here and here).