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Drug Discount Program Backers Tell Congress to Wait for Regulations Before Legislating

By Kerry Young, CQ Roll Call

May 20, 2015 -- Supporters of a federal program that requires drug companies to give certain hospitals and other providers discounts on medications urged House lawmakers Wednesday to wait to see new draft guidance from the Health Resources and Services Administration (HRSA) before revising the program.

The Office of Management of Budget now has under review two proposals from HRSA that would change the so-called 340B program, which has been controversial in recent years.

HRSA, the federal agency charged with improving access to health care in communities where it’s scarce, last month completed work on a proposed rule regarding penalties for drugmakers.

Earlier this month, HRSA finished work on a broader guidance for the 340B program that may address contentious issues including the eligibility of hospitals and clinics to participate and questions of which patients’ medicines should be covered, according to a HRSA spokesman.

OMB’s review of these measures likely is a final step before they will be unveiled publicly, said Ted Slafsky, president and chief executive officer of the nonprofit 340B Health, which represents more than 1,000 hospitals and health systems that get the discount. With that in mind, the House Energy and Commerce Committee should put on hold any bid to wrap the program into its pending 21st Cures bill, on which the panel has been working this week, he said. The committee "has been weighing" whether to wrap a discussion of the 340B program into this wide-ranging measure intended to address the development and regulation of new medical treatments, Slafsky said.

“While we appreciate the committee’s interest in the 340B program, we think Congress should review and consider what HRSA proposes to do before considering any changes to this vital program,” Slafsky said on a Wednesday call with reporters.

Administrators of many hospitals and drugmakers have been at odds for years about the 340B program. Hospitals, clinics and other participants used the program to save about $3.8 billion on the cost of medicine in fiscal 2013. The program was created in the 1990s with a goal of helping hospitals that treat many people living in poverty. Participants have complained about a lack of transparency about drugmakers' prices, while others have criticized a lack of rules on who should benefit from the discounted medicines. The leaders of more than 500 hospitals and health systems sent a general letter of support for the 340B program to top lawmakers Wednesday.

“If the program were to be restricted, vital services to the underserved would be cut back,” said the group in a letter addressed to the top Republican and Democratic lawmakers in each chamber. “Prescription drug costs for our patients would rise dramatically and taxpayers would have to pick up the tab.”

Congress has clearly signaled an interest in revising the rules of the 340B program. Energy and Commerce held a hearing on the program in March. The Medicare Payment Advisory Commission has been asked by lawmakers to scrutinize the program, although it does not fall strictly within its bailiwick.

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