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Nicole Longo, the Deputy Vice President of public affairs at PhRMA, said "there is clear evidence many hospitals are exploiting loopholes in the 340B program" and not providing patients the discounts that the program was intended for. 

"There is clear evidence many hospitals are exploiting loopholes in the 340B program, driving up costs for patients, employers and taxpayers in the process," Longo wrote in a recent PrHMA Foundation blog. "They prescribe more expensive medicines and are less likely to prescribe biosimilars. They are driving provider consolidation, buying up smaller hospitals and physician practices. And they significantly mark up medicine prices."

The 340B drug pricing program was created in 1992 to support uninsured or low income patients by enabling 340B covered entities like hospitals or health care organizations to purchase drugs for eligible patients at lower costs, passing on those savings to the patients. Since inception, there has been little oversight added to the program, leading to hospitals and health care institutions pocketing the savings instead of lowering costs for patients

The 340B ACCESS Act was proposed to address these issue, and would add new requirements for transparency and eligibility to protect 340B patients. The legislation provides a clear definition of which patients are 340B eligible as well as a detailed list of requirements for hospitals to be eligible for participating in the 340B program. 

"The Inflation Reduction Act (IRA) could make this problem worse," Longo wrote. "Under the law, when a medicine selected for a maximum fair price (MFP) is also eligible for 340B pricing, manufacturers are not required to provide both the 340B price and an MFP rebate, if owed, on the same unit of a medicine. The IRA also prohibits including 340B-priced medicines in the calculation of Part D inflation rebates."

The Inflation Reduction Act (IRA), signed into law by President Joe Biden (D) in 2022, contains a drug provision in which the brand-name drugs for which Medicare "negotiates" prices are split into two categories: small-molecule drugs and biologics. 

The IRA makes small-molecule drugs eligible for "negotiation" nine years after their approval, compared to a 13-year exemption period for biologics.

An October 2023 paper, authored by University of Chicago economists, said that the IRA small molecule provision will result in “188 fewer small molecule treatments, including 79 fewer new small molecule drugs and 109 fewer post-approval indications for these drugs.”

"For too long have the problems of this well-intentioned program been ignored," Longo wrote. "Congress must rein in the rampant abuse hospitals are perpetrating at the expense of the American public."