The pharmaceutical industry’s lobbying giant, PhRMA, saw Republicans’ willingness to touch major health care programs like Medicaid. Now, they want them to make cuts to the program that lets some hospitals get discounts on drugs.
PhRMA is launching a seven-figure ad campaign pushing for Congress to change 340B, which allows some health care providers to get drugs at a steep discount from manufacturers participating in Medicaid — its biggest ad campaign on the program yet. Taxpayers don’t directly pay for the 340B program, which is the second-largest prescription drug program administered by the federal government.
Drugmakers have long hated the program, arguing that hospitals don’t pass on the savings to patients. Hospitals say the program allows them to cover the most needy in their communities, and even keep their doors open. To help care for low-income and uninsured patients, the program allows eligible providers to keep the difference between the discounted drug and the amount patients’ insurers reimburse for those drugs at the nondiscounted price.
The PhRMA ad, which is running in Washington through the end of the year, hits hospitals for marking up prices and “pocketing the difference.” PhRMA has lobbied on 340B for nearly two decades, but sees fresh momentum following state and federal investigations into the program and Republicans’ willingness this summer to cut Medicaid.
“There were lots of conversations around Medicare and Medicaid, and there’s this flashing red light of a $66 billion program that we think Congress is starting to pay attention to,” Alex Schriver, PhRMA’s senior vice president, told NOTUS.
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Congress established the 340B program in 1992 to help eligible health care providers “stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” The program has since expanded significantly.
More than 60,000 health care facilities or programs participated in the program as of February, a more than 600% increase from 2000, according to a report released in April by Republicans on the Senate Health, Education, Labor and Pensions Committee.
Senate Republicans have proposed a number of reforms including annual reporting requirements and clear manufacturer discount guidelines.
Trump issued an executive order in April that called for significant changes to 340B, and the Department of Health and Human Services last month announced a 340B rebate pilot program.
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