Inside HSCA: 340B: A Small Program with Big Problems

The

Journal of Healthcare Contracting

recently published a piece from Healthcare Supply Chain Association (HSCA) President Curtis Rooney titled, “340B: A Small Program with Big Problems.” The article focuses on the complexities and increased scrutiny faced by well-intended 340B drug program. Rooney explains that the next six to 12 months are critical for the program as it faces hard examination from Capitol Hill, participating manufacturers, the press and an assortment of competing interest groups.

“The Patient Protection and Affordable Care Act (PPACA) expanded the types of hospitals eligible to participate in the 340B program and instituted new programs for ensuring that both pharmaceutical manufacturers and covered entities comply with 340B program requirements. The expansion included hospitals previously excluded from the program, including children’s hospitals, cancer hospitals and critical access hospitals (CAHs). One thing that the legislation did not do, as some expected, was to expand the 340B program to cover inpatient drugs.

"More recently, the U.S. General Accountability Office (GAO) issued a report entitled, “Drug Pricing Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement.” The September 2011 report opened the door to further Congressional action, including hearings and demands for subsequent program reviews. Republican members appear particularly interested in examining the program. In January, Senators Chuck Grassley (R-Iowa), Lamar Alexander (R-Tenn.), Orrin Hatch (R-Utah), and Mike Enzi (R-Wy.); and Reps. Joe Pitts (R-Pa.) and Bill Cassidy (R-La.) wrote to HRSA requesting more information about the audits HRSA conducted to certify that covered entities are still eligible for the 340B program…

"HRSA issued a Program Notice (2013-1) in February intended to ensure 340B program integrity, particularly with respect to GPO prohibition compliance by 340B-program-covered entities. Despite its intentions, however, the Program Notice has caused substantial confusion and uncertainty regarding whether it is possible in practice for a 340B-program-covered entity to comply with the Program Notice without maintaining separate physical inventories for drugs purchased through the 340B program and those purchased through GPOs. The effective date of the Program Notice has already been extended from April 7, 2013, to August 7, 2013. If hospitals can’t comply because of billing software issues, they will need another deadline extension, which they may or may not receive.”

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