A group of experts gathered at a recent meeting of the Academy of Managed Care Pharmacy made some intriguing assertions after analyzing the federal government’s 340B Drug Pricing Program and the many controversies surrounding it. The group did not come out explicitly in favor of the program, or against it, but they did raise some legitimate questions about its benefits.
Their analysis is by no means the only one of its kind. Ever since the 340B program was launched in 1992, it has been the source of much disagreement. Unfortunately, the program has only become more controversial as time has passed. The larger it grows, the more opportunity there is for proponents and critics to disagree.
Improve Healthcare Access
The original intent of the 340B program was to provide additional funding to disproportionate share hospitals and other select healthcare providers to improve healthcare access in underserved communities. The funding would not be provided directly through government handouts. Rather, it would come from mandated savings on a long list of outpatient prescription drugs.
Under the law, pharmaceutical companies are required to offer discounts on certain prescription medications to all program participants, also known as covered entities. The pharmaceutical companies do not get to determine the discount, however. It is determined by a federally mandated formula applied on an annual basis. It can result in savings of more than 50% on certain drugs.
Being able to purchase drugs at a discount gives covered entities two options for increasing healthcare access among those in need. The first is to pass the savings along to patients through low or no-cost prescriptions. The other option is to sell the medications at retail and then use the profits to support other healthcare initiatives.
No Proof It’s Working
The previously mentioned experts acknowledged that billions of dollars have been saved over the 30 years the 340B program has been in existence. But they also say there is not enough data to prove that the program is actually accomplishing its intended goal. The biggest problem is that there is no legitimate way to quantify whether saving money on prescription meds ultimately increases access to care among the poor and indigent.
Adding fuel to the fire are accusations from pharmaceutical companies that covered entities are not putting their savings back into increasing service access. Instead, they claim too many covered entities are using the discount drug program to pad their profits.
A More Complicated Program
Although critics and proponents disagree over the benefits of the 340B Drug Pricing Program, the one thing they seem to agree on is that the program has become more complicated over the years. In the early days, it was just one covered entity and one contracted pharmacy working together under 340B. Now, covered entities can have multiple contracted pharmacies along with an unlimited number of child sites under their umbrella.
340B consulting firms like Ravin Consultants thrive because the program is so complicated. They assist with everything from 340B implementation to compliance checks to mock audits.
It should be no surprise that some lawmakers are calling for the program’s abolishment. Others would prefer a complete overhaul from top to bottom. In the meantime, pharmaceutical companies and covered entities are relying on the courts to settle disputes that might have never come to be had the program not gotten so bloated.
Could it be that the 340B Drug Pricing Program is not really meeting its intended goals? At least some experts say it is possible. But without hard and fast data to look at, there is no way to know for sure.