Drug Discount Program Must Be Protected

Congress will be in Republican hands next year and it’s a golden opportunity for the party to take leadership on controlling costs and expanding access to healthcare. However, letting Big Pharma gut a critical drug discount program that helps the poor must not be part of the plan.

The little known 340B program allows safety-net hospitals to provide discounted medications and services to millions of needy patients every year. Howard Dean recently criticized these hospitals in Morning Consult. It is disappointing to see such a champion of healthcare for all clearly delivering the talking points of the drug industry.

The not-so-secret objective of the drug industry is to gut the 340B program. Why? Because the law requires pharmaceutical companies to supply medicines at a reduced profit to health providers that serve high numbers of low-income Medicare and Medicaid patients. Big Pharma doesn’t like reducing profits, even when it helps the needy in our communities in proven and profound ways.

Big Pharma has spent a lot of time and money lately pointing fingers at hospitals. It’s a convenient strategy.  For an industry that is currently raising US drug prices astronomically, it’s clear attempt to divert policy makers’ attention elsewhere.

Here are some unflattering facts that pharmaceutical companies would prefer we ignore. The cost of drugs to treat cancer, HIV, multiple sclerosis and other chronic conditions are rising at double-digit rates.   Some generic medications are up by 2800 percent, according to the New England Journal of Medicine. Congress is investigating.  Meanwhile, pharmaceutical manufacturers are reaping colossal profits of up to 40 percent – while trying to derail critical drug discounts that help the needy stay healthy.

Let’s look at how the program actually works. Public and nonprofit hospitals buy discounted medicines from drug companies and pass the lower prices along to needy patients. They also may sell the medications at negotiated rates to insured patients and use the funds to help pay for HIV/AIDS, oncology, diabetes clinics and other services for patients who cannot afford to pay for care. This is not “abuse” of the 340B program – it’s exactly what Congress intended.

On several occasions Dr. Dean has cited flawed, industry-funded “research” criticizing hospitals’ charity care levels. These numbers conveniently leave out the colossal $25 billion in uncompensated care that safety-net hospitals provide every year to cover the bills of patients who can’t pay. The fact is, these hospitals treat more than twice as many poor patients as other providers. This population also tends to be sicker and far more expensive to treat.  Dr. Dean should know this.

And the good doctor fails to mention a new study that shows a private pharmacy chain that works with hospitals and clinics to distribute 340B drugs “dispense[s] medications used by key vulnerable populations targeted by the program.” More importantly, the report finds only one half of 1 percent of Walgreens total scripts are for 340B medications.

Dr. Dean demands more oversight. Yet he ignores the 244 government audits of safety-net hospitals and clinics that have occurred since 2012. The outcome? Not a single one has found intentional problems or resulted in dismissal from the program.  (I would also point out that there has been just one audit of a drug manufacturer during this time: 244 to 1).

I wholeheartedly agree with Dr. Dean that the incoming Congress should find common ground to make healthcare more affordable.  But allowing Big Pharma to dismantle a vital health program that helps the needy would be a terrible place to start.
Gil Gutknecht is a former Republican Congressman from Minnesota.  He consults with a number of companies and organizations, including Safety Net Hospitals for Pharmaceutical Access, a non-profit association of providers participating in the 340B program

Morning Consult