Targeting 340B Prescription Drug Discounts to Those Most in Need


By John Coster, R.Ph., Ph.D.

As a society, we’ve enacted programs like Medicaid and the State Children’s Health Insurance Program (SCHIP) to help the lowest-income and most dependent Americans, respectively, have access to health care.

But is it possible for a charity program to be too charitable, to its own detriment?

That question arises as Congress considers expanding the 340B Drug Pricing Program as part of health care reform. The program “limits the cost of covered outpatient drugs to certain federal grantees, federally-qualified health center look-alikes and qualified disproportionate share hospitals,” according to the Web site of the Health Resources and Services Administration (HRSA), the federal agency in charge of the program. “Significant savings on pharmaceuticals may be seen by those entities that participate in this program.”

There’s no questioning the need for efforts like this; community pharmacies routinely witness and help patients trying to reconcile their medication needs with their budget. But, unfortunately, the 340B program lacks any specific eligibility requirements. Grantees are left to make those decisions on their own. As a result, community pharmacists report the discounted 340B drugs are being diverted to hospital employees and patients with private insurance.

That creates two problems: First, it threatens exhausting the program’s limited resources long before help is provided to those truly in need. Second, it forces taxpayers and other insured patients to subsidize patients capable of paying their own bills.

In 2007, HRSA attempted to set eligibility requirements but those efforts have yet to come to fruition. This week NCPA asked Congress to ensure the agency completes that process before any expansion of the program can take effect.

“The bottom line is that the 340B program’s purpose – that is, to help the indigent and uninsured – is being undermined and threatened,” we wrote in a letter, available here. “For that reason, we ask that you include appropriate legislative safeguards in the conference report to protect against the diversion of these discounted drugs to ineligible patients or inappropriate use by the facilities that receive them.”

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