The American Hospital Association has designed an informative 340B infographic that puts the program’s benefits and vital statistics on one page. This is an outstanding illustration and we encourage you to pass it along to others.
Among the highlights:
- 66: Percentage of all uncompensated care provided by 340B hospitals
- 1.6 to 3.2: Billions of dollars per year in savings for 340B providers to fund services
- 46: Percentage of U.S. counties that are home to a 340B provider
- 2: Percentage of U.S. annual drug sales made through 340B
For more information about this graphic, see the American Hospital Association website.
It’s worth remembering that Congress created the 340B program more than 20 years ago to require highly profitable drug manufacturers to provide safety-net hospitals and clinics with discounted pricing on outpatient medications. In turn, the hospitals and clinics pass on a price break to low-income patients and other vulnerable populations.
Congress also intended for these healthcare providers to buy medicine at a discount, bill insurance companies for it at market rates, and then use the savings to improve and expand primary care and more complex and expensive treatment for cancer, AIDS, diabetes, and other diseases and conditions. The program is critical to health care providers serving a high-volume of care to low-income, uninsured and undersinsured patients.
Critics complain that the program is too big and that providers in the program are “profiting” from 340B. But in truth, 340B helps keep these safety net institutions running and enables patients to get care in their communities. Take for instance, the small town of Greensburg, IN. Recently, the local Decatur County Memorial Hospital had to lay off 10 percent of its workforce. Administrators are now looking to 340B savings to help keep the doors open and ensure that their patients can continue to get the hiqh-quality health care they deserve.
Similar critical-access hospitals as well larger urban and community hospitals are facing steep cutbacks under the Affordable Care Act, making the 340B program crucial to maintaining healthcare services in their communities.
Read our op-ed here.
It doesn’t pass the smell test when your critics demanding integrity have once again coughed up millions to settle a massive Medicaid billing fraud suit.
Alliance for Integrity and Reform of 340B (AIR340B) members Eli Lilly and Baxter Healthcare have together returned $2.9 million to the state of Louisiana for allegedly overcharging the state’s Medicaid program. The final phase of the three-year investigation was announced Monday by the state’s attorney general, Buddy Caldwell. More than 53 pharmaceutical companies agreed pay back a total $238 million.
“These companies took advantage of the state and its taxpayers by fraudulently over-pricing and marketing prescription drugs, thereby forcing the state’s Medicaid program to grossly over-pay for those prescriptions,” said Caldwell. See the full dishonor roll here.
Johnson & Johnson—whose Janssen unit is an AIR340B member— previously paid Louisiana $10 million to settle its portion of the state’s Medicaid fraud suit. Earlier this month, it paid the federal and state governments $2.2 billion to settle a slew of civil and criminal claims, mainly over the illegal marketing of its antipsychotic Risperdal and several other medicines. And, less than a week earlier, J&J was accused in California of cheating on 340B discounts for AIDS drugs.
The 340B drug discount program becomes more essential by the minute as safety-net hospitals face steep shortfalls in federal assistance under the Affordable Care Act.
The Wall Street Journal reports today (subscription required) about how many of New York City’s “financially strapped” 340B hospitals “are scrambling to sign up people for health coverage through New York state’s exchange or through Medicaid as they brace for” the impact of cuts in Medicaid disproportionate share hospital (DSH) payments, which help defray the cost of uncompensated and undercompensated care.
Jason Helgerson, the New York state Medicaid director, notes in the article that the DSH cuts “are putting more pressure on a safety-net hospital system already on the verge of collapse.”
Pam Brier, CEO of Maimonides Medical Center, adds, “We know the Affordable Care Act is not a money-maker for us.” Alan Aviles, president of the New York City Health and Hospitals Corp., points out that 60 to 70 percent of the uninsured patients that the health system’s 11 hospitals serve each year are undocumented immigrants.
Last week, we passed along a moving front-page article in The New York Times about how Georgia safety-net hospitals are struggling to cope with ACA’s DSH payment cuts. 340B savings mean more to these hospitals and their patients than ever.
TogetherRx Access, a drug discount card program sponsored by drug companies, is being discontinued as of Feb. 28, 2014. The reason? Big Pharma says participants will get a better deal on prescriptions by getting insured through the Affordable Care Act or Medicaid.
“We have determined that individuals and families who need help obtaining their prescription medicines may be better served by the health coverage options available through the Health Insurance Marketplace, [or] expanded Medicaid programs in select states …” said the program’s website.
TogetherRx Access is supported by Pfizer, GlaxoSmithKline, AbbVie, Janssen, and four other drug companies. AbbVie and Janssen, by the way, are members of the anti-340B group AIR340B.
TogetherRx Access is the first patient assistance program to close citing the new healthcare landscape as the reason. It is also likely to be a bellwether, as pharmaceutical companies look for ways to push low-income patients into the insurance marketplace and therefore make much higher profits on medicines sold to them.
For the time being, TogetherRx Access card holders will be able to join other patient access programs to obtain discount medicines.
And what is this giant elephant in the room? That’s the estimated 30 million Americans who will likely remain uninsured even as the Affordable Care Act takes effect. For them, the 340B program is a vital avenue to cheaper medicines and better care.
The Seattle Times has published the next installment of its investigation of drug industry profiteering from orphan drugs. It’s entitled How a Drug for a Few Patients Was Turned Into $81 Million in Sales. The story describes how Cell Therapeutics Inc. systematically spread the word among physicians (sometimes with the assistance of patient advocacy groups) about potential off-label uses of its orphan drug Trisenox, which is approved only for a type of leukemia that affects about 400 U.S. patients per year. By early 2003, less than three years after coming on the market, “off-label prescriptions accounted for about 90 percent of the drug’s sales,” the Times says. By the summer of 2005, Trisenox had produced $81.3 million in cumulative revenue for CTI, the Times notes. In 2007, CTI agreed to pay the United States $10.5 million to resolve allegations that it illegally promoted Trisenox off-label.
Earlier this week, we reported that The Seattle Times is investigating drug industry profiteering from orphan drugs. Now, the business news website Quartz has run its own the story on the topic.
“There’s good reason for big pharma’s attraction to rare disease treatments,” writer John McDuling says in Forget Viagra: Why Rare Diseases are Big Pharma’s Latest Obsession. “Revenue from these products has been outpacing sales of mainstream drugs for the last decade, a trend that’s expected to continue for the next 30 year.” McDuling goes on to observe that “drug companies can charge more for orphan drugs because usually there are few, if any, alternative treatments for rare diseases (which are often life threatening) to their product.”
As we noted in our Nov. 11 post, the drug industry is suing to take away all 340B discounts on orphan drugs from rural and cancer hospitals, claiming that the limited price reductions on orphan drugs now available to these hospitals are causing “severe and irreparable harm.”
Recently, we described how the Affordable Care Act (ACA) is squeezing public and private nonprofit hospitals’ finances—making hospitals’ continued access to 340B drug discounts more important than ever. This past Saturday, the front-page lead story in The New York Times took an in-depth look at how two SNHPA member hospitals in Georgia are struggling to cope with ACA’s cuts in Medicaid disproportionate share hospital (DSH) payments, which help defray the cost of uncompensated and undercompensated care.
The Medicaid DSH payment cuts are hitting hospitals hardest in the 26 states that have decided not to expand Medicaid eligibility. These hospitals are seeing as many uninsured patients as ever, but getting less aid to help care for them.
Both SNHPA member hospitals featured in the Times article—Memorial Health in Savannah and Grady Health in Atlanta—provided moving testimonials on how Medicaid DSH cuts will lead to reduced services, including cancer care. Memorial Health’s tumor clinic, one of the few in Georgia that accepts poor and uninsured patients, will be forced to reduce its services. A third of Grady Health’s patients are uninsured, and the hospital predicts its outpatient mental health program, which handles 58,000 visits a year, would be hardest hit by the cuts. The Times article vividly describes the patients being served by these 340B hospitals and what these cuts will mean for them.
The Medicaid DSH cuts “are just one of the reductions in government reimbursements that are squeezing hospitals across the country,” the Times wrote. “Some have already announced layoffs.”
Indeed, just yesterday, The Washington Post reported that MedStar Washington Hospital Center in the District of Columbia, also a SNHPA member, “is cutting jobs because of mounting financial pressures.”
“Like other hospitals in the region and across the country, MedStar Washington has been hurt by cuts in reimbursement from Medicare and Medicaid,” the newspaper said, as well as by the bankruptcy of a once-prominent Medicaid contractor for the district that “stopped paying for care that the hospital provided to its members.”
These stories underscore how important the 340B program will be to patients and the providers that serve them for decades to come.