There’s a little bit of a rearranging-the-deck-chairs-on-the-Titanic feeling about the Jan. 5 rulemaking by HHS, given that the underpinnings of the existing 340b program are tied to the Affordable Care Act, which has been a favorite target for repeal for the past and now current Congress. Nevertheless, aspects of the rule, published in the Federal Register, have been under discussion since 2010, so give HHS’ Health Resources and Services Administration (HRSA), which administers the 340b program, credit for its dutifulness.

The original aims of the 340b program, put into effect with a 1992 public health law, were to enable certain classes of healthcare facilities to “earn” funds by getting a significant discount on drugs purchased and dispensed by them for outpatient treatment. These facilities were originally limited to “disproportionate share” hospitals (which treat a disproportionately higher share of indigent patients). Subsequent rulemaking, including the Affordable Care Act, expanded the types of facilities eligible, and that the dispensing could be handled by contract pharmacies rather than the facility’s own pharmacy; there has been other regulatory language about the types of drugs that qualify. Now, the 340b program represents some $5-7 billion in rebated funds, out of an estimated total of $15-17 billion worth of prescribed drugs eligible for the discounts; it has been growing at double-digit rates for several years. Some 40-50% of all hospitals now quality as 340b-eligible.

Continue Reading on Pharmaceutical Commerce