In 1992, Congress created a program -- known as "340B" -- to help caregivers serving disproportionately large numbers of low-income beneficiaries and uninsured patients. Under 340B, drug manufacturers are required to sell their products at a discount to such institutions. The discounted prescriptions are dispensed either through the caregiver's in-house pharmacy or through a contractual arrangement with an outside pharmacy.
340B has a noble cause. And many of the medications discounted through 340B do in fact go to clinics, hospitals, and medical facilities providing care almost exclusively to uninsured and poor patients.
However, some 340B participants are exploiting the program and the vulnerable patient populations 340B was intended to help are often still stuck struggling to gain access to affordable pharmaceuticals.
To wit, Pharmaceutical Research and Manufacturers of America (PhRMA) Executive Vice President and General Counsel, Mit Spears has issued the following statement:
“PhRMA strongly supports the 340B program, which is intended to help vulnerable and uninsured patients obtain access to life-saving medicines. We are committed to working with all stakeholders to improve the program to ensure it benefits those it was intended to help. To achieve this important objective, it is critical the program operate in a manner consistent with the clear direction of Congress.
“At issue is the Health Resources and Services Administration’s (HRSA) interpretation of the 340B orphan drug exemption, enacted as part of the Affordable Care Act (ACA). The ACA significantly expanded the type of entities that can access 340B discounts for prescription drugs. To preserve incentives to invest in research and development of new treatments for rare diseases, the ACA expressly exempts manufacturers from having to provide these discounts on orphan drugs to newly eligible providers.
“After the Federal District Court of the District of Columbia vacated the HRSA July 23, 2013 rulemaking regarding the 340B orphan drug exemption, in July 2014, the agency issued the exact same rule, but labeled it ‘interpretive.’ HRSA’s action in this regard is unlawful.
“While we value the hard work and efforts of all agencies, it is important federal agencies recognize and work within the bounds set by Congress. PhRMA is therefore filing suit against the U.S. Department of Health and Human Services to challenge its second attempt to issue a rule conflicting with the plain language of the statute.
Go get’em, Mit!
