Once again, the Pharmaceutical Research and Manufacturers of America (PhRMA) has demonstrated its willingness to put the profits of its drug company members over the needs of America’s patients. The organization’s recent announcement of a new coalition “ASAP 340B” is another misguided attempt by drug companies to dismantle the 340B Drug Pricing Program so that they can continue to pad their billion-dollar bottom lines. The self-serving policy proposals outlined by this new alliance directly contravene Congress’ oft-demonstrated intent to preserve the 340B program over the last 30 years. Those most impacted by this coalition’s assault on 340B are the millions of patients who will lose access to lifesaving medicines and to other vital health care services supported by the program.
Let’s look at the facts. For decades, drug companies have raised the prices of their drugs at a record pace. In fact, the Congressional impetus of the 340B program was to help shield hospitals from these high drug prices. This reality has not changed and, if anything, has recently only gotten worse. A report by the Department of Health and Human Services’ Assistant Secretary for Planning & Evaluation found that between July 2021 and July 2022, over 1,200 drugs experienced drug price increases faster than inflation, with an average price increase of 31% and with several drugs experiencing price increases of over 500%. The result: record revenues and profits for drug companies. These massive year-over-year drug price increases occurred in the midst of the COVID-19 pandemic. During that time, our nation’s hospitals and health systems continued to put patients and communities first, caring for patients 24/7, regardless of their ability to pay, while experiencing not only these dramatic increases in drug costs, but also skyrocketing staffing and supply costs, as well as historic inflationary pressures. All of this left approximately half of America’s hospitals operating in the red — a reality that drug companies simply don’t face.
340B savings have been critical to many hospitals for weathering these financial challenges and ensuring their doors remain open and services remain available for their patients and communities. No matter what they say, drug companies have tried to undermine the 340B program at every opportunity, including unlawfully denying 340B pricing through community and specialty pharmacies. For the past three years, drug companies have held 340B patients and providers hostage by limiting access to 340B drugs with their unlawful and draconian contract pharmacy policies. Now they seek to codify their illegitimate actions in federal law.
For this reason, the PhRMA-led coalition’s list of proposals cannot be viewed as a serious attempt to “save” or “modernize” the 340B program. After all, the 340B program was created to prevent egregious pricing tactics by drug companies themselves. The AHA has developed a detailed response on why many of the coalition’s proposals would undermine the 340B program for both patients and providers.
These proposals, which involve no accountability on the part of drug companies, take aim at many hospitals participating in the program. But, they fail to recognize that these same hospitals are responsible for an overwhelming amount of care to the nation’s underserved populations, including 77% of care provided to the nation’s Medicaid patients. The obvious hypocrisy of their proposals to mandate greater hospital 340B transparency while drug companies continue to obfuscate their pricing decisions is striking. This is particularly true since the median price of a new drug on the market exceeded a staggering $200,000 for the first time in history — a price that is far from affordable or reasonable for the patients who need these often lifesaving drugs.
The mission of the 340B program is to improve access to care for underserved patients and communities around the country. No amount of half-truths, misleading statements, baseless attacks or thinly-veiled efforts to scale back the program’s benefits by drug companies will deter hospitals from delivering on this mission to all patients and communities they serve.