The Health Resources and Services Administration’s (HRSA) proposed omnibus guidance for the 340B Drug Pricing Program would jeopardize hospitals’ ability to serve vulnerable populations, including low-income and uninsured individuals and patients receiving cancer treatments, AHA told the agency in comments submitted Oct. 27.

“The AHA urges HRSA to revise significantly its proposed guidance to allow hospitals to continue their work advancing the health of individuals and communities, even in the face of the skyrocketing cost of pharmaceuticals,” wrote AHA Executive Vice President Tom Nickels.

Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell many outpatient drugs at discounted prices to health care organizations that care for many uninsured and low-income patients. This, in turn, allows eligible hospitals to stretch limited federal resources to reduce the price of outpatient pharmaceuticals for patients and expand health services to their communities.

 HRSA, the federal agency responsible for administering the 340B program, Aug. 27 proposed guidance that would make a number of policy changes to how the 340B program is administered.

 Hospital leaders shared the AHA’s concerns in their comments on the guidance.

 “While I appreciate the efforts of HRSA to provide clarity to the 340B program, the proposed guidance appears to add operational burden and further limitations on covered entities to achieve the intent of the program, ‘to stretch scarce federal resources,’” Derek Johnson, business development officer at Franklin Hospital in Benton, Ill., wrote in a letter to HRSA.

 He said the 340B program is critical to helping safety-net hospitals in his state, especially as they grapple with upcoming Medicare cuts and uncertainty about Medicaid funding.

 “Thanks to the 340B Program, Franklin Hospital is able to help patients with the high cost of drugs so they are not forced to choose between basic necessities – food, housing, and clothing – and their health because they cannot afford their prescribed medications,” Johnson wrote.  

 The AHA expressed strong concerns about many of the agency’s proposals related to defining patient eligibility for the program, saying that they “would narrow inappropriately the number of drugs that qualify for 340B pricing,” and “threaten access to care for patients who need care the most.”

 In addition, the AHA opposed HRSA’s proposal to exclude from 340B pricing outpatient drugs that are reimbursed as part of a bundled Medicaid payment, and it urged HRSA to withdraw a proposal so that patients receiving infusion services provided at 340B hospitals or their outpatient sites continue to qualify for 340B drug discount pricing.

 Allegan General Hospital, a 25-bed hospital that serves a predominantly middle-to-low-income population in rural Michigan, echoed AHA’s opposition to HRSA’s proposal and is worried about the detrimental effect it could have on patients’ access to care, particularly patients who receive chemotherapy services.

 “We serve a population that would have to travel upwards of 30 miles in very harsh Michigan weather if we did not exist,” wrote Gerald Barbini, the hospital’s president and CEO. “Many of our patients do not have the resources or ability to travel and for them access would be eliminated.”

 The AHA also submitted comments to HRSA on proposals related to hospital eligibility and off-site outpatient clinics, group purchasing organizations, contract pharmacy arrangements, duplicate discounts, program integrity and drug manufacturer requirements. 

For more on AHA’s reaction to the proposed guidance, see the Oct. 27 AHASTAT blog post.