The House Committee on Energy and Commerce held a hearing this week on the 340B drug program. The committee discussed the findings from a two-year review of the federal discount drug operation program.
The 340B program, established in 1992, provides Medicare payments for outpatient drugs to hospitals serving high volumes of low-income patients. Drug purchases through 340B have steadily increased in recent years, growing by 30 percent in 2016, which totals $16 billion.
Recently, the program has come under some criticism and the report contained recommendations for increased transparency and accountability, enhancing Health Resources & Services Administration’s (HRSA) authority over entities applying to the program and implementing an independent audit system to ensure compliance.
Late last year, the American Hospital Association (AHA) and other litigants filed a lawsuit against the Department of Health & Human Services to prevent proposed cuts to the program. The initial case was dismissed, but the AHA appealed the case with a request to expedite the hearing schedule.
The appeal was accepted, ensuring completion of all briefing in the case by the beginning of April. As a part of the appeal, SDAHO joined together with more than 30 other state associations to submit an amicus “friend of the court” brief. The brief highlights real life examples from Sanford and Avera Health Systems of the negative impacts resulting from the funding cuts that took effect at the beginning of the year.