CEOs of two U.S. health systems testified June 4 before a House subcommittee on the oversight of the 340B drug pricing program, advocating for the preservation of the protections that have been in place for hospitals and patients since 1992.
Matthew Perry, president and CEO of Zanesville, Ohio-based Genesis Healthcare System, and Sue Veer, president and CEO of Greenwood, S.C.-based Carolina Health Center, recounted to the Oversight and Investigations Subcommittee examples of how the 340B program protects patients.
The 340B program was established by Congress to allow qualifying hospitals and clinics that treat low-income and uninsured patients to purchase some drugs at a discounted rate between 25% and 50%.
"We serve a disproportionate share of Medicaid or low-income Medicare patients [at Genesis]. Our percentage is 17% and we recertify with [the Health Resources and Services Administration] annually," Mr. Perry told the committee. "340B is a lifeline for Genesis. Government health programs chronically underpay for our care, and we rely on 340B savings to fill the gap; we save about $56 million a year through 340B discounts."
In her testimony, Ms. Veer echoed much of what Mr. Perry described regarding her system serving a high proportion of patients who qualify for federal health programs such as Medicaid or Medicare and how the loss of protections from the 340B program could hurt hospitals and patients.
"It's really critical," Ms. Veer said during the hearing. "340B helps to promote that [accessibility] in two ways one is we're able to provide those patients with affordable medications and the other, is as I said earlier, that [Carolina Health] Center has the highest rate of uninsured and underinsured patients, and consequently we would not be able to cover the cost of keeping that practice open without 340B."
The House subcommittee memo outlining the hearing noted that the 340B program is "indispensable" to many hospitals and patients, but underscored that the program has "longstanding challenges" that the subcommittee has been assigned to address as the program continues to grow rapidly.
Since 2018, the 340B program has seen 129.4% more participation, and Congress anticipates that trajectory will continue.
The existing issues with the 340B, the memo said, are "due to a lack of regulatory infrastructure, administrative controls, and legislative guidance, which have led to an exploitation of the program by bad actors and unintended consequences across consolidation and prescribing practices by physicians and hospital systems that have led to overall higher costs for patients."