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E&C Leaders to Azar: Protect the 340B Drug Discount Program

Sep 3, 2020
Press Release

Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ), Health Subcommittee Chairwoman Anna G. Eshoo (D-CA) and Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO) wrote to Health and Human Services (HHS) Secretary Alex Azar today to express concern following several drug manufacturers’ actions that threaten to undermine the 340B Drug Pricing Program, which helps expand access to care for uninsured and low-income patients as well as those living in rural areas.

“We write today to express our strong concerns about several drug manufacturers’ actions that threaten to undermine the 340B Drug Pricing Program,” Pallone, Eshoo and DeGette wrote to Azar.  “The 340B Program is a critical tool in the fight to lower drug prices, and helps safety net health providers, including Federally Qualified Health Centers and disproportionate share hospitals, among others, to provide frontline care in the midst of the coronavirus disease of 2019 (COVID-19) pandemic.  It is critical that the Administration maintains program integrity to ensure this care is not interrupted.”

Under the 340B Program, drug manufacturers participating in Medicaid are required to provide discounts on outpatient prescription drugs to certain safety net health providers, called “covered entities,” who can then use those savings to expand and improve care for the uninsured and underinsured.  In recent weeks, several drug manufacturers have announced that they would institute new burdensome requirements on covered entities beyond the scope of the 340B statute or stop deliveries to contract pharmacies that dispense drugs to patients on behalf of covered entities.

“[T]here is no provision of law which allows participating manufacturers to deny service to covered entities or choose where covered entities may dispense the drugs they purchase,” the three Committee leaders continued in their letter to Azar.  “Failure of manufacturers to offer drugs at the appropriate 340B price may violate the 340B statute’s requirements or result in overcharges to covered entities, in contravention of the law.” 

In the letter, the three Committee leaders expressed hope that drug manufacturers would retreat from these announced policies in order to prevent patients from losing access to care, but cited HHS’ obligation to ensure drug manufacturers comply with the law and use the tools provided by Congress to enforce compliance.   

“As we confront the COVID-19 pandemic, patients are relying on 340B covered entities to go the extra mile to provide care,” the three Committee leaders concluded.  “We look forward to working with you to ensure access to care is not threatened and all participants in the 340B program are fulfilling their obligations under the law.”

To read the full letter, click HERE.