While the debate about the 340B drug prescription payment cuts rages on, the White House’s Council of Economic Advisers suggested that reducing U.S. drug prices and stimulating innovation aren't mutually exclusive.
The CEA also suggested more oversight of the 340B drug payment program. The report puts forward the idea of a single entity to set prices “at which the eligible providers can buy drugs. Such an agency would require better guidance for how reduced eligibility and profiteering can be implemented going forward. “
Meanwhile, the American Hospital Association cast doubt on a recent report in the New England Journal of Medicine (NEJM), which said the 340B project “drives hospital/physician consolidation while not expanding care to low-income populations or improving their mortality rates.”
In its report, the CEA offered ways that the CMS can lower domestic drug prices while the federal government reforms the FDA to “encourage more robust price competition.” The CEA said the federal government also needs to look into how its policies inflate drug prices and temper price competition. The report added that incentives for pharmaceutical innovation are possible while promoting lower drug prices.
President Trump blasted drugmakers for "getting away with murder" while campaigning for president and since, but his proposals have largely been seen as pharma-friendly.
“The U.S. biopharmaceutical industry is the engine of worldwide biopharmaceutical innovation and an important part of our economy. Preserving this industry and encouraging it to innovate while making drugs more available and affordable for all Americans is an attainable goal," The CEA wrote.
The changes to the 340B program are expected to save $1.6 billion, but that money will come from cutting payments to hospitals, which rely on the program to help cover other services. Hospitals, especially safety net hospitals, said they use the savings to help provide uncompensated care, which the AHA said is already on the rise.
However, the CEA charged that hospitals are profiting from the program. "The 340B statute does not dictate how covered entities use the revenue. They are not obligated to pass the discount savings onto patients nor are they required to report how they served low-income or vulnerable population," said the CEA.
Meanwhile, the AHA took aim at a recent NEJM report regarding the 340B program. The AHA said the study overly relied on fee-for-service Medicare data though FFS beneficiaries only account for at most 23% of low-income people. The largest group of low-income people are children and then the working poor, AHA said.
The AHA said 340B hospitals could have provided background to the study authors on how the payments are improving patient health. "With respect to this study, the conclusion is clear: the underlying methodology is so deeply flawed that the conclusions are invalidated," said the AHA.
The AHA, as well as the Association of American Medical Colleges, America’s Essential Hospitals, Eastern Maine Healthcare Systems, Henry Ford Health System and Fletcher Hospital, Inc., filed a lawsuit in November to block the 340B payment cut. After a judge dismissed the lawsuit in December because the policy had not yet gone into effect, the organizations appealed the judge’s decision.
There’s also disagreement on Capitol Hill about the 340B program and cuts. More than 200 members of the House of Representatives sent a letter asking CMS to abandon the cuts. Meanwhile, Republicans in Congress have spoken out about the program's growth rate and lack of transparency, accountability and reporting.