On May 15, 2018, the Senate Committee on Health, Education, Labor and Pensions held a hearing entitled “Examining Oversight Report on the 340B Drug Pricing Program.” Led by Subcommittee Chairman Sen. Lamar Alexander (R-TN), the hearing focused on the purpose of the 340B Program and contemplated whether a change in the law would better fulfill its purpose.
The hearing featured a single panel of two government witnesses: Ann Maxwell from the HHS Office of the Inspector General (OIG) and Debra Draper from the Government Accountability Office (GAO). Both witnesses highlighted the inadequacy of the Health Resources and Services Administration (“HRSA”) oversight and the need for greater program integrity. Ms. Maxwell identified two key vulnerabilities: “(1) a lack of transparency that prevents ensuring that 340B providers are not overpaying pharmaceutical manufacturers and that State Medicaid programs are not overpaying 340B providers; and (2) a lack of clarity regarding program rules that creates uncertainty, resulting in inconsistent program implementation and limited accountability.” Further, Dr. Draper explained “there’s some ambiguity around what is the actual intent of the program” and clarifications would “go a long way” in creating guidance and rules for additional transparency.
Committee members generally agreed improvements are necessary, but some members cautioned against haphazardly limiting or eliminating the 340B Program. For example, Sen. Susan Collins (R-ME) and Sen. Tina Smith (D-MN) identified hospitals that have remained operational because of the savings generated from 340B. To strengthen the program, Subcommittee Ranking Member Sen. Patty Murray (D-WA) argued for greater accountability: “If there is misuse or abuse in the system—we should hold those actors accountable.” Further, Sen. Tim Kaine (D-VA) noted that “we should be systematically auditing the manufacturers” to improve program integrity.
A link to the hearing and accompanying documents may be found here. The Committee will hold its next hearing later this year with representatives from HRSA.
