Dems, Re­pub­li­cans split on 340B drug pric­ing pro­gram in Sen­ate hear­ing

The di­vid­ing line be­tween Sen­ate De­moc­rats and Re­pub­li­cans on the 340B drug pric­ing pro­gram was set on Thurs­day, with De­moc­rats sid­ing with the hos­pi­tals, say­ing the sav­ings from the pro­gram is des­per­ate­ly need­ed for the poor­est pop­u­la­tions, while Re­pub­li­cans took the side of drug­mak­ers, say­ing the pro­gram is be­ing abused and needs to be re­formed.

But the hear­ing al­so put the spot­light on the lack of trans­paren­cy from both the phar­ma­ceu­ti­cal and hos­pi­tal in­dus­tries, as nei­ther side could agree to some ba­sic sta­tis­tics, such as what per­cent of the to­tal drug spend in the US goes in­to the 340B pro­gram.

Lamar Alexan­der

For in­stance, the Health Re­sources & Ser­vices Ad­min­is­tra­tion, which over­sees the pro­gram, says that some­where be­tween 1% and 2% of the na­tion’s drug spend is at­trib­uted to the 340B pro­gram.

But Sen Lamar Alexan­der (R-TN) on Thurs­day ques­tioned what per­cent of what Amer­i­cans spend on pre­scrip­tion drugs is avail­able to safe­ty net hos­pi­tals and clin­ics for the pur­pos­es of 340B.

“Is it $6 bil­lion or $8 bil­lion or $14 bil­lion? If it’s 1 or 2%, well that’s just a tax on phar­ma­ceu­ti­cal com­pa­nies that we’re spend­ing for a good pur­pose, but if it’s 6% to 8%, then that’s a pret­ty big tax. I’d like to get those fig­ures,” Alexan­der said.

Lori Reil­ly

Lori Reil­ly, ex­ec­u­tive vice pres­i­dent of the lob­by­ing group PhRMA, told law­mak­ers that the to­tal spend on dis­counts by phar­ma­ceu­ti­cal com­pa­nies was $8 bil­lion in 2016, and that the to­tal 2016 spend on phar­ma­ceu­ti­cals in the US was “in the $390 bil­lion range,” though she could not con­firm an ex­act fig­ure to Alexan­der.

Sen Eliz­a­beth War­ren (D-MA), mean­while, said the size of the US drug mar­ket in 2015 was $457 bil­lion, while point­ing out that phar­ma­ceu­ti­cal com­pa­nies’ mar­gins were sig­nif­i­cant­ly high­er (she said six times as high) than hos­pi­tals’ mar­gins.

Eliz­a­beth War­ren

Pew Char­i­ta­ble Trusts, mean­while, re­cent­ly spot­light­ed the var­i­ous es­ti­mates and pro­jec­tions on drug spend­ing in the US, not­ing the dif­fer­ences among dif­fer­ent groups.

And though PhRMA’s Reil­ly said ear­li­er in the hear­ing that phar­ma­ceu­ti­cal com­pa­nies “do not want this pro­gram to dis­ap­pear,” War­ren took is­sue with PhRMA’s ar­gu­ment that the 340B rais­es drug prices.

“If 340B didn’t ex­ist, drug com­pa­nies would have an ex­tra $6 bil­lion in their pock­et, that’s less than 1% of glob­al phar­ma­ceu­ti­cal sales rev­enue,” War­ren said. “The loss that they’re kick­ing and scream­ing about is a tiny frac­tion of the many bil­lions of dol­lars they pull down every year in prof­its.”

Rep­re­sen­ta­tives of health cen­ters and hos­pi­tals, mean­while, not­ed that re­forms to low­er what drug­mak­ers spend on 340B dis­counts would hurt.

How­ev­er, re­form and more over­sight may still come.

study pub­lished in Health Af­fairs in 2014 found that 340B hos­pi­tals are ex­pand­ing their base in­to com­mu­ni­ties that tend to be af­flu­ent and well-in­sured, which runs counter to the ob­jec­tives of the pro­gram. The Al­liance for In­tegri­ty and Re­form of 340B, backed by the bio­phar­ma in­dus­try and oth­er groups, al­so re­leased a re­port that found in 2015, 61% of par­tic­i­pants spent less on char­i­ty care com­pared to both 2014 and 2013 de­spite ad­di­tion­al rev­enue re­ceived.


First pub­lished here. Reg­u­la­to­ry Fo­cus is the flag­ship on­line pub­li­ca­tion of the Reg­u­la­to­ry Af­fairs Pro­fes­sion­als So­ci­ety (RAPS), the largest glob­al or­ga­ni­za­tion of and for those in­volved with the reg­u­la­tion of health­care and re­lat­ed prod­ucts, in­clud­ing med­ical de­vices, phar­ma­ceu­ti­cals, bi­o­log­ics and nu­tri­tion­al prod­ucts. Email news@raps.org for more in­for­ma­tion.

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