Senator Collins Raises Budget Issues Faced by Maine Hospitals that Qualify for Discounted Pharmaceuticals

Out of Maine’s 25 hospitals that qualify for the 340B program and receive an estimated collective benefit of $105 million a year, 14 hospitals have already reported negative operating margins.

Click HERE to watch Senator Collins’ Q&A with Ms. Maxwell

Note to assignment editors and news directors: Click HERE for a high-quality video of Senator Collins’ Q&A at the HELP Committee hearing

 

Washington, D.C. – At a Senate Health Committee hearing titled “Examining Oversight Reports on the 340B Drug Pricing Program,” U.S. Senator Susan Collins discussed the issues facing Maine’s hospitals who qualify for the 340B Drug Discount Program and questioned the witnesses about what can be done to increase transparency.

 

The 340B Program requires pharmaceutical manufactures to provide prescription drugs to qualifying hospitals and other covered entities at or below a “340B ceiling price” established by the Health Resources and Services Administration (HRSA). 

 

Out of Maine’s 25 hospitals that qualify for the 340B programs and receive an estimated collective benefit of $105 million a year, 14 hospitals have already reported negative operating margins.  Part of what is driving the narrow hospital margins and losses is the 30 percent increase in drug spending over the past four years for Maine’s hospitals.   Eastern Maine Health System recently joined the American Hospital Association in suing HHS over a final rule involving the 340B program that would reduce Medicare reimbursements for outpatient medications by 28 percent.

 

At the hearing, Senator Collins raised a concern that was brought to her attention by the Maine Hospital Association and questioned Ann Maxwell, Assistant Inspector General for Evaluation and Inspections at the Office of the Inspector General at the Department of Health and Human Services, about her observations and recommendations for the 340B program.

 

“The Hospital Association in Maine has told me that if we were to limit or eliminate the 340B benefit it would wipe out the positive operating margins for those hospitals that actually are in the black,” said Senator Collins.  “You testified about the lack of transparency to ensure that the 340B providers are not overpaying pharmaceutical manufacturers.  What can we do to increase transparency and ensure that overpayments are not occurring?”

 

“It's a really important [question] and one that speaks to a number of our recommendations around transparency,” said Ms. Maxwell.  “We think the best way to provide better transparency is for HRSA to share the 340B ceiling prices directly with providers as well as states.”

 

“Is there any reason that HRSA is not doing that now?” Senator Collins asked.

 

“In terms of providers, HRSA does now currently have the authority – that was granted in 2010 with the ACA – but they've not completed their secure data system,” replied Ms. Maxwell.  “In terms of sharing the information with states, that would require more authority from Congress for HRSA to be able to share that.”

 

Also testifying at the hearing was Debra A. Draper, Ph. D., Director of the Health Care Team at the U.S. Government Accountability Office.

 

Last week, Senator Collins, the Chairman of the Senate Aging Committee, held a hearing on the soaring price of insulin and found that one cause for the spike in cost was due to a lack of transparency.

 

Click HERE to read the witnesses’ testimonies.