Screenshot of 340B drug discount program story
The 340B program “is buckling under its own weight and overdue for reform,” BIO says in its blog.

340B “Overdue for Reform,” Industry Trade Group BIO Says in Blog

The 340B program “is buckling under its own weight and overdue for reform,” biotechnology industry trade group BIO said last week in its blog.

BIO, which is marking its 30th anniversary in 2023, has experienced inner turmoil in recent years including the departure of its CEO Dr. Michelle McMurry-Heath after a short tenure. Pharmaceutical Research and Manufacturers of America mostly overshadows it on 340B matters.

The Jan. 5 article on touches on proposed regulations to replace the 340B administrative dispute resolution process; 340B contract pharmacy growth; criticism about how hospitals use 340B savings and where they locate 340B-registered outpatient sites; reports of difficulty preventing 340B drug diversion and duplicate discounts; and the U.S. Supreme Court June 2022 decision striking down the deep cut in Medicare Part B drug reimbursement for hospitals’ 340B-acquired drugs.

Regarding the 340B ADR proposed rule, BIO said that while it adds “positive changes such as a reconsideration process and a means to bar disputes that are subject to litigation, manufacturers are concerned that the proposed rule makes it too easy for covered entities to bring disputes to the ADR process and needlessly modifies a defined process using the Federal Civil Rules of Procedure into one that is obscure with no sense of how decisions will be made.”

PhRMA sued the federal government over the current ADR regulation in January 2021. The case is still pending in a federal district court in Maryland.

About 340B generally, BIO said “there is limited oversight of the program, poor transparency in how covered entities use funds generated by the program, and murkiness when it comes to the validity of contract pharmacies and hospitals that are jumping on board.”

“In essence, hospitals are taking advantage of a system meant to help patients,” it said. “So it is not surprising that drug makers are pushing back.”

“Suffice to say that the 340B program had a big year in 2022,” the article concludes. “Yet, little is expected to change this year as parties on all sides of the issue try to contend with the behemoth program. One thing is for certain: If the program does not ultimately serve at-risk and underserved patient populations, then it has outlived its usefulness.”

This is the blog’s second deep dive on 340B in four months. It ran a long critique of the program in September.

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