Andrea Palm, President Biden’s pick to be the number two official at the U.S. Health and Human Services Department (HHS), pledged during her U.S. Senate confirmation hearing this morning to make sure that the 340B program “is working as it is supposed to be working,” in response to a senior Republican senator’s concerns about drugmakers denying 340B discounts on drugs dispensed by contract pharmacies and pharmacy benefit managers (PBMs) imposing conditions on 340B hospitals’ drug reimbursement.
During the Senate Finance Committee hearing, Senate Minority Whip John Thune (R-S.D.), second in GOP seniority only to Minority Leader Mitch McConnell (R-Ky.), asked Palm how HHS would respond to such drug manufacturer and PBM actions if confirmed.
“Thank you, senator, for this question and you’re right—I recall from my previous time at HHS that the 340B program was often a topic of conversation and a challenge,” said Palm, who served at HHS during the Obama administration and now leads Wisconsin’s Department of Health Services.
“So you’re right, there are things that we can and need to be doing in that space. I think to your point, it’s a critical program for our safety net providers and for the low-income folks that are able to access drugs through the program and I, if confirmed, would look forward to the opportunity to make sure that the program is working as it’s supposed to be working, and that the oversight and implementation are appropriate so that we really are implementing legislative intent and getting to our safety net providers and low income communities the access that they need,” she added.
“Thank you, and I’m going to hold you to that and follow up with you, but thank you for that answer,” Thune replied. “You’re absolutely right, it needs to be fixed and I hope that, once confirmed, that you help us get on top of this issue as quickly as possible.”
Thune is a long-time champion of 340B providers. During HHS Secretary Xavier Becerra’s confirmation hearing in February, Thune asked Becerra to “commit to ensuring the strength of the 340B program and the community that it supports.”
In the lead-up to his question to Palm, Thune said the 340B program “is enormously important to hospitals across South Dakota and across the region.”
“We’ve heard concerns from covered entities in my state about actions taken by manufacturers, not reimbursing contract pharmacies and all of a sudden deciding to dispense with that, which they have questionable authority to do,” Thune said. “And now, PBMs, who are imposing conditions on hospitals in order to get reimbursed—to get payment—and that effects their ability to continue to provide a robust community benefit.”
“It’s an issue that’s been hanging around for a long time, it’s a program that Congress obviously has expressed support for in law, and it seems like a lot of the entities that are designed to make it work are trying intentionally to undermine the program,” Thune said.
Palm appeared before the Finance Committee together with Chiquita Brooks-LaSure, Biden’s nominee to serve as administrator of the Centers for Medicare & Medicaid Services (CMS). Sen. Bill Cassidy (R-La.), a frequent critic of hospitals that participate in the 340B program, asked no questions about the program during today’s hearing. Cassidy opposed Becerra’s nomination to run HHS, based in part on his dissatisfaction with Becerra’s answers to his questions about 340B.
