U.S. Health Resources and Services Administration Administrator Carole Johnson said on Capitol Hill yesterday that HRSA would welcome congressional help ensuring there is “accountability and transparency” in the 340B program.
Johnson was answering questions from Rep. Morgan Griffith (R-Va.) during a House Energy & Commerce health subcommittee hearing on HRSA activities other than 340B. Griffith, chair of the E&C oversight subcommittee, asked Johnson if Congress needed to pass legislation to address health system exploitation of 340B and pharmacy benefit manager poaching of community health centers’ 340B savings.
“Some of the nonprofit hospital systems, in my opinion, have been exploiting the 340B program to reap huge profits to fuel expansion into affluent communities, instead of continued reinvestment in communities of greatest need,” Griffith said. He cited the example of an Ohio-based health system’s alleged misuse of a Richmond, Va., hospital’s 340B status, brought to light by The New York Times. Griffith asked about HRSA’s letters to multiple hospitals asking how they determine patient eligibility for 340B drugs, how they define, track, and use 340B savings, and how they ensure 340B compliance in offsite outpatient locations.
“What do you plan to do with that information when you get it? And if you don’t get it, should we be passing legislation?” Griffith asked.
“We need to make sure that there’s accountability and transparency in the system,” Johnson answered. “Our recent letters to a number of covered entities were part of that process. Our request in the President’s budget that we actually get specific designated authority for reporting for covered entities—to report on the savings from the program and how that’s benefiting the communities they serve—is a specific ask we have made in the budget. We look forward to working with you on that. We really would benefit from your assistance in making sure that we have all the tools necessary.”
Griffith next asked Johnson about reports “that pharmacy benefit managers are taking predatory actions against the health centers” and forcing them to sign contracts with provisions that “give the [340B] savings or part of the savings back to the PBM instead of helping the poor folks who really need these services.”
“Do you all have legal authority to address the matter?” Griffith asked.
Johnson Brings Up Manufacturer Actions on Contract Pharmacies
“I would ask for your assistance here,” Johnson said. “We also have had the issue of manufacturers not selling to covered entities by their contract pharmacy arrangements…. I share your view that accountability in the system is critical and would love to work with you on that.”
