House Committee on E&C wall plaque
The House Energy & Commerce Health Subcommittee will review a draft drug shortages bill with 340B program implications.

U.S. House Subcommittee Could Discuss 340B on Two Consecutive Days This Month

U.S. House Republicans yesterday asked Department of Health and Human Services Secretary Xavier Becerra to testify March 29 about the Biden administration’s health care budget request.

Becerra will appear before the Energy & Commerce health subcommittee the day after it holds a hearing on ideas to drive down health care costs “through transparency and competition.” The 340B program is expected to be a significant focus of the March 28 hearing. Becerra could be questioned about 340B too on March 29. He might elaborate on HHS’s request to Congress last week to give the Health Resources and Services Administration general rulemaking authority over the 340B program so it can establish “reporting requirements and definitions for the use of [340B] savings and contract pharmacy utilization.”

Becerra also might be asked about the administration’s efforts to stop drug manufacturers from placing restrictions on access to 340B pricing in the contract pharmacy setting. Those efforts have been stalled due to federal court decisions that have allowed manufacturers to continue to place restrictions as the courts determine the legality of the drug company moves.

The hearings will be less than two weeks after Pharmaceutical Research and Manufacturers of America and the National Association of Community Health Centers’ electrifying announcement that they are working together to change 340B to benefit patients and “true safety-net providers.” Their 10-point manifesto could cause many disproportionate share hospitals to lose 340B eligibility. Remaining DSH hospitals also could enjoy less access to 340B pricing.

Rep. Doris Matsui (D-Calif.), who sits on the full E&C Committee, said last week that PhRMA and NACHC’s proposal “would play right into the hands of its authors, the drug manufacturers, and put money back into the pockets of Big Pharma.”

The E&C Committee announced the two hearings in news releases emailed to members of the press. As of this morning the committee still had not posted the news releases on the committee website, put the hearings on its calendar, or announced witnesses other than Becerra.

The potentially significant hearings for the 340B program will take place during days two and three of the three-day 340B Coalition annual winter conference in San Diego. While PhRMA and NACHC’s new 340B alliance is not on the conference agenda, it will be the subject of countless conversations there.

Hospitals that participate in 340B could take yet another hit on March 29. A new documentary film entitled “American Hospitals: Healing a Broken System” will get its first showing in Washington, D.C., that night. It is expected to focus mainly on private nonprofit hospitals, many of which qualify for and participate in 340B as DSH hospitals.

“Today hospital care is too often about money and power than serving the health needs of patients and the community,” a description of the film said. “[The documentary] examines the pernicious incentives driving health care’s astronomical pricing, its monopolistic practices and the pervasive inequities in access and treatment. The film identifies innovative solutions that deserve national attention to restore hospitals to their historic focus on community health at affordable cost.”

The film is produced by Richard Master, the CEO of a Pennsylvania manufacturer of picture frames, mirrors, and home décor products. Promotional materials for the film say Master “took a deep dive into the economics of the U.S. health-care system after his company was hit year after year with double-digit health insurance rate increases.” The hospital documentary is the fourth in a series. One of the earlier films, “Big Pharma: Market Failure,” looked at “extreme drug prices in the U.S. and how drug cost impacts on the public, on businesses and the overall U.S. economy.”

It is not known if 340B will come up in the new film. But its associate producer is Wendell Potter, a former communications director at health insurance company Cigna who became a whistleblower and now is a leading advocate of universal health care. Potter is highly regarded in liberal political circles.

Last month, Potter’s Substack site published a guest post entitled “The lunacy of 340B and Medicare’s inability to negotiate drug prices.” It was written by Chris Deacon, former legal counsel to ex-New Jersey Gov. Chris Christie and former state deputy attorney general. In the latter capacity, Deacon handled matters related to the state health benefits plan for New Jersey state government and school employees.

“The American Hospital Association and other beneficiaries of the 340B program seem to have a much stronger voice in Washington than the American taxpayer and consumer,” Deacon wrote. “Currently, there is no transparency about where” money earned from billing for 340B drugs at above purchase price “must be spent and there is mounting evidence that it is increasingly a source revenue for otherwise profitable institutions.” The last sentence links to The New York Times’ exposé about alleged 340B program misuse involving a Richmond, Va., hospital.

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