Changes to 340B Drug Pricing Program could be devastating to rural hospitals in Kansas
Too often Kansans hear the rotors of another air ambulance carrying a patient from a rural area to an urban health care facility to receive treatment. Like a beating drum, the sound reminds us of the dwindling health care options in rural parts of the state and the many health care challenges that exist for the patients that live there.
Kansas has lost nine rural hospitals since 2005, and more than half of the remaining 105 rural hospitals in the state are operating at a financial loss and risk closure. It is a plague across the country, but particularly acute in Kansas, where rural, densely settled rural and frontier counties make up 85% of the state.
There are several universal troubles which if overcome would significantly aid rural health care, but one of the considerable hidden risks are costs related to pharmaceuticals. Recently, prescriptions have dramatically increased in cost, even outpacing the rate of inflation. This has led to 41% of Kansans opting not to fill at least one prescription because of cost at some point the past three years.
Forestalling medications increases health issues particularly in low-income households, which are disproportionately located in rural areas, creating more demand on the diminishing health care resources in these areas. One way to provide low-income rural hospitals and the patients they serve financial support is through access to discounted pharmaceuticals through the 340B Drug Pricing Program. Given that 9% of Kansans are lacking health care insurance, access to free or discounted medications enhances critical health care services.
The 340B Program, initiated in 1992, safeguards access to lifesaving pharmaceuticals and health services in our most vulnerable communities. It not only provides medications at a lower cost but it also gives hospitals the financial support to provide more charity care and comprehensive services including free vaccines, oncology, mental health and substance abuse services.
There are headwinds resisting the 340B Program blowing in from the private sector and government. Even though the 340B program operates at zero cost to the taxpayer and medications under it comprise only 3.6% of the total drug market, some pharmaceutical companies have taken measures that could undermine the program. They are also gaining traction in convincing some policymakers in Washington that the program should be significantly curtailed or ended.
Specifically, some drug companies have tried to convert the 340B Program to a back-end rebate, which would effectively force safety-net hospitals serving rural and low-income areas to front their pharmaceutical costs. This would place an undue burden on these facilities as they await repayment at an unspecified time in the future. Further, some drug companies have illegally limited discounts to selected pharmacies, inconveniencing patients and potentially keeping them from receiving the drugs and therapies they need.
This new Congress, meanwhile, introduced a 340B related bill shortly after it was sworn in. HR 198, the Drug Pricing and Transparency Accountability Act, is intended to “increase reporting requirements and transparency requirements in the 340B Drug Pricing Program.” While well-intentioned, the bill requires facilities enrolled in the 340B Program to accept overwhelming administrative burdens including annual recertifications, expensive audits, more arduous red tape and limits on enrollments.
If the bill became law, it could force health care centers out of the 340B program and prevent new ones from joining, leaving more low-income patients and rural hospitals at risk.
Detractors argue the 340B Program has grown too quickly and needs more accountability, but these apprehensions aren't reasons to significantly alter or even cancel the program or prevent new program entrants. Since there is no sign of relief from rising pharmaceutical prices, the 340B Program remains critical to supporting health care in rural areas and where low-income patients are served.
Concerns over program growth and calls for oversight can be addressed by Congress, but that focus should be narrowly tailored. Addressing waste, fraud, abuse and streamlining reporting and accountability requirements are reasonable goals but can be realized without major changes.
That would best serve low-income patients and address in part challenges facing health care providers, including rural hospitals in Kansas and across the country.
Todd Tiahrt is a former member of Congress serving on the House Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies.
This article originally appeared on Topeka Capital-Journal: 340B Drug Pricing Program changes could hurt rural hospitals in Kansas
