The
Department
of
Health
and
Human
Services
is
scrapping
the
340B
Drug
Pricing
Program’s
rebate
model,
according
to
a
Thursday
court
filing.
Hospitals
are
reacting
with
glee,
as
the
rebate
model
would
have
added
administrative
headaches
and
forced
them
to
return
millions
in
discounts.
The
model
was
slated
to
go
live
on
the
first
of
the
year,
but
courts
blocked
implementation
before
it
could
take
effect,
citing
procedural
and
legal
issues.
The
340B
program
allows
hospitals
to
buy
outpatient
drugs
at
steep
discounts,
with
the
purported
purpose
of
helping
them
fund
care
for
low-income
and
uninsured
patients.
The
now-axed
rebate
model
would
have
invited
drugmakers
to
participate
voluntarily
in
a
rebate-based
discount
system.
Basically,
instead
of
the
provider
receiving
a
discount
upfront
at
purchase,
the
340B
discount
would
be
applied
after
purchase
via
rebate
—
and
subject
to
tedious
data
submission
requirements.
The
pilot
aimed
to
boost
transparency
and
prevent
duplicate
discounts,
but
it
risked
introducing
financial
challenges
and
added
administrative
burdens
that
would
have
likely
disproportionately
affected
the
smaller,
safety
net
providers
that
the
340B
program
was
initially
designed
to
assist
when
it
was
established
in
1992.
For
instance,
Bill
Keeton
—
chief
advocacy
officer
at
Vivent
Health,
a
nationwide
provider
of
HIV
care
for
low-income
patients
—
told
MedCity
News
in
November
that
the
model
would
create
difficult
cash
flow
problems
for
healthcare
providers,
especially
organizations
like
his
that
have
to
buy
HIV
medications,
which
are
incredibly
expensive.
Biktary,
the
most
popular
medication
used
to
treat
HIV,
costs
about
$4,200
per
month.
Under
340B,
clinics
pay
about
half
of
that,
but
the
rebate
model
could
force
clinics
to
front
the
full
cost
temporarily.
Because
of
these
problems,
HHS
has
faced
several
lawsuits
aiming
to
kill
the
model,
most
notably
one
filed
in
December
by
the
American
Hospital
Association
(AHA)
and
a
coalition
of
other
hospital
groups.
Now
that
the
rebate
model
is
being
thrown
out,
hospitals
are
relieved.
“A
rebate
program
that
undermines
safety-net
hospitals’
ability
to
offer
more
comprehensive
care
would
only
harm
the
nation’s
most
vulnerable
communities,”
AHA
CEO
Rick
Pollack
said
in
a
statement.
Tom
Kraus,
vice
president
of
government
relations
at
the
American
Society
of
Health-System
Pharmacists,
also
applauded
the
move,
calling
the
rebate
model
“unworkable
and
a
threat
to
program
integrity”
in
his
statement.
“Rebates
in
both
the
340B
program
and
the
Inflation
Reduction
Act
negotiated
pricing
program
improperly
shift
costs
from
manufacturers
to
providers,
effectively
raising
the
costs
of
medications
in
direct
opposition
to
Congressional
intent.
Providers
should
not
shoulder
increased
costs
for
programs
intended
to
require
manufacturer
discounts,”
he
stated.
If
HHS
seeks
to
reform
the
340B
program’s
administrative
processes
going
forward,
it
has
agreed
to
issue
a
new
announcement
and
receive
comments
from
the
public.
Photo:
Anastassiya
Bezhekeneva,
Getty
Images