There is a federal statute — the 340B drug discount program — that helps safety-net hospitals like the Erlanger Health System to purchase medications at discounted pricing for needy patients. And now the Pharmaceutical Research and Manufacturers Association of America is leading an effort to restrict and possibly repeal the 340B program.
President George H.W. Bush and Congress created the 340B drug discount program with bipartisan support more than 20 years ago. The program is not a financial burden on taxpayers because there is no federal funding. The for-profit pharmaceutical industry provides the funds. In fact, the program actually saves taxpayers money because the discounted drugs help keep people healthy through appropriate access to medications. This is significant for public, safety-net hospitals.
Medicines purchased through the program represent only 2 percent of the annual $325 billion U.S. pharmaceutical market — a minuscule amount compared to the patient benefits. And the highly profitable pharmaceutical industry wants to change the rules for providing these discounts to hospitals.
The 340B program allows safety-net hospitals such as Erlanger to purchase medications for eligible patients at discounted pricing. For Erlanger, this means a savings of $9 million annually. Those savings help fund our community-based health services and over $92 million in uncompensated health care.
An example of an Erlanger program which is fully funded by these 340B savings is the pharmacy at the Dodson Avenue Community Health Center.
This pharmacy offers significantly reduced pricing to make drugs more affordable. For those who need instructions on how to correctly take their medications, they receive face-to-face counseling with a pharmacist who is certified to provide medication therapy, adherence and disease management services.
The Dodson Avenue pharmacy has dramatically reduced the multiple barriers of medication availability, accessibility, cost, and management for low-income patients. The 340B drug discount program supports Erlanger’s effort to provide these critical services that help keep local residents healthy and out of the hospital.
Another example of the 340B discount drug program’s benefits is the free delivery of approximately 42,000 prescriptions to over 3,000 eligible Hamilton County patients every year.
This year, the Erlanger Health System will provide more than $92 million in healthcare services to our region that will not be reimbursed by any insurer or government entity. The pharmaceutical industry wants to restrict or eliminate the 340B drug program savings to Erlanger and other safety-net hospitals — reductions that will force cutbacks on treatment and services to low-income outpatients or push the costs of these critical services to taxpayers.
The pharmaceutical industry wants Congress to revise or repeal the 340B law. At stake is the health of some of our community’s most vulnerable residents. They will have the most to lose if drug discounts for the needy are no longer available to hospitals like Erlanger. The right choice is to maintain this safety net and the discounted medications for those in need.
Kevin M. Spiegel is president and CEO of the Erlanger Health System and assistant professor in the College of Medicine at the University of Tennessee.