In 1992, Congress created the 340B drug discount program with the mission of enabling its covered entities “to stretch, scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”  The program has been critical in helping hospitals and other health care providers ensure that their patients get access to affordable medications and quality health care.

While SNHPA and its more than 500 member safety net hospitals applaud Congress for expanding the program and making other improvements, we are concerned that it missed a tremendous opportunity to address a significant flaw with the program.  For over a decade, safety net hospitals have been unable to access discounted pharmaceuticals for patients once they are admitted into the hospital.   

SNHPA is extremely disappointed that this common sense provision was removed at the last minute from the health care reform legislation despite being included in the bill that passed the U.S. Senate in December.

There simply is no sound policy rationale for allowing hospitals access to 340B discounted drugs in the outpatient setting and not the inpatient setting.  340B hospitals are forced to pay significantly more for a drug administered to a patient admitted to the hospital than they do for the same drug prescribed on an outpatient basis.

An extension of 340B to the inpatient setting would also result in significant savings for the federal government.  According to the Congressional Budget Office, extending the 340B drug discount would save Medicaid $1.2 billion over the next decade.  State Medicaid agencies would gain similar savings through inpatient 340B discounts.

It is SNHPA’s hope that Congress and the Obama Administration revisit the idea of extending 340B discounts to the inpatient setting this year.  340B is a unique program that not only improves access to affordable care, but can also help finance reform efforts at no cost to taxpayers.  We believe that any health care reform initiative that goes forward without providing 340B inpatient savings to safety net hospitals is incomplete.