340B backers say program is sound

The 340B drug program has not gone off the rails and continues to provide crucial therapeutic and financial support for not-for-profit hospitals.

That was the assertion made by the chief executive officer of Safety Net Hospitals for Pharmaceutical Access (SNHPA) at the Healthcare Financial Management Association's (HFMA) annual conference in Las Vegas earlier this week.

"We live and breathe 340B--that's what we do," said Ted Slafsky, who heads SNHPA.

Slafsky disputed allegations that the 340B program has grown too fast, and that hospitals have been misappropriating the money that is freed up by the program, which provides drugs to hospitals at a steep discount.

The 340B program came under fire from Congress last year, when it was reported that several hospitals in North Carolina, including Duke University Hospital and Carolinas Medical Center, were reselling their discounted drugs to insured patients and pocketing tens of millions of dollars in profit as a result.

"Are they using it to build gold-plated washrooms or gyms for their c-suite, or are they using it to help patients?" Slafsky asked. The answer was obvious to Slafsky--whose organization sponsored a 2011 study underscoring how 340B helps out hospitals financially. However, he noted that hospitals participating in the program are not proactive enough in telling the public how the program works.

Larry Hudson, chief financial officer of the Charleston Area Medical Center in West Virginia, noted that his facility uses 340B money to support community outreach, including HealthRight, a clinic that provides free services to the working poor. "340B helps support the hospital's mission," he said.

Nevertheless, 340B remains under tight scrutiny by federal regulators and the drug industry. Maureen Testoni, SNHPA's general counsel, said that hospitals are at risk of being booted out of the program and could even be compelled to reimburse drug manufacturers if they are found not to be complying with program guidelines. She recommended that hospitals maintain auditable records connected to their 340B programs and ensure that their contract pharmacies are also compliant with 340B.