AHA pushes new effort to defend 340B drug discounts in court of public opinion

Drug prices
The AHA has unveiled a set of principles aimed at boosting transparency in the 340B program. (Getty/Charles Wollertz)

With 340B taking a beating in the public eye in recent months, the American Hospital Association is launching a marketing offensive to improve the program's image.

The drug discount program has been a lightning rod in the back and forth on rising drug prices, and pharmaceutical companies have argued that hospitals take advantage of 340B’s discounts to line their own wallets. The group aims to showcase 340B's benefits and improve transparency, which is one of the issues that's been singled out as a key problem with 340B.

Specifically, the AHA unveiled a set of “stewardship principles” on Tuesday, encouraging hospitals to use them to better spotlight the value of the program to vulnerable communities and ensure a more standardized approach to compliance, said Rick Pollack, president of AHA, at a press event on Tuesday. 

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RELATED: Hospital groups sue HHS over long-delayed 340B final rule 

The principles developed by the AHA’s 340B task force include:

  1. Showcase 340B’s value: Hospitals that sign on to the stewardship program will be required to publish an annual narrative that highlights how they use the 340B savings.
  2. Annually disclose savings from the program: each year, participating hospitals will release the amount of money they saved thanks to the discounts, using a standardized method for calculation. 
  3. Ensure internal oversight protocols are “rigorous”: Hospitals are already required to closely review their compliance to meet Health Resources and Services Administration standards. As part of those protocols, hospitals that sign on to the principles must agree to provide regular training for 340B teams. 

This effort is the group’s latest step in its defense of the program.

The American Hospital Association is one of the lead plaintiffs in two lawsuits against the Department of Health and Human Services over the program; America’s Essential Hospitals and AAMC are also parties in the suits. 

The first calls for HHS to overturn significant cuts it made to the 340B payment rate, which took effect in January. The Centers for Medicare & Medicaid Services changed the rate from up to 6% more than the list price of a drug to 22.5% less than the list price, resulting in $1.6 billion in payment cuts. 

The three groups also sued HHS last week over the delayed final rule that would institute price ceilings and penalties for drug companies that knowingly charge over those ceilings. That rule has been delayed five times by the Trump administration. 

“It’s not an accident that these principles and that lawsuit came out around the same time,” Mindy Hatton, AHA’s general counsel, said at the press briefing.

RELATED: 340B hospitals, outside pharmacies need more oversight, GAO says

The principles are backed by the Association of American Medical Colleges, America’s Essential Hospitals, the Children’s Hospital Association, the Catholic Health Association of the United States and 340B Health. 

Pollack said the AHA has already presented the principles to its membership and is expecting a significant number of hospitals to sign on to the initiative by the beginning of next year.