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We can help rural seniors and veterans by keeping the 340B drug pricing program

We can help rural seniors and veterans by keeping the 340B drug pricing program
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Today there is much talk about the state of health care in America. Everything from repealing Obamacare to dealing with the opioid epidemic seems to be on everyone’s radars. But one thing that’s not being talked about is the proposed change to a vital drug pricing program that serves vulnerable populations. 

This July the Centers for Medicare and Medicaid (CMS) announced possible changes to the 340B Drug Pricing Program, specifically in the way that drug discounts are calculated. Such changes would jeopardize health care across the country, especially to the people who need it most.

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This proposal was shocking, considering that the program has worked wonders for the past twenty-five years. Established in 1992, the 340B Drug Pricing Program allows drug manufacturers to gain guaranteed access to the Medicaid market in return for providing outpatient drugs at a deep discount to eligible entities that treat disproportionate shares of low-income, under- or uninsured populations. At no cost to the taxpayer, the program allows hospitals to “stretch scarce Federal resources as far as possible.” The program is a success — over 12,000 entities and 700 manufacturers participate in the program today.

 

So why does the 340B program matter? Because eligible health care organizations have saved millions of dollars in drug discounts.These savings are then used for local priorities like providing low or no-cost medications, arranging transportation services in remote locations, or offering free clinics to help manage diabetes or obesity.

These savings are critical to helping people receive the care they need, but may not be able to afford. This was recently made clear at a hearing before the House Energy and Commerce Committee, Oversight and Investigations Subcommittee. The Mission Health system in North Carolina, which serves over one million patients in southern Appalachia, saved over $37 million in 2016 through the 340B program — those savings amounted to 70 percent of their operating margin and supported an urgent-care walk-in clinic, a health center for the homeless, a child advocacy center, and a family justice center among other programs.

The 340B program is especially important for rural, low-income areas. These areas — where about 60 million Americans live — are disadvantaged both in terms of finances and wellbeing. Not surprisingly, the median household income is far lower in rural areas than urban ones. And, according to the US Census Bureau, those living in rural areas are older than those living in non-rural areas — a median age of 51 compared to 45. This means rural hospitals serve older patients, a number of whom are military veterans. These populations require greater care, especially for age-related illnesses, like heart disease, diabetes, and cancer, and for service-related disabilities.

 The problem is that gaining access to medical care is more difficult in rural areas than in urban settings. People have to drive longer and farther to get treatment. This is a real issue, because more rural hospitals are closing their doors: 80 rural hospitals have shut their doors since 2010. Even more could be lost as over 40 percent of rural hospitals annually operate in the red.

We need to make the 340B program and its proposed changes part of our everyday conversations. The 340B program allows rural hospitals to keep their doors open and to get patients the medicines they need at a cost they can afford. Hospital savings on outpatient drugs are necessary for many Americans to lead better, fuller, and healthier lives. It’s a win-win situation.

We urge Members of Congress to keep the promises they've made to Americans, and specifically to seniors, that no changes to the health-care system will impede their access to care. While the fight to repeal Obamacare and implement an affordable patient-centered approach to care rages on, we must not forget that all health care policy actions taken in D.C. have very real life-or-death consequences for those living outside the capital. With that said, keep the 340B program as is.

Jim Martin is the founder and chairman of the 60 Plus Association. 60 Plus is the largest and oldest free-market seniors advocacy group in the nation.