Seven hospital associations representing more than 2,000 hospitals have sent a letter to the Health Resources and Services Administration, asking the Trump administration for an extended timeline for stakeholder comments before the feds open its 340B rebate pilot program to applicants.
In July, the HRSA, the agency responsible for overseeing and administering the program, announced the 340B pilot program would replace the upfront provider discounts with an equivalent post-purchase payment coordinated by the drug manufacturer. It changes upfront payments to hospitals in the 340B drug program to rebates paid after the fact.
"Covered entities" – providers eligible for the discount – would be required to submit a report to a drugmaker within 45 days of the drug being dispensed, and then receive the rebate within 10 days of submitting the report.
Currently, comments of the program have to be submitted by Sept. 8, and drugmakers have to submit their applications and rebate plans by Sept. 15, with approvals made by Oct. 15.
The hospital groups – including the American Hospital Association, America's Essential Hospitals, Children's Hospital Association and the Association of American Medical Colleges – are requesting that the comment period be extended to Sept. 15, with an Oct. 20 manufacturer application deadline and an approval date of Nov. 3.
"A change of this magnitude requires careful consideration by all stakeholders," the groups wrote in the letter.
WHAT'S THE IMPACT
The groups wrote that the current timeline only gives the HRSA one week to consider stakeholder feedback, make necessary changes to the program, and communicate those changes to all 340B stakeholders, including drug company applicants.
"With the fundamental changes a rebate model will impose on all 340B stakeholders, it is impossible for the agency to meaningfully consider, in just seven days, all the feedback it will surely receive," the letter read. "Moreover, drug companies have spent years developing and preparing for a rebate model, but the agency's current timeline would give 340B hospitals far less time to prepare."
The timeline proposed by the hospital groups, they said, would better allow stakeholders to provide HRSA with meaningful feedback, and would allow the agency more time to consider any comments and make changes to the pilot.
"We sincerely appreciate the agency's consideration of our request and look forward to working with all stakeholders on protecting the 340B program and the millions of patients who benefit from it," the groups wrote.
340B Health, the American Society of Health-Systems, and the Catholic Health Association of the United States also co-signed the letter.
THE LARGER TREND
Just last week the Association of American Medical Colleges lent its support to new legislation that would tweak the 340B statute so that covered entities can use contract pharmacies to dispense outpatient drugs.
According to the AAMC, since 2020, an increasing number of manufacturers have opted to restrict access to 340B discounts for eligible drugs dispensed at contract pharmacy locations, prompting enforcement action by the HRSA.
In response to these actions, several manufacturers sued the federal government, contending that the 340B statute is silent with respect to covered entities' ability to use contract pharmacy arrangements. Litigation related to this matter is ongoing, with the U.S. Court of Appeals for the District of Columbia Circuit issuing a 2024 opinion in favor of the manufacturers.
On July 31, the AAMC sent a letter to Sen. Peter Welch and Rep. Doris Matsui in support of the 340B Patients Act, saying the 340B program plays "a critical role" in supporting the nation's healthcare safety net, enabling providers to care for patients and communities that are historically low income and underserved.
"The program allows safety-net hospitals, many of which are teaching hospitals, to purchase covered outpatient drugs at a discount from manufacturers, and thus, stretch scarce financial resources and maintain, improve, and expand access to care,” the AAMC wrote. “Simply stated, the 340B program helps hospitals care for low-income patients.”
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.