340B Pricing 

There are some components or portions of the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act, which offer pharmacists opportunities and may benefit the pharmacy profession.  Unfortunately, free-standing children’s’ hospitals are being excluded from a benefit afforded to other hospitals. 

Hospitals that serve low-income populations participate in a discount drug program known as 340B. Healthcare reform legislation expanded this discount program to free-standing cancer centers, critical care hospitals, and rural referral centers. However, the expansion of the program excluded orphan drugs from discounted pricing for entities that were newly made eligible in the healthcare reform law. In a seemingly well-intentioned mistake, free-standing children’s hospitals were included in the newly expanded list. But free-standing children’s hospitals began participating in the 340B program in September 2009, months before healthcare reform became law. Exclusion from 340B pricing for orphan drugs may cost the free standing children’s hospitals in excess of $109 million annually.

The orphan drugs make-up a majority of the savings (50-90%) with 340B pricing for the children’s hospitals and includes drugs such as Botox, Remicade, IVIG, Myozyme, and chemotherapy agents to name a few.  For many years the free standing children’s hospitals were barred from access to the 340B program because we were not included in the Public Health Service (PHS) Act.  After years of working through the legislative process, children’s hospitals were finally included as 340B covered entities under the PHS Act in September 2009. Several organizations such as the National Association of Children’s Hospitals and Related Institutions (NACHRI), Child Health Corporation of America (CHCA), and Safety Net Hospitals for Pharmaceutical Access (SNHPA) diligently worked to obtain access. The recent exclusion is a set-back for free-standing children’s’ hospitals. We are now working to reverse this unfavorable portion of health-care legislation.

On July 14, 2010, the House of Representatives passed H.R. 5712, known as the Veterans’, Seniors’, and Childrens’ Health Technical Corrections Act of 2010. On July 19, 2010, the bill was placed on the Senate Legislative Calendar under General Orders (Calendar No. 465), but does not yet have a number.

Currently, Senator Sherrod Brown (D-Ohio) is obtaining signatures in a letter urging Majority Leader Harry Reid (D-Nev) to correct this mistake “at the earliest opportunity” in the Senate. Twelve senators have signed Brown’s petition. Despite the challenging political environment, we must encourage others in the US Senate to support legislation, which will allow pediatric pharmacotherapists in children’s hospitals to provide basic care for children who cannot speak for themselves.  

The Pediatric Pharmacy Advocacy Group is encouraging all of its members to join in the effort to restore 340B pricing for children’s Hospitals. [Download a sample letter here].

We also encourage all pharmacy associations and related organizations, such as APhA, ASHP, and ACCP to join PPAG in this effort.  We respectfully request that these organizations and their members contact or write their Senator alerting them to the issue.  PPAG will keep you informed as the issue moves through the legislative process.

In addition, PPAG has sent a letter to HHS Secretary Kathleen Sebelius to delay HRSA implementation of any action or promulgation of rules surrounding the 340B changes until we correct this mistake in the legislation.

For more information regarding 340B pricing, please contact:

James E. Dice, PharmD, FPPAG
Director of Pharmacy
Children’s Hospital of The King’s Daughters
601 Children’s Lane
Norfolk, VA 23320
james.dice@chkd.org