House Subcommittee Hearing Focuses on HRSA’s Oversight of 340B

by Blair Burnett, Policy Analyst, ACCC

U.S. CapitolThis week, the U.S. House of Representatives Subcommittee on Oversight and Investigations, of the Energy and Commerce Committee, chaired by Rep. Tim Murphy (R-PA), held a hearing titled, “Examining HRSA’s Oversight of the 340B Drug Pricing Program.” Health Resources and Services Administration (HRSA) is the agency within the U.S. Department of Health and Human Services that currently oversees the 340B Drug Pricing Program. The program’s inception in 1992 sought to provide discounted outpatient drugs to “covered entities” (DSH facilities, rural referral centers, freestanding cancer centers, non-profit hospitals, etc.) who provide a certain level of care to Medicaid and low-income Medicare patients, allowing covered entities to stretch scarce federal resources to provide affordable prescription drug coverage to all patients.

The hearing, convened on Tuesday, July 18, addressed how HRSA’s oversight can improve review of eligible healthcare facilities utilizing the program in the face of continued expansion of facilities that qualify. As of October 2016, there are 12,168 covered entities utilizing the 340B Drug Pricing Program, and this number has quadrupled since 2011. The hearing also sought to explore how HRSA can be more transparent with 340B Drug Pricing Program reporting, calling attention to gaps in current data collection efforts.

Witnesses who testified at the hearing included:

  • Krista M. Pedley, PharmD, MS, CDR, USPHS, Director, Office of Pharmacy Affairs, Health Resources and Services Administration, U.S. Department of Health and Human Services;
  • Debbie Draper, Director, Health Care, Government Accountability Office (GAO); and,
  • Erin Bliss, Assistant Inspector General, Office of Evaluation and Inspections, Office of Inspector General (OIG), U.S. Department of Health and Human Services.

Both the office of the GAO and HHS OIG have done significant work with the 340B Drug Pricing Program, and the witness testimony spoke to the recommendations both have made to HRSA. Both offices have also repeatedly reviewed HRSA’s regulatory capabilities with the 340B Drug Pricing Program and stated the need for more robust oversight. Based upon witness testimony and member questioning, key takeaways include:

  • Possible bipartisan legislation efforts that seek to grant HRSA more oversight of the 340B Drug Pricing Program.
  • Increased transparency from HRSA on 340B Drug Pricing Program costs and rules.
    Multiple members called for insight into how covered entities are utilizing any savings accrued from the 340B Drug Pricing Program. Within the current oversight from HRSA, there are no guidelines on how covered entities utilize or report 340B Drug Pricing Program savings.
  • Additional hearings to examine the 340B Drug Pricing Program within the subcommittee bringing in physicians and hospital executives to ask healthcare facilities how they are utilizing savings acquired from the 340B Drug Pricing Program.

Notably, this hearing convened shortly after the July 13 release of the Centers for Medicare & Medicaid Services (CMS) proposed 2018 Outpatient Prospective Payment System (OPPS) rule, which calls for a drastic reduction in Medicare Part B payments for outpatient drugs to all covered entities utilizing the 340B Drug Pricing Program from average sale price (ASP) plus 6 percent to ASP minus 22.5 percent in an effort to reign in the program. Rep. DeGette (D-CO), Rep. Schakowsky (D-IL), and Rep. Pallone (D-NJ) voiced concern over this proposal and called for bipartisan support to make meaningful reforms to the 340B Drug Pricing Program to ensure HRSA oversight is effective in aligning transparency as well as improved facility and overall data audits.

As policymakers continue to shine the light on the 340B program, over the next several weeks ACCC will continue to monitor efforts to reform the program and evaluate the impact the OPPS proposal will have on ACCC membership. Along with other stakeholders and coalition partners, we will be forcefully advocating for policies that are in the best interest of all community-based providers and their patients.


ACCC members can gain an in-depth understanding of how CMS’ proposed CY 2018 Medicare rules will impact oncology by participating in ACCC’s August 9 webinar, “CMS Proposed 2018 OPPS & PFS Rules: What You Need to Know.” Learn more [member log-in required].

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