The administration’s rebate pilot is a positive first step toward addressing hospital abuse of the 340B program. The rebate model is a commonsense tool and should be expanded to cover all medicines and address broader program integrity concerns.
It’s about accountability and transparency.
- Because of the program’s lack of transparency and oversight, it’s easy for large hospitals to abuse the program. And the more these hospitals exploit the program, the more employers, taxpayers and patients foot the bill.
- The use of the rebate model simply requires hospitals and clinics provide basic data to ensure legal compliance before getting the 340B price implemented through a rebate. This would help crack down on program abuse and illegal duplicate discounts and therefore help address some of the ways 340B drives up costs for taxpayers and employers.
It’s common sense.
- Rebates are standard practice for getting manufacturer price concessions on medicines to federal drug programs. It’s already used in Medicare, Medicaid, TRICARE and beyond.
- A rebate model will also help to spur a larger private sector role in addressing operational challenges created by the Inflation Reduction Act, lessening federal involvement and saving taxpayers money.
It’s non-disruptive.
- Any notion that the rebate model is a burden to hospitals and clinics doesn't match how these entities already operate. Most already use a “replenishment model,” meaning they initially purchase medicines at the list price and receive a discount post-dispensing, and only after there are sufficient purchases to “replenish” at the 340B price.
Fully implementing the rebate model would be a straightforward and efficient solution to get the program back on track. The notice released by HHS is a positive first step towards leveraging this solution to improve 340B program integrity, reducing costs and ultimately benefiting patients, taxpayers and employers.
Learn more at PhRMA.org/340B.
Molly Jenkins
Molly Jenkins is a senior director of Public Affairs at PhRMA, where she leads communications on the 340B hospital markup program. Before joining PhRMA, she led issue advocacy and reputation campaigns at Purple Strategies. She also worked on Capitol Hill in serval different capacities, including leading communications for Rep. Greg Walden and as press secretary for the Energy and Commerce Committee. Molly has an M.A. in Health Communication and Media Relations from Johns Hopkins University and a B.A. in journalism from Texas Christian University.
Molly Jenkins