Lawmakers in Augusta today announced a forthcoming bill that, if passed, will close a loophole and protect discounts on prescription drugs for those in rural and underserved areas.
“We will not stand idly by as drug companies wreak havoc on this critical program at the expense of those who need it most,” said Rep. Jack Ducharme (R-Madison), one of the bill’s supporters.
Under a federal program designated 340B, pharmaceutical companies are required to sell drugs to health care providers who cater to such patients at a discount. The idea, advocates said, was to fill gaps in coverage from programs such as Medicaid and MaineCare.
In subsequent years, health care providers forged partnerships with local pharmacies to facilitate the program, according to Jeff Austin, vice president of government affairs and communications at the Maine Hospital Association.
That, Austin said, is the problem.
About five years ago, the pharmaceutical industry chose not to comply with the federal discount program, according to Austin. When regulators took the industry to court, the industry stated that the partnerships mostly didn’t exist in 1992. Therefore, the partnerships were not covered by the language of the 340B program.
Austin accused the industry of using the loophole to get out of providing the discounts, and there’s nothing the federal government can do about it.
However, states such as Alabama created laws that close the loophole, forcing the pharmaceutical industry to provide discounts again.
On Wednesday, lawmakers said they want the new bill to do what Alabama has done.
“I want to protect these partnerships between local pharmacies and hospitals and (federally qualified health centers) and ensure our most vulnerable Mainers have access to care and services,” said Sen. Donna Bailey (D-York), the bill’s sponsor.
Ducharme serves on the HealthReach Community Health Centers board of directors. The provider has 12 facilities in central Maine which qualify for discounts under 340B. He said similar centers statewide serve more than 200,000 Mainers.
Austin said patients of hospitals in his association have $150 million in bad medical debt, which speaks to the struggle some Mainers go through to afford health care.
“There’s need in this state beyond simple Medicaid or charity care,” he said.
In response to today's announcement, the Pharmaceutical Research and Manufacturers of America, a pharmaceutical industry trade association, hit back with a statement. In it, the association cited media reports from across the country accusing hospitals and health care providers in at least three different states of abusing the 340B program by buying drugs at discount prices then selling them at full price and pocketing the profits.
The statement also cited a report from a pharmaceutical market analysis company that alleged the 340B program leads to fewer taxes being collected in all 509 states, including more than an estimated $2 million every year in Maine.
“Wealthy hospitals work with (pharmacy benefit managers) and other middlemen to exploit the 340B program by buyingb medicines at steep discounts and charging massive markups, imposing higher costs on patients, employers and taxpayers," Stami Turk, the association's spokesperson, said in a statement. "And despite claims by the hospital industry, there is no transparency or accountability in the program to verify it’s benefiting the people it should. Investigations by the media and state lawmakers continue uncovering rampant abuse of the 340B program by large hospitals, yet the hospital industry wants to expand it. Maine lawmakers shouldn’t fall for it.”
The bill -- An Act to Protect Health Care for Rural and Underserved Communities – hasn’t been assigned a number yet. Advocates said the bill will eventually go to the Joint Standing Committee on Health Coverage, Insurance and Financial Services for hearings and other work over the next few weeks.