Critical Access Hospitals Could Benefit from Drug Discounts

Cheryl Clark, for HealthLeaders Media , January 27, 2010

A representative for the Pharmaceutical Manufacturers Association declined to comment about the impact on drug companies if 340B were expanded, saying that the health reform proposals are still under discussion.

Williams, whose hospital sits in the middle of the Christmas tree capital of the U.S., a hilly region of about 26,000 people near the Appalachian Trail, and an area that ships two million evergreen trees a year, says there's another benefit from 340B program.

Some hospitals, as part of a benefit plan, allow their own employees to fill their prescriptions at the hospital pharmacy. If 340B discounts were put into place, the employees would also benefit with lower co-pays.

Michael Bonck is pharmacy manager for Franciscan Health System, Tacoma, WA, which includes Enumclaw Regional Hospital, a 25-bed critical access facility at the base of the Cascades in Washington, estimates that if 340B applies to his facility, it could save as much as $50,000 to $60,000 a year, based upon a 20-25% reduction in outpatient infusion medications such as Remicade. Further cost reductions will be attained if Congress extends 340B savings to inpatient medications.

The American Hospital Association and the Rural Health Association are continuing the fight to keep 340B expansions in the final heath reform bill.

"With the high annual cost growth in pharmaceutical prices and the critical role of pharmaceuticals in inpatient care, expanding 340B to cover inpatient drugs will help hospitals manage costs for their patients," says Matt Fenwick, spokesman for the American Hospital Association.

"In addition, while the AHA supports the Senate provisions expanding eligibility to include inpatient drugs, we prefer the hospital expansion provisions in the House bill that cover more rural hospitals, including Medicare dependent hospitals (MDHs). The 340B program was designed to help support safety-net hospitals; rural referral centers, sole community hospitals, MDHs and critical access hospitals all play critical roles in maintaining access to hospital care in rural areas.

"The 340B program should be expanded to protect and strengthen the safety net in rural areas," Fenwick says.

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Cheryl Clark is senior quality editor and California correspondent for HealthLeaders Media. She is a member of the Association of Health Care Journalists.

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