Greensburg Daily News, Greensburg, IN


November 26, 2013

How a federal drug discount program really works

Merrill Matthews’ Nov. 14 opinion column on the 340B drug discount program, “Congress Tries to Lower Drug Costs and Raises Health Premiums Instead,” arrives at a myriad of wrong conclusions.

Mathews has a long history with the insurance industry that routinely raises health care costs and points the finger elsewhere. It would have been helpful if he had disclosed his industry affiliations and funding.

The spurious piece criticizes the 340B program created by Congress and President George H.W. Bush in 1992 to help hospitals and clinics that serve large numbers of poor and under-insured patients stretch their budgets to better treat this population.

Under the law, highly profitable drug manufacturers are required to provide these safety-net hospitals and clinics with discounted pricing on outpatient medications. In turn, the hospitals and clinics pass on a price break to low-income patients and other vulnerable populations.

Congress also intended for these healthcare providers to buy medicine at a discount, bill insurance companies for it at market rates, and then use the savings to improve and expand primary care and more complex and expensive treatment for cancer, AIDS, diabetes, and other diseases and conditions.

The 340B program is vitally important right in Greensburg. Recently, Decatur County Memorial Hospital laid off 10 percent of its workforce.

Administrators are now looking to 340B savings to help keep the doors open. Similar critical-care facilities across America are facing steep cutbacks under the Affordable Care Act, making the 340B program crucial to maintaining healthcare services in their communities.

340B hospitals are not gouging anyone. Federal health officials have specifically stated that Congress intended for private insurers to reimburse 340B hospitals at normal rates when patients have private insurance. Congress wants 340B savings to accrue to hospitals and clinics that serve needy patients, not the multi-billion dollar insurance and drug industries.

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