340B Program Improvement And Integrity Act

Floor Speech

340B PROGRAM IMPROVEMENT AND INTEGRITY ACT -- (Senate - May 17, 2007)

Mr. THUNE. Mr. President, this Chamber has spent a good deal of time
recently discussing an important topic that affects all consumers in this country--the high cost of prescription drugs. Not only do rising prescription drug costs contribute to all individuals' health insurance costs--but our health care providers feel the burden of these rising costs as well.

In my home State of South Dakota, rural hospitals serve as a lifeline to thousands of constituents living in medically underserved areas--and the rising cost of drugs continues to squeeze their budgets. As we continue to see in all regions of the country, cost directly impacts access.

In 1992, Congress created the 340B program under Medicaid to lower the cost of drugs purchased by a limited number of entities serving a high number of low-income and uninsured individuals--such as Federally Qualified Health Care Centers and nonprofit hospitals providing care to a disproportionate share of Medicaid patients. Under the 340B program, pharmaceutical manufacturers are required to provide these entities discounts on outpatient drugs as part of each manufacturer's Medicaid participation agreement.

This week, I was pleased to reintroduce legislation with my colleague from New Mexico, Senator Bingaman, to improve the 340B program and extend these discounts so that they not only apply to outpatient drug purchases, but also inpatient prescription drug purchases for qualifying hospitals.

Additionally, this bill would expand eligibility in the program to all critical access hospitals, as well as sole community hospitals and rural referral centers that serve a high percentage of low-income and indigent patients.

This legislation includes important provisions to improve the integrity of the program and generate savings to Medicaid. Specifically, the bill would generate savings for the Medicaid program by requiring participating hospitals to credit Medicaid with a percentage of their savings on inpatient drugs. Additionally, the bill seeks to enhance the overall efficiency of the 340B program through improved enforcement and compliance measures with respect to manufacturers and covered entities.

Hospitals serving predominately rural areas, such as the 38 critical access hospitals in South Dakota, play a crucial role in my State in providing care to patients in underserved communities. Extending the 340B drug discount program to these hospitals will help them to afford their prescription drugs--and at the same time lower the overall cost of care at these hospitals and to the Federal Government.

The 340B Program Improvement and Integrity Act of 2007 is commonsense legislation that reduces the cost of drugs for health care providers serving society's most vulnerable citizens. I look forward to working with my colleagues on both sides of the aisle to get this bipartisan legislation passed and signed into law.

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