UPMC Cole and Penn Highlands Elk are both part of a federal prescription drug price reduction program, but a national study released earlier this week indicated the program may not be working as intended.
The federal 340B drug pricing program, created in 1992, requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. The hospitals could charge patients and insurers the full price of the medication, seeing a profit through the program.
Covered hospitals may dispense drugs through in-house pharmacies or contract with outside retail pharmacies to dispense the drugs. In this region, Cole and Elk are the only members, along with 64 other hospitals around the state.
A report from the Alliance for Integrity and Reform of 340B released earlier this week, called DSH Hospitals’ 340B Profit Often Exceeds Charity Care Spending, showed that 85% of disproportionate share hospitals (DSH) earn more in 340B profit than they spend on charity care.
While the report calls into question whether hospitals are using their 340B profits to fulfill the original goal of the program — serving patients in need, the Hospital and Healthsystem of Pennsylvania said that 30% of these hospitals operate with a negative margin.
The so-called profits are used to invest in programs to enhance patient services and access to care, along with providing reduced price prescriptions, HAP indicated.
Corinne Laboon, spokesperson for Penn Highlands Healthcare, explained how the program works at Penn Highlands facilities.
“With regard to the recent Alliance for Integrity & Reform 340B Report, data alone does not always represent the entire situation,” she began.
“The 340B Drug Pricing Program was established to raise the quality of healthcare for people in rural communities who unfortunately may not have access to advanced medical care. The program also offers better margins for hospitals who serve rural communities so that they can keep care in their communities,” she explained.
“The funds generated from the 340B Program are not restricted exclusively for charity care,” Laboon said. “Penn Highlands Healthcare uses a portion of the funds derived from the 340B Program for charity care that provides uncompensated care as well as a free clinic and medication assistance for oncology, diabetic, low-income and underserved patients.
“In addition, a large portion of the funds is invested back into our hospitals, to recruit new physicians, expand services and introduce new technology and equipment that benefits everyone in the community — not just those receiving charity care,” she continued. “Penn Highlands Healthcare is able to offer services that many other rural hospitals do not provide such as advanced oncology therapies, cardiac and pulmonology care, a Level II Trauma Center, a Maternal and Child Center with a Level III NICU and more, which ultimately allows the people in the rural communities we serve to receive high-quality care close to home.”
UPMC Cole did not return requests for comment.
