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340B Congressional Hearings and Underdog the Cartoon


As always, first a tribute to those curmudgeons out there, and they not only know who they are, but are now joining the formal Curmudgeon Coalition (comment below this post to get more info on how to join). 

They are already challenging my link of 340B to Underdog, and while it may seem a stretch to link 340B to the Underdog Cartoon from 1964-1973, I’ll tie them together after we finish serious business.  I only ask you start thinking of what public figure or group matches the Simon Bar Sinister, or Riff Raff Character.  And if you are too young to know about Underdog, try this link.



On Wednesday October 11, 2017 the House Energy and Commerce oversight subcommittee held its second hearing on 340B.  This meeting focused on how covered entities (CE’s) track and use the savings to improve patient care. Although the general tone of the meeting was favorable to 340B, the group known as AIR 340B began a series of ad campaigns adverse to 340B on Politico, and published articles in Forbes, Health Affairs and Morning Consult this week.  All were aimed at discrediting facilities using 340B. Health System Executives pushed back with this article.  (click on the hyperlinks to see the articles).  These are certain to adversely away a few legislators.

While overall favorable, 340B supporters should not yet relax.  The politicians on the committee repeated several times that they were not there to, nor had any intention to, eliminate 340B.  At the same time, several of the politicians were clearly opposed to 340B as it exists.  Representative Greg Walden aggressively challenged the witnesses testimony after all reported that critical programs would need to be canceled if 340B was eliminated.  He focused on uncovering healthcare executive salaries, and noted he could not believe programs would be eliminated in place of reducing executive salaries or eliminating overhead, should 340B ‘go away’.

It’s this type of attitude about healthcare, and perhaps hospitals and hospital systems in particular, that show a profound failure to understand how 340B savings contributes to health programs.  At the same time, this is a perception held by a number of congressmen and senators, and as Politician Lee Atwater once said, Perception is Reality

As responsible healthcare professionals, we cannot ignore this continued onslaught against 340B.  We need to make some fundamental changes to how we manage our 340B programs.  In particular, we need to each have a strategic plan in place to define not only how we use 340B savings, but how we can counter 340B negative attacks by groups such as AIR 340B.

We need to join in with 340B Health and the American Hospital Association in their ongoing efforts to promote the Entities’ side of the 340B Program.  On October 5th of this year, AHA submitted a paper to this same committee promoting rationale use of 340B.  You can read it here.  Here’s a link to 340B Health.


Exactly What Needs to Happen?

It became obvious, at least to me, during the meeting, that a significant percentage of our legislators have a severely limited understanding of health care and hospitals.   After Chairman Walden challenged the witnesses as to their actions if 340B was eliminated, one of the witnesses pointed out that overhead in healthcare is under constant scrutiny.  The problem seems to be; how do we promote our own message about 340B?

First, each CE needs to add their public relations team to their 340B Oversight Committee.  Secondly, we all need to identify exactly how 340B savings are being used.  Based on my own discussions with a large number of CE’s, this is not as simple as it could be.   Most pharmacies have reports showing 340B savings, but factors such as reverse branded drugs price increases, new therapies, and changes in volume can complicate a quick review of the drug budget.  In addition, I am not aware of any Entity that directly credits pharmacy for 340B savings.  Instead, any realized savings are just gains for the general fund.

During the hearing, each witness was asked to explain how their 340B savings were used.  Most had quick responses, naming specific programs.   This needs to be the standard for each 340B Entity – know off hand how 340B savings are used, and what programs benefit.

It’s More than Just Drugs

A repeated question in the hearing was if the Entities provided drug discounts to low income or indigent patients.  Most had an immediate response, ranging from free drugs for indigent patients, to sliding scale fees for low income patients.  However, there are a lot of 340B entities that do not have retail dispensing programs or discount programs for the Contract Pharmacies.  Consider how you might address this question if it’s posed to your own organization. 

I can think of a number of answers, including giving away drugs to ED patients, free dispensing of therapies to low income/indigent patients at discharge.  But I think it’s more important to direct the question away from just drug savings to entire health initiatives.  Medication Therapy Management is often funded by 340B savings.  The net impact on total healthcare costs are far in excess of the drug costs for these programs.  Be able to tie your own programs to your savings.

At a minimum, have a readily retrievable list of your Entity’s charity care programs, and do your best to link savings to the support for these programs.

What’s at Risk?

Accountability and transparency became major issues during the hearing. Although a few politicians pointed out that PhRMA is one of the least transparent industries in the world, there remains a concern that Covered Entities do not always show transparency in the use of 340B savings.  Add the nedgative campaigns about 340B Entities, and while we are not likely so see 340B ‘go away’, we may see new rules that limit the use of savings gained from the program.  These could be severe enough to damage the utility of 340B, resulting in some CE’s opting out.  Net effect: Winner – PhRMA.

So Step Me Through This

Do this as soon as your schedule allows:

1. Bring this topic to your next 340B Oversight Committee meeting

2. Develop a strategic plan that:

a. Defines the use of 340B savings

b.Plans for ongoing publicity about the benefits of 340B savings, and how it helps your patients and how it improves healthcare, in general, at your facility.

c. Involves lobbying with your local Senators and Congressmen.

3. Be extremely sure your internal audits are comprehensive and cover all of your 340B areas. Right now adversaries are eager to jump on any violation of a 340B rule.  Just the term ‘Diversion’ is enough to evoke a negative response.

4.Send in some of your success stories for 340B savings. We’ll help get the message out.

5. As a last resort: consider what your facility would do if in fact 340B savings ‘went away’ or were severely curtailed.

Tying this to Underdog

I promised to circle back to how 340B relates to Underdog, the Cartoon character that ran from 1964-1973.  The main character was Shoeshine Boy, Underdog’s civilian alter ego.  Whenever Sweet Polly Purebred (Shoeshine Boy’s Love Interest) was under attack by rascals such as Riff Raff or Simon Bar Sinister, Shoeshine Boy would transform into Underdog and fly to the rescue, speaking in couplets such as ‘There’s no Need to Fear, Underdog is Here’

As a trivia point:  Wally Cox provided Underdog’s voice, although his all-time best role was as the sonar man in The Bedford Incident in 1964.  Wally died of a coronary occlusion in 1973 at the age of 48.  Which might be why the Underdog series ended then.

Here’s the tie-back:  The entire PhRMA/340B fight is a perfect illustration of a ‘David versus Goliath’ type of conflict.  PhRMA, and its allies have resources far in excess of anything our 340B entities can come up with.  Perhaps their greatest strength is that they do have a strategy.  It’s obvious from the highly coordinated attacks against 340B and 340B entities.  I’m putting 340B into the role of Underdog.  I’ll leave it up to our readers to decide what public group/figure best fits into Sweet Polly Purebred, Simon Bar Sinister, and Riff Raff’s characters.

Until next time: Audit, audit, and promote 340B savings use!

Posted: Tuesday, June 19, 2018

Tags: 340B, CPS Blog Posts, 340B Congressional Hearing