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Federal Program Helps More Hospitals Provide Drugs to Needy Patients

Cheryl A. Thompson

In the past year, 40 more safety-net hospitals have joined the federal program that allows them to buy medications for indigent patients at greatly discounted prices, a government official recently said, bringing the total number of hospitals in the program to 403.

The program, known as "340B" and named for the section of the Public Health Services Act authorizing the discounts, is open to hospitals that receive a "disproportionate-share adjustment percentage" from Medicare of at least 11.75%, serve as the provider of a state or local government’s health care programs, and do not use a group purchasing organization to buy drugs for outpatient use. Certain other health care organizations, such as community health centers, can participate, too.

Discounts given through the 340B program can be substantial. Ted Slafsky of the Public Hospital Pharmacy Coalition said 340B-participating hospitals pay as much as 25% more on their drugs for inpatients than on medications obtained through the 340B program for outpatient settings.

The Public Hospital Pharmacy Coalition is a member of the 340B Coalition, which annually sponsors a conference in Washington, D.C., for safety-net health care providers, pharmaceutical manufacturers, and government officials.

Office of Pharmacy Affairs (OPA) Director Jimmy R. Mitchell, who spoke at the coalition’s conference in mid-July, said that nearly 9200 safety-net health care organizations participate in the 340B program, about 7% more than a year ago. Most of these organizations receive federal grants to provide health care services, he said.

Organizations eligible for the 340B program but without an inhouse pharmacy can contract with a community or ambulatory care pharmacy to access drugs at the discounted prices, and a substantially larger number of pharmacies are providing this service each year, Mitchell said. Since 1999, when the 340B program recognized 70 contracted pharmacies, that number has steadily grown by at least 45% a year, totaling 225 in 2002.

OPA, part of the Health Resources and Services Administration in the Department of Health and Human Services, manages the 340B program. Mitchell said OPA "offers a limited amount of technical assistance" to health care organizations eligible for and interested in joining the program. There are plans, he said, to fund a pharmacy services support center to help OPA and 340B-covered health care organizations.

OPA can be reached by telephone at 800-628-6297.