The case has been conceptualized under several ethical perceptive of drug pricing program under section 340B of Public Health Services Act. Initially, Section 602 of the Veterans Health Care Act (1992) focused on the purchasing price of the drug by the medical clinics and hospitals (“Veterans Health Care Act of 1992, Public Law 102-585 | Official web site of the U.S. Health Resources & Services Administration”, 2018). The Subpart 2 of Section 340B stated that the limitations of the Agreements of the drug price are limited and depends on the cover entities (“Veterans Health Care Act of 1992, Public Law 102-585 | Official web site of the U.S. Health Resources & Services Administration”, 2018). This implies that the agreement between the manufacturer and the secretary can be ethically considered by paying the required drug costs without surpassing average cost. The Article XIX of Section 340B has emphasized on the importance of the rebate percentage on the drug price. The cost of the drug must be rebated as per ethical standard of Public service Act (“Veterans Health Care Act of 1992, Public Law 102-585 | Official web site of the U.S. Health Resources & Services Administration”, 2018). Section 1927 has specified that the average total rebate percentage for the outpatients must sustain proper alignment with the ethical considerations mentioned in Section 1927 (“Veterans Health Care Act of 1992 (1992 – H.R. 5193)”, 2018).
It is seen that the Medicaid drugs under Section 340B are being sold to the outpatients with rebate. This results in the disproportionate distribution of the drugs to the inpatients from Medicare, pediatric hospitals and community health centers (“Veterans Health Care Act of 1992 (1992 – H.R. 5193)”, 2018). The hospitals for HIV care, hemophilia care, black lung care, tuberculosis care and family clinics are also involved in this unethical practice. The hospitals and healthcare organizations are needed to be non-profitable and must be involved in contractual terms with government organizations (“Veterans Health Care Act of 1992 (1992 – H.R. 5193)”, 2018). In this contract, the share percentage for the government should be more than 11.75% in terms of purchasing agreement. The ultimate concern of Section 340B is to provide drugs to most of the inpatients and must not be resold.
a) True intent and legislative intent of 340B Drug Program
Ans: The 340B drug discount program is dominated by the Health Resources and Service Administration (HRSA). Thus, the intent of the program is to audit the ethical compliance of the drug discount program (“Health Resources and Services Administration | Official web site of the U.S. Health Resources & Services Administration”, 2018). Moreover, Section 340B also locates the program integrity to measure the entities and diversions of drugs. This section also takes an account of the authentication of the discounts and manufacturers pricing (Guadamuz & Qato, 2018). Hence, the ultimate aim of the Section 340B is to permit all the detail of the discount program by stretching to the federal resources. This is an ethically integrated outlook to reach a maximum number of inpatients with quality and effective drug services.
The legislative intent of the 340B program is to establish the ethical intent of delivering the drugs to the inpatient in formative discount. It was noticed that most of the drugs were unethically resold to the outpatients by the clinical organizations and hospitals (Guadamuz & Qato, 2018). Hence, the inpatients and the needy patients used to get disproportionate part of the drugs. Thus, the legislative intent of Section 340B is to extend the level of Medicaid drug discounts to vulnerable patients in healthcare organizations (Traynor, 2014).
b) Conclusions from Senator Grassley?
Ans: Senator Grassley critically analyzed the concept of non-profitable hospitals and healthcare mentioned under Section 340B. Grassley asked the hospitals to show the savings and debts of the resources to find out the ethical authentication of the drug audits by HRSA (“Health Resources and Services Administration | Official web site of the U.S. Health Resources & Services Administration”, 2018). The data provided by Grassley was intended to find out the financial participation of the hospitals in the 340B program. Moreover, it was also intended to focus on the amount of Medicare, Medicaid care, self-pay and commercial care of the hospitals. The basic intention of Grassley’s data is to locate the ethical integrity of the hospitals UNC, Carolinas Medical Center and Duke in terms of maintaining a proper ratio of the purchase amount and program cost under the Section 340B (Traynor, 2014). The Grassley’s data has also clarified the profitability of the hospitals after attaining the 340B program.
c) Covered entities provide to HRSA on a routine basis?
Ans: An ethically audited data would be liked to make the cover entities provide to HRSA on a routine basis. The unaudited HRSA is not sufficient enough to provide guidelines for covered entities and drug manufacturers (Traynor, 2014). The data must be audited by PPACA to develop a dispute revolutionary process formally to maintain a sustainable integrity of the prices mentioned in 340B (“Health Resources and Services Administration | Official web site of the U.S. Health Resources & Services Administration”, 2018).
d) Discuss the merits of using the “subregulatory” process versus the normal rule-making procedures.
Ans: The merits of the subregulatory process versus the normal rulemaking procedures are creating maximum opportunities for drug diversion under the Section 340B, ensuring the scope for the drug benefits. As per the Affordable Care Act (ACA), it initiates a well-developed rulemaking process and allowing the agencies to avoid the long administrative procedure (“Get 2019 health coverage. Health Insurance Marketplace”, 2018).
e) Impact of ACA on 340B program
Implementation of the ACA should have a significant amount of impact on the pharmaceutical and the biotechnological firms.
Access to the uninsured population- The act should help the pharmaceuticals and biotechnological firms to get access to the uninsured population as it is now mandatory to have a health insurance under the340 B program after the ACA implementation (“Get 2019 health coverage(Health Insurance Marketplace”, 2018).
Qualifying therapeutic discovery project- A tax credit should be provided to the pharmaceutical and the biotechnological firm if therapies are provided by the firms that detect and prevent chronic diseases (“Get 2019 health coverage. Health Insurance Marketplace”, 2018).
The medicate coverage gap should be closed- The closing Medicare coverage gap signifies that the pharmaceutical and the biotechnological firms should receive additional benefits for performing their business in an effective manner. Under the ACA the firms have to give 50 % discount on the prescribed drugs (“Get 2019 health coverage. Health Insurance Marketplace”, 2018).
The requirement of compliance under the 340B drug pricing program- Prior to the ACA Resell off, the drug was done to the patient party. According to the ACA, the resell of the drugs is prohibited from creating a new market for the firms (“Get 2019 health coverage. Health Insurance Marketplace”, 2018).
f) Merits of disproportionate share and the average manufacturer’s selling price to calculate discount with recommendation?
The disproportionate share is the main difference in the funding between the government and the private medical institutions. According to the 340B programs, the disproportionate share may have some merits if the funding remains more in the hand of the government hospitals (Nelb, Teisl, Dobson, DaVanzo & Koenig, 2016). The vulnerable and poor population should receive a quality care in the government medical hospitals.
The average manufacturer selling price is the average price that is sold to the customers across the channel. The 340B program describes the average manufacturers selling price to be the parameter for measuring the price. Section 1927(C) describes the discount equals the strength involved in the drug divided by the average manufacturer selling price (“Health Resources and Services Administration | Official web site of the U.S. Health Resources & Services Administration”, 2018).
The disproportionate share should be maintained in a proper way so that the government institutions may have their required funds to serve the vulnerable patients according to the 340B program (“Health Resources and Services Administration | Official web site of the U.S. Health Resources & Services Administration”, 2018).
If the disproportionate share is increased it may help in providing an effective discount on medication to the inpatients.
g) Merits of Senator Grassley’s investigative methods
Senator Grassley performed the investigative methods regarding the health policy in an effective manner. The investigation method included tracking of the top drug expenses that are related to the possible change in the process of admission (Chen, 2013). It helps in determining a clear picture of the impact of 340 B programs on the hospitals. The actual purpose of this investigation is to maximize the saving opportunity of the outpatient under the 340 B program. Senator Grassley investigated the documentation of the hospitals that included admission status and discounts on drug provided by the hospitals under the 340 B program (Zhang, Marchand, Sullivan, Klass & Wagner, 2018). Moreover, another merit of investigation method is that it helped in comprehending weather the HRSA has ever audited the documents of the Hospital in an effective and efficient manner. Besides that, the investigation included the checking of documents that comprised of the breakup of 340B payer mix. It forms a clear picture of whether it is used in the treatment of the most vulnerable patients according to the 340 B program (Adler & Sosa, 2016).
h) Policy shifts to support the contraction or expansion of the 340B program?
Ans: The events or the policies that would support the expansion of 340B program are- The maximum enactment of the healthcare coverage under The Public Health Service Act, mandatory selling of the useful drugs to the inpatients and the income of the 340B program could be used effectively by the covered entities (Feigl & Ding, 2013).
Reference list
Adler, G., & Sosa, S. (2016). External Factors in Debt Sustainability Analysis: An Application to Latin America?. Journal Of Banking And Financial Economics, 2016(1), 81-120. doi: 10.7172/2353-6845.jbfe.2016.1.4
Chen, J. (2013). Prescription drug expenditures of immigrants in the USA. Journal Of Pharmaceutical Health Services Research, 4(4), 217-225. doi: 10.1111/jphs.12034
Feigl, A., & Ding, E. (2013). Evidenced Formal Coverage Index and universal healthcare enactment: A prospective longitudinal study of economic, social, and political predictors of 194 countries. Health Policy, 113(1-2), 50-60. doi: 10.1016/j.healthpol.2013.06.009
Get 2019 health coverage. Health Insurance Marketplace. (2018). Retrieved from https://www.healthcare.gov/
Guadamuz, J., & Qato, D. (2018). Availability of Pharmacies Participating in the 340B Drug Pricing Program, 2016. Value In Health, 21, S97. doi: 10.1016/j.jval.2018.04.655
Health Resources and Services Administration | Official web site of the U.S. Health Resources & Services Administration. (2018). Retrieved from https://www.hrsa.gov/about/organization/org-chart.html
Nelb, R., Teisl, J., Dobson, A., DaVanzo, J., & Koenig, L. (2016). For Disproportionate-Share Hospitals, Taxes And Fees Curtail Medicaid Payments. Health Affairs, 35(12), 2277-2281. doi: 10.1377/hlthaff.2016.0602
Traynor, K. (2014). Contract pharmacies come under 340B scrutiny. American Journal Of Health-System Pharmacy, 71(8), 608-611. doi: 10.2146/news140030
Veterans Health Care Act of 1992 (1992 – H.R. 5193). (2018). Retrieved from https://www.govtrack.us/congress/bills/102/hr5193
Veterans Health Care Act of 1992, Public Law 102-585 | Official web site of the U.S. Health Resources & Services Administration. (2018). Retrieved from https://www.hrsa.gov/opa/program-requirements/public-law-102-585.html
Washko, M., & Fennell, M. (2017). The Epicenter of Effectiveness and Efficiency in Health Care Delivery: The Evolving U.S. Health Workforce. Health Services Research, 52, 353-359. doi: 10.1111/1475-6773.12662
Zhang, X., Marchand, C., Sullivan, B., Klass, E., & Wagner, K. (2018). Naloxone access for Emergency Medical Technicians: An evaluation of a training program in rural communities. Addictive Behaviors, 86, 79-85. doi: 10.1016/j.addbeh.2018.03.004
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