THE BLOG
11/21/2014 05:34 pm ET Updated Jan 21, 2015

We Must Protect Vital '340B' Drug Discounts for Safety Net Hospitals

Millions of Americans receive help every year from a federal program they have never heard of: the 340B drug discount program, which allows public and nonprofit safety-net hospitals to better provide both affordable medications and vital services to the underserved.

I helped write the legislation that created this program and worked to expand it in the 2010 Affordable Care Act. The program has been extremely successful in reducing drug costs and helping support the hospitals and clinics that provide care to the uninsured. But now pharmaceutical industry opponents of the law are trying rewrite history and limit 340B program eligibility for hospitals and patients -- even as they charge as much as $1,000 for a single pill for some drugs.

The 340B law passed a bipartisan Congress and was signed into law by President George H.W. Bush in 1992. Then as now, safety-net hospitals faced steep increases in drug costs. The program was enacted to help them stretch their resources and serve the uninsured and other needy patients. It was designed to help cut costs for patients and the hospitals that serve them.

Here is how it works: The law requires drug companies to sell discounted medications to healthcare providers that serve high numbers of Medicare and Medicaid patients or are located in rural areas. These safety-net hospitals can use their savings on prescription drugs to cut costs for patients or to provide vital clinical and specialized services for people who cannot afford to pay for care.

We purposefully created the program this way to give safety-net providers an additional tool to enhance their ability to serve poor patients who would otherwise fall through the cracks.

The best part? The 340B program is working as Congress intended to help health care providers improve the lives of indigent patients every day.

At the San Mateo Medical Center in California, for example, 340B savings help fund 12 primary and specialty care clinics that serve the needy. And the savings help offset the cost of providing free medical care for 20,000 patients in the hospital's indigent program.

It's important to understand the heavy financial burden these providers shoulder to treat every patient who walks in the door at any time of the day or night.

The need for the 340B program is not going away. The refusal of many governors to take advantage of the Affordable Care Act's Medicaid expansion has left millions of Americans uninsured. According to the American Hospital Association, 340B hospitals provided over $28 billion worth of uncompensated care in 2012. And drug costs continue to grow -- with safety net hospitals forced to pay tens of thousands of dollars for new specialty drugs like Sovaldi, the new Hepatitis C treatment.

But even as drug company profits are soaring, some in the pharmaceutical industry are trying to derail the 340B program so they can charge higher prices for hospitals and clinics. They want to restrict the drugs eligible for discounts, or reduce the number of patients that qualify for the discounted drugs. If the drug industry prevails, underserved patients across the United States will be the losers as safety-net hospitals and other providers are forced to curtail care.

During my time in Congress I have championed numerous health care programs that benefit all Americans, including the less fortunate -- and the 340B program is one of the best. Congress should continue to protect this vital drug discount program for years to come.