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Nathan Howell is president and CEO of MaineGeneral Health and MaineGeneral Medical Center.
When Maine legislators acted overwhelmingly last year to protect access to discounted drugs for hospitals and community health centers throughout Maine, they did so with good reason: the federal 340B Drug Pricing Program is a critical lifeline for patients and communities struggling to access health care across the state. Under the 340B program, eligible hospitals are able to buy drugs at a discounted price in order to provide more services and reach more patients, particularly in underserved areas.
The importance of this program to the people of Maine can’t be overstated. Last year alone, Maine hospitals involved in the 340B program provided $200 million in uncompensated care, serving an overwhelming number of uninsured and Medicaid patients, and providing crucial services including comprehensive diabetes programs, cancer treatments, life-saving opioid intervention services and related services such as transportation to needed appointments and heating assistance.
In Maine’s rural and underserved communities, the 340B program makes it possible for patients to access the vital health services they rely on. That is why Maine’s hospitals are speaking out and suing the federal government to stop a new program that would completely change the 340B program in less than three weeks, taking resources away from Maine’s health care providers who would use it to help patients and instead giving them to global drug companies and other middlemen.
At issue is a controversial initiative abruptly announced by the U.S. Department of Health and Human Services at the end of July — a mere month after Maine lawmakers voted to strengthen the 340B program in the state. In a monumental shift that would impose hundreds of millions of dollars in costs and burdensome paperwork requirements with no benefit to patients, HHS is trying to force hospitals and clinics to pay drug companies the full market price for drugs upfront and then seek reimbursement only after the drugs are administered to patients.
HHS calls this a “pilot program,” but it is not. MaineGeneral Medical Center in Augusta — along with every other 340B hospital in the country — is being forced to participate or lose discounts we are owed under law.
For safety-net hospitals here in Maine, many of which are already operating at a loss or on razor thin margins, this change would be devastating. Every hospital in Maine would face costs estimated to be as high as $500,000 annually to comply with the change, which means fewer resources for patients and more dollars being directed to drug companies and wasted on filling out unnecessary paperwork. The federal government completely ignored these costs on health care providers when announcing this new program.
The local impact isn’t limited to additional costs because the new rebate program forces hospitals to pay full price for drugs and wait to get discounts back. If a rebate is denied, the hospital absorbs the loss while patients and insurers pay the same. Manufacturers could have new power to deny rebates and deny the participation of contract pharmacies. Contract pharmacies are already telling us they do not want to participate. Over time, this reduces hospital revenue and limits funds used for patient care and community programs.
Or, as St. Mary’s in Lewiston, which is one of the plaintiffs suing to stop this program, said in a recent legal filing, “the 340B rebate program will undermine the very mission of St. Mary’s to provide healthcare to the underserved in our region.” The hospital, which currently operates the only behavioral health emergency department in the entire state of Maine, saves an average of $3.3 million annually from the current 340B program. If the new rebate program diverts dollars from the hospital, it “risks devastating medical consequences to patients in our community,” St. Mary’s has said.
Maine hospitals have successfully used the savings provided by the federal 340B program to help care for our families, friends and neighbors, providing services above and beyond what would otherwise be available, and serving as a needed safety net in rural and underserved communities where such help is rapidly dwindling due to workforce restraints and rising costs incurred for providing care. That is why it is critical that the courts stop HHS from implementing this misguided and unlawful attempt to change a program that has been working successfully for patients and communities for decades.
