WASHINGTON -- While the battle over ObamaCare garners all the headlines, there's another health care battle brewing with powerful adversaries and once again in the middle of it all is former Louisiana Congressman Billy Tauzin. This time, the issue is little known federal program -- called 340B -- that enables hospitals and medical clinics that serve low income and...
WASHINGTON -- While the battle over ObamaCare garners all the headlines, there's another health care battle brewing with powerful adversaries and once again in the middle of it all is former Louisiana Congressman Billy Tauzin.
This time, the issue is little known federal program -- called 340B -- that enables hospitals and medical clinics that serve low income and uninsured patients to buy drugs at a discount. The battle is over those who say the program is being abused -- with some medical providers getting Medicare and private insurance reimbursements at higher rates than the discount prices they are paying drug companies.
On the other side are hospital administrators who say without the program they'd be hard pressed to continue serving their current levels of low income patients.
Tauzin, a one-time Democrat who switched parties in 1995 after Republicans captured the House majority and went on to become the chairman of the powerful House Energy and Commerce Committee, is heading up a new coalition fighting to retain 340B, while embracing reforms to clean up any alleged abuses.
His new Medicine Access and Compliance Coalition has led a few representatives of drug companies to complain Tauzin, who for more than five years was the highly paid president of PhRMA, the drug company lobbying group, is now working against industry interests.
Tauzin, now a Washington lobbyist, rejects that criticism, saying that while a few drug companies oppose 340B, most accept it as the law of the land and are simply seeking the same kind of reforms his group champions. Tauzin said he's spoken to the current president of PhRMA and that they are "on the same page" of wanting the program to continue with reforms.
"PhRMA and I are not at odds, at all," Tauzin said.
Still, there's little doubt that Tauzin is in the center of the battle that pits some of Washington's most powerful interest groups - hospitals and drug companies. It's nothing new for Tauzin.
As chair of the House Energy and Commerce Committee, Tauzin helped write and pass the 2003 legislation to create the prescription drug benefit for Medicare recipients. Soon thereafter, following a near death battle with cancer, Tauzin joined PhRMA, leading some to suggest he was rewarded with a high paying job after passing a bill that benefited the drug industry.,
Tauzin vehemently denied those charges, and eventually negotiated with the Obama administration over the Affordable Care Act, and won some limits on drug company liabilities in exchange for the group's support.
Tauzin now not only heads one of the major advocacy groups on 340B drug program, but is also on the board of a company Capture RX, which provides software to hospitals to help them run their 340B program.
The 340B program has come under criticism from some members of Congress, including Sen. Chuck Grassley, R-Iowa, and Rep. Bill Cassidy, R-Baton Rouge. Cassidy questioned whether the program has sufficient oversight.
"As a physician who has spent 20 years caring for the uninsured, I recognize the value and importance of the 340B drug discount program," Cassidy said. "Given this importance, we must be sure that its good work is not threatened by those who misuse."
Grassley said it appeared that Medicare and private insurance are paying much more for some drugs than hospitals and clinics enrolled in the discount program.
"If non-profit hospitals are essentially profiting from the 340B program without passing those savings to their patients, then the 340B program is not functioning as intended," Grassley said.
There seems to be a consensus by both supporters and critics of the program that the Health Resources and Services Administration, which oversees 340B, lacks sufficient staff to provide proper oversight, especially with the program's growth. The program now includes about one-third of the nation's hospitals - roughly three times more than eight years ago.
But the agency has been issuing more critical audits recently. One of the audits found that Primary Health Services Center in Monroe had benefited from duplicate discounts.
Advocates for the program said the program, which provided some $6.9 billion in discounts last year, was always intended to help both low-income patients and safety-net hospitals.
"This program is vital to the safety net hospitals," said Danny Jackson, director of pharmacy services for the LSU Health System. "At the LSU Health System, approximately 46 percent of the patients served get free care. Without 340B, the patients would not be able to afford the medications that keep them out of the hospital and out of the emergency room."
PhRMA was asked about its view of the 340B program, and for its views on its former CEO and president's advocacy for it.
"PhRMA believes in the importance of the 340B program, but recognizes the need for improving and refining the safety net program to ensure that it is helping those it was intended to help, namely uninsured indigent patients," said PhRMA senior vice president Matt Bennett.
"We welcome working with all stakeholders to ensure the program is sustainable and provides a clear benefit to the patients it was intended to help."
While Tauzin said he and PhRMA generally see eye to eye on 340B, the Safety Net Hospitals for Pharmaceutical Access (SNHPA) said the drug industry is attacking the program almost on a daily basis. In a February white paper, PhRMA said some hospitals have used the program to increase revenue, and that the program had moved beyond its original goal of helping low-income patients gain access to needed drugs.
SNHPA rejected the criticism.
"The 340B program strengthens the health care safety net, allowing vulnerable patients to access medicine and health care services they need to stay out of the hospital," said SNHPA President and Chief Executive Officer Ted Slafsky,