Remarks to the 13th Annual 340B Coalition Conference

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by HRSA Administrator Mary K. Wakefield

July 13, 2009
Washington, D.C.

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I'm very pleased to be here with you today. It's a pleasure to be talking to a group associated with and interested in a program that is extremely important to the health of thousands of people across the nation.

I was aware of the 340B program even before I came to HRSA in March from the University of North Dakota, my home state, where I was associate dean for rural health at the School of Medicine and Health Sciences, and director of the university's Center for Rural Health.

As Jimmy mentioned, I worked in Washington before I became HRSA administrator. In the 1990s, I was chief of staff to two North Dakota senators: Kent Conrad, who is still in office, and the late Quentin Burdick.

In 2004, I was elected to the Institute of Medicine and I've served on a number of IOM committees – including those that produced landmark reports on quality, or the lack of it, in American health care.

I emphasize these parts of my career because I want you to know that while I'm new to HRSA, I'm not new to the issues that bring all of you here: access to health care services; improving care quality; and working with Congress to get that done.

When I was offered the job as HRSA administrator, I viewed it as an opportunity to work in and with a great team, bringing my background in nursing, in rural health care, in public policy and in health-related research to an agency that touches on some of the most important facets of health care – increasing access to quality care, distribution of the health care workforce and more. It's all in HRSA.

For example:

• Our health centers provide quality primary care to some of the neediest populations in America;
• Our Ryan White grantees provide some of the best care for people living with HIV/AIDS that can be found anywhere -- a model, really, for HIV/AIDS care worldwide;
• Our Maternal and Child Health experts lead the Federal government's efforts to improve the health of mothers and their children, and better the lives of persons with hemophilia;
• Our health professions staff helps train and place health care professionals where they're needed most;
• Our transplantation staff helps to improve thousands of lives each year by directing the country's organ donation, distribution and transplantation system;

And our Office of Pharmacy Affairs has led continued annual growth in the 340B drug discount program. The program's 14,000 covered entities across the country bought about $5 billion in discounted drugs last year. That represents a remarkable benefit for medically underserved patients across America. I congratulate Jimmy Mitchell and his staff at OPA, and Joyce Somsak, associate administrator of HRSA's Healthcare Systems Bureau, for their efforts in helping this program to reach even more people in need with each passing year, and I'd like to ask Jimmy, Joyce, and the OPA staff to please stand so that the audience can recognize your good work in expanding access to pharmacy services.

In addition to recognizing the staff, I think it's also important to highlight a recent milestone in the 340B program. HRSA's FY 2009 budget included -- for the very first time – a line-item appropriation for the 340B program. 340B has been part of HRSA's work since 1993, but 2009 marks the first budget in which Congress directly specified funds for the program and the Office of Pharmacy Affairs. I imagine that many of you in the audience may have had a role in that. And President Obama's 2010 budget proposes that line-item funds be expanded from $1 million this year to $3 million next year, clearly a recognition of the importance of this program.

With regard to more specific activity underway around this program, many of you know that we have three Federal Register notices pending to improve administration of the 340B program.

• One, first published on Jan. 12, 2007, would clarify the definition of “patient.” HRSA feels very strongly that a clear and enforceable definition is needed to prevent non-eligible persons from receiving 340B drugs and, thus, to ensure the program's integrity. Based on the comments we received, HRSA has made revisions to the original notice, and we are considering plans to publish the revised notice for additional comments. We feel confident that the revisions will limit abuse of the program while providing greater clarity on patient eligibility. The revisions reflect our continuing determination to improve program integrity while supporting the full benefits of the 340B Program.
• A second proposed guidance published on Jan. 12, 2007, would give covered entities the opportunity to contract with multiple pharmacies. We tested this contracting method in our Alternative Methods Demonstration Projects and determined that it did not create a risk of diversion or duplicate discounts with the Medicaid rebate program. The ability to contract with multiple pharmacies will improve patients' access to needed drugs, and we are prepared to recommend that the notice be published in final form. This proposed guidance is currently making its way through the Departmental clearance process.
• The third Federal Register notice, published on July 9, 2007, would make children's hospitals eligible for participation in 340B. The Department has cleared this notice and it is in the Office of Management and Budget for their review and approval before publication.

Jimmy will address in further detail the status of all three of these Federal Register notices in his remarks later today.

As many of you know, Members of Congress are looking closely at the 340B program and are proposing changes to expand the program's reach and improve its administration.

For example, a bill introduced by Sen. Jeff Bingaman (D) of New Mexico, S. 1239, would add a number of institutions to the list of covered entities eligible to participate in the 340B program. They include children's hospitals, critical access hospitals in rural areas, rural referral centers, and certain community hospitals.

The bill also would extend the 340B discount to inpatient drugs, allow certain group purchasing arrangements, and improve program integrity.

Senator Kennedy's overall health care reform legislation includes, almost in its entirety, the language in S. 1239.

In the House, HR 444, introduced by Rep. Bobby Rush (D) of Illinois would make similar changes, but would include even more new covered entities. It also includes more language on the calculation of the Medicaid Credit and has additional provisions on multiple contract pharmacies and interagency cooperation.

While I'm citing some examples of the attention the 340B program has in Congress, I, of course, will not comment this or any on pending legislation. But I will say that when Senators and Representatives ask HRSA's opinion about legislation to improve 340B, we generally urge them to make sure that any changes they intend are:

• enforceable and easy to administer; and that they
• limit unintended consequences and distribute benefits to all eligible safety-net providers.

Let me shift gears now to talk about an exciting HRSA initiative that is familiar to some though perhaps not all of you.

Many of you know about the Patient Safety and Clinical Pharmacy Services Collaborative because you are already involved in it. The Collaborative has the support of leading organizations such as the American Pharmacists Association, the Joint Commission, the American Nurses Association, the American College of Obstetricians and Gynecologists, FDA, AHRQ, IHS and more. This Collaborative focuses on solving some of the problems that the IOM addressed in its reports, “To Err is Human” and “Crossing the Quality Chasm”.

What is the Collaborative? It's an effort directed by the Office of Pharmacy Affairs and HRSA's Center for Quality and it focuses on improving patient safety and health outcomes by integrating clinical pharmacy services into the care of patients with multiple chronic diseases like diabetes and hypertension.

To those of you who are not yet involved, our HRSA staff here can get you signed up before the July 31 deadline for the second wave of the collaborative. You may want to attend the breakout session later in the conference that presents this initiative in much greater detail.

The collaborative works by organizing community-based health providers into teams that learn ways to improve patient safety and health outcomes. Then they return home to implement those practices. To date, teams from 68 communities representing 210 health care organizations are involved in the Collaborative.

Although the Collaborative began just a year ago, already we've seen remarkable, inspiring successes. For example, a statewide team in Arizona led by the El Rio Community Health Center in Tucson recently won a Pinnacle Award from the American Pharmacists Association Foundation for their work in improving diabetes patients' blood pressure, blood glucose and cholesterol levels. The Collaborative is a great initiative and we want more of you to join.

Let me switch gears and conclude by making a comment about efforts underway to reform health care in this country. Clearly, you are gathered in Washington in one of the most decisive periods in our recent history. Congress is deep into debates over health care reform, and we hope lawmakers will send reform legislation to President Obama for his signature later this year.

Reforming health care is overdue, it has been delayed for too long, and it cannot wait. It cannot wait because the status quo is unsustainable for American families and businesses. For most families, the status quo means paying more each year for health insurance, getting fewer benefits and being at risk of losing their coverage altogether if they lose their job, switch jobs, or get sick.

Every day in America, families struggle with the cost of health care that threatens their financial stability, leaves them exposed to higher premiums and deductibles, and puts them at risk for a loss of health insurance.

Americans value their relationship with their doctor and the care they receive, but as costs rise and insurance benefits erode, they are asking for reform that protects what works and fixes what's broken.

That's why President Obama is asking Congress for reform legislation that will:

• Reduce costs to make health care affordable;
• Protect a patient's choice of doctor and insurance plan; and
• Assure quality affordable health care for all Americans.

Today, the call for reform is coming from the bottom up and from all across the spectrum – from nurses, doctors, and patients; unions and businesses; hospitals, health care providers, and community groups; mayors, governors, and legislatures; and Democrats and Republicans.

Many of the same groups that led the charge to block reform in 1993 came together in early May to say that reform can no longer wait. These industry groups are coming together to do their part to reduce the annual health care spending growth rate. In fact, the same organization that brought us the famous Harry and Louise ads now acknowledges that even Harry and Louise want – and need – health care reform.

Working together with the President and members of Congress, these groups have begun to take historic steps to ensure that health care reform will rein in health care costs for families, businesses and the government.

You hear in the news about the different approaches to reform, but in reality many areas of agreement already exist. Most of the plans being debated have a great deal in common:

• They guarantee the availability of quality affordable health care so you don't have to worry about being denied coverage if you have a pre-existing condition, if you're sick, or if you lose or switch your job.
• People who can't afford insurance will get help paying their premiums, based on their ability to pay.
• People will be able to compare health plans and shop for the best price and plan that suits their needs.
• The reform plans emphasize prevention and wellness so that Americans will be healthier and health care costs can be reduced.
• And each and every bill keeps faith with the fundamental principle that the President laid out for reform: “If you like what you have, you can keep it. Nothing in any bill will take this choice away from Americans.”

Working together, our goal is to enact health care reform by the end of this year.

Reaching that goal would be a major step forward for the United States. It would also extend and validate your work in expanding access to pharmaceuticals and pharmacy services to all who need them.

I thank you for your participation in and support for our 340B program and most importantly, your dedication to the people whose very health depends on you and on this program.

Thank you.