Michelle Nyman, Deputy Vice President of Alliances & Public Affairs at the Pharmaceutical Research and Manufacturers of America (PhRMA), said that hospitals receiving significant federal drug discounts are not offering charity care to patients. The statement was made on X.
“Hospitals receiving more than $50 billion in federal drug discounts are not providing charity care to patients,” said Nyman, Deputy Vice President, Alliances & Public Affairs. “The proposed Most Favored Nation rule would continue to weaken the 340B Drug Pricing Program.”
The 340B Drug Pricing Program is designed to assist healthcare providers serving low-income patients by providing discounted outpatient drugs. However, concerns persist regarding whether participating hospitals are utilizing these savings for charity care. According to the 2023 Charity Care Report, many hospitals benefiting from 340B discounts fail to adequately provide charity care to their communities.
Pharmacy Benefit Managers (PBMs) have been identified as exploiting the 340B program by leveraging their position to secure lower drug prices without ensuring that savings benefit patients. A study published in the National Library of Medicine indicated that PBMs often manipulate reimbursement rates, resulting in reduced revenue for covered entities while increasing PBM profits.
In New Jersey, pharmacy chains are encountering challenges due to evolving business models influenced by PBM practices. According to NJBIZ, the number of independent pharmacies has been declining as large chains dominate the market, partly driven by PBM cost management strategies. This shift has raised concerns about access to affordable medications in smaller communities.
The Most Favored Nation (MFN) rule, announced as part of efforts to lower drug prices, aims to align Medicare payments for certain medications with the lowest prices paid by other developed countries. However, this policy could negatively impact the 340B Drug Pricing Program by reducing reimbursement rates for hospitals that provide charity care, thus weakening the program’s ability to support low-income patients. The White House said that the rule is intended to stop foreign free-riding on American pharmaceutical innovation, but healthcare advocates warn it may inadvertently harm 340B-covered entities.
Nyman has been with PhRMA for over 29 years and currently serves as Deputy Vice President of Alliances & Public Affairs. Her role focuses on advocacy and public relations concerning pharmaceutical policies. Based in Washington, D.C., she has held her current position since July 2012.
