Remarks to the 340B Coalition Conference

Prepared Remarks of Elizabeth M. Duke, Ph.D.
Acting Administrator, Health Resources and Services Administration

Fifth Annual Meeting
Washington, D.C.
July 12, 2001

Thank you for inviting me to be with you.  I’m very pleased to be here.

Today I’m going to discuss HRSA’s efforts to ensure access by all Americans to quality health care.  The outpatient drug discount program established by Section 340B of the Public Health Service Act is an important part of this work.  Effective use of the 340B authority to strengthen the nation’s health care safety net is a top priority at HRSA.

But the ability to buy prescription drugs at reasonable prices is, as you all know, a very hot topic for all Americans.   President Bush and Secretary Thompson are very concerned about the burden of rising prescription drug prices on Americans – especially the elderly.

President Bush is expected to announce later today a plan that will reduce drug costs for older Americans.  According to press reports, companies that manage prescription drug benefits will be encouraged to buy drugs in bulk at lower prices.  The companies will sell pharmacy discount cards to Medicaid patients, who then will use them at any pharmacy to cut their drug expenses.

Reports say that the President also wants Medicaid to begin including voluntary coverage of prescription drugs, apart from the discount card plan.  During the campaign, he said the government should pay drug costs for low-income elderly, and a percentage of the cost for other Medicaid patients.

In this current environment, the experience you and your vendors have in negotiating lower bulk prices and setting up and maintaining drug distribution services represents an important resource.  I urge you to give us and members of Congress the benefit of your knowledge in the coming weeks and months.

Let me begin now by giving you an overview of HRSA’s portfolio.

Our programs reach into every corner of America, providing a solid safety net of health care services that millions of our fellow citizens rely on.  President Bush and Secretary Thompson are strongly committed to strengthening and extending this safety net.  They have made it clear that providing more health care directly to Americans is the Department of Health and Human Services’ first duty and most important mission.

• HRSA-supported health centers represent the foundation of the U.S. health care safety net, and all of the health center grantees are eligible to participate in the 340B drug discount program.  Health centers annually serve more than 10 million people at more than 3,200 access points across the nation.
  
  

• HRSA also administers the Ryan White CARE Act, which gives low-income people with HIV/AIDS the medication and care they need to get better or stay well.  Many of these grantees, too, participate in the 340B program.
  
  

• HRSA works with States to ensure that babies are born healthy and that pregnant women and children have access to health care.
  
  

• We train physicians, nurses and other health care providers and place them in communities where their services are desperately needed.
  
  

• We help rural health care providers build coordinated systems of care to serve local residents better.
  
  

• And we oversee the Nation’s organ transplantation system.

President Bush’s proposed FY 2002 budget for HRSA asks for an appropriation of $5 billion.  It features three presidential initiatives:

• The first, the Health Centers Presidential Initiative, asks for $1.3 billion for health centers, an increase of $124 million above the FY 2001 appropriation.  These additional funds will allow health centers to create or expand 200 access points and serve up to 1 million additional patients, almost half of them uninsured.  The added funds represent the first installment of the president’s plan to increase or expand health center access points by 1,200 over five years and eventually double the number of people served.
  
  

• The second presidential initiative looks to reform and improve the National Health Service Corps.  This initiative will examine several issues, including the ratio of scholarships to loan repayments, and will consider amending the Health Professional Shortage Area definition to include non-physician providers and J-1 and H-1C visa providers practicing in communities.  These efforts will enable the NHSC to more accurately define shortage areas and target placements to areas of greatest need.
  
  

• The third presidential initiative, called the Healthy Communities Innovation Initiative, will create a partnership among HHS agencies to target existing resources to areas where health needs are greatest.  Under the plan, HRSA would make available about $220 million through current grant activities, with other funds coming from the Centers for Disease Control and Prevention and the Centers for Medicare and Medicaid Services.

The president’s budget also includes an increase of $5 million for the Organ Procurement and Transplantation program.  The requested level of $20 million is targeted to a new effort to increase organ donation and education.  And in the coming year, HRSA will provide materials to states and schools to give every teenager an hour of education on donation prior to receiving a driver’s license.

Finally, the budget request responds to a projected shortage of nurses in communities across America by adding $5 million for nurse training -- $1.5 million for the Nursing Workforce Diversity program and $3.5 million for the Basic Nurse Education and Practice program.

That’s a quick summary of HRSA’s work.  Now I’d like to talk about the work of our Office of Pharmacy Affairs.

In the last two years, the Office has broadened its mission to help health centers, states and others develop quality programs for delivering comprehensive, affordable pharmacy services.  This includes providing technical assistance and advice to help covered entities make the most effective use of the 340B authority.  It also includes grants and professional assistance in starting a pharmacy service or upgrading an existing pharmacy and integrating it with the delivery of clinical care.

Let me call your attention to three significant developments in our pharmacy services assistance during the past year.

Last month Secretary Thompson announced a new effort to ease access to the 340B Drug Discount Program so that more of the indigent and uninsured people whom we serve can obtain needed medications.  The Secretary said this initiative – which we call Alternative Method Demonstrations --  “will help us stretch scarce resources and buy more of the drugs patients need.”

The new initiative will allow organizations that participate in the 340B drug discount program to reduce administrative costs and make buying drugs easier for patients.

A statement posted to the Office of Pharmacy Affairs web site (http://www.hrsa.gov/odpp) describes the ground rules for designing and submitting proposals and the process that HRSA will use to review and approve them.  All approved projects must have a rigorous inventory control and dispensing system to prevent drug diversion and Medicaid rebates on drugs purchased at 340B prices.

If you feel your patients could benefit from the Alternative Method Demonstrations, we invite you to submit a proposal.

A second significant development has been our supplemental grants to Health Center networks for clinical pharmacy services.  These grants help provide essential clinical pharmacy services to health center clients at an affordable cost.  The initiative seeks to identify the most cost-effective way to eliminate barriers to pharmaceuticals for clients served at HRSA-supported sites.

To date, we’ve awarded $3.4 million to 14 Health Center networks.  We expect to make grants to four additional networks later in the fiscal year.

Finally, we are planning to award $300,000 in grants to up to four additional Health Center networks so that they can begin providing comprehensive pharmacy services for their patients.  These start-up projects will support either the establishment of an in-house pharmacy or contracted services using local pharmacies.

Let me conclude by speaking briefly about the pharmacy workforce situation, a topic that is the subject of one of the breakout sessions.  Last December, HHS sent a report to Congress on The Pharmacist Workforce: A Study of the Supply and Demand for Pharmacists.  The study, which HRSA prepared, said that the number of unfilled full- and part-time pharmacist positions in commercial U.S. pharmacies has more than doubled since 1998.  It calls the current shortage of pharmacists “acute.”

And that’s just the situation in commercial pharmacies.  The recruitment and retention of pharmacists in the non-profit sector represented by members of the 340B coalition is worse than in the chain drug stores.  A March 2000 survey by the National Association of Public Hospitals and Health Systems and their partners found an 11% vacancy rate.  It also said that responding hospitals take an average of six months to fill a vacancy, with 18% taking over a year.

Professional organizations representing pharmacists and health care providers have put forward a number of proposals to reduce the shortage.  Among them are: expanding enrollment in schools and colleges of pharmacy; developing a uniform prescription benefit card; and making greater use of pharmacy technicians, computer technology and foreign-trained graduates.

While Department officials consider these proposals, the National Health Service Corps is moving ahead to approve applications for loan repayment assistance for three of the clinical pharmacy demonstration projects approved in FY 2000.  And if Congress approves the presidential reform initiative for the Corps that I mentioned earlier, we will be able to support higher levels of loan repayment assistance for pharmacists in the future.

Again, I thank you for inviting me to meet with you today.  I greatly appreciate your commitment to expanding access to quality medical care for all Americans.

Thank you.