Statement from Duke University Health System

04/02/2013 10:06 PM

04/02/2013 10:36 PM

Duke University Hospital meets the criteria for participation in the 340b drug discount program. DUH has policies and procedures in place to comply with 340b program requirements. The discounts available to DUH as a qualified 340b hospital are used by Duke as intended by the program as they enable Duke to expand services to patients and to provide charity care and community based programs.

Indeed Duke provides many services for low income and uninsured patients through savings realized from the 340b program, including those listed below.

Among those services and programs that were identified to Senator Grassley’s office in response to his inquiry are:

1) Hospital Sponsorship Program — Patients with limited financial resources discharged from DUH, or who have received services at a DUH clinic, are provided with free or discounted medications. The HSP has been in place for over 10 years and in 2012 alone, Duke provided over 8,000 prescriptions through the program.

2) Patient Assistance Program — Duke employs a staff of five full-time pharmacy technicians whose sole duties are to assist low income and uninsured patients with medication access issues by identifying potential free medication programs, assist patients through the application process and ensure delivery of the medications. The program focuses on obtaining access to high-cost medications for patients with chronic medical conditions, including organ transplantation, oncology and HIV/AIDS. The number of patients served through this program has increased in recent years due to the proactive efforts of this program.

3) Drug Replacement Program — Duke patients with limited financial resources receive free intravenous drugs upon discharge to help them safely transition to home care. This program enables patients to return to their homes and reduces the likelihood of readmissions or other adverse events by ensuring access to essential intravenous drugs. The program is not reimbursed by payers and is fully funded by Duke.

4) Clinical Pharmacy Services — Duke currently employs 11 full-time clinical pharmacists with advanced training as Doctors of Pharmacy to provide clinical pharmacy services. The value of clinical pharmacy services in terms of improving health care quality and reducing costs has been recognized both by Congress and the Department of Health and Human Services. HRSA has identified the use of savings from the 340b program as a way to promote the adoption of these effective services.

DUH is a major provider of care to financially disadvantaged patients as reflected by the fact that its Medicare disproportionate share adjustment percentage is 18.9 percent as compared to the minimum threshold requirement of 11.75 percent for participation in the 340b program. Duke operates a host of other programs for the direct benefit of the low income and uninsured populations, including but not limited to Project Access of Durham County, Local Access to Coordinated Health Care (LATCH), Just for Us, and four neighborhood-based clinics in Durham for low income and uninsured patients.

Savings achieved through participation in the 340b program enhance Duke’s ability to maintain and expand its current array of clinical services and outreach programs designed to specifically benefit low income and uninsured patients.

It’s regrettable that a fuller representation of these services was not included in the letter sent to HRSA.

Importantly, the letter sent by Senator Grassley to HRSA presents “revenue” figures that we understand are not comparable across the three institutions. Our understanding is that the chart on page one of the letter presents amounts for at least one of the other institutions that reflects the difference between the expenditures on 340b drugs and the estimated amount that would have been expended on those drugs without the 340b discounts (i.e. the “savings” resulting from access to 340b discounts). The equivalent “savings” figures for DUH are as follows:

2008 – $19.1 million

2009 – $20.7 million

2010 – $26.8 million

2011 – $43.5 million

2012 – $48.3 million

Again, its regrettable that the letter presented the financial information in a manner that suggested a comparison across the institutions that is not valid.

Regarding your question related to profits:

While it is not relevant to speak in terms of “profits” at a nonprofit institution, it is certainly the case that the revenues generated through the 340b program are important to supporting our nonprofit patient care mission, including our ability to provide a substantial amount of charity care and community benefit for low income and uninsured populations. Available revenue is reinvested into facilities, technology upgrades and service expansion that benefit all patients, including those who are financially disadvantaged.

DUH monitors revisions to 340b requirements, and will, of course, conform to any changes in those requirements should they occur.

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