Where exactly does this end?
I think it’s fair to say that is the question every covered entity is asking after another month of developments that have largely been more favorable to the bottom lines of drug manufacturers than to the ability of our healthcare system to expand access to safety net services. Let’s review:
- In perhaps the most disheartening news, a federal judge vacated HRSA’s letter to AstraZeneca warning that its 340B contract pharmacy exclusions were illegal and were leading to overcharges for covered entities. That makes it 6-0 in favor of drug manufacturers in their lawsuits challenging HRSA’s enforcement letters, even in the cases where the judges’ rulings were more favorable for covered entities.
- GlaxoSmithKline gave us a bouquet of black roses for Valentine’s Day with its announcement of new contract pharmacy restrictions that go into effect April 1.
- Effective Feb. 1, NovoNordisk changed their policy from one designated pharmacy to two, leaving the second specialty pharmacy designation at their discretion.
- A new analysis from healthcare consultancy Real Chemistry (as reported by 340B Report) finds that 11 of the 15 top-selling brand-name drugs in the U.S. are now subject to the contract pharmacy exclusions.
- HRSA said earlier this month that at least three disproportionate share hospitals, and possibly more, have lost 340B eligibility and withdrawn from the program because of changes in patient mix due to the COVID-19 pandemic. It’s a good reminder to voice your support for 773, a bill introduced by Sen. John Thune (R-S.D.) that would protect covered entities from being ruled ineligible because of pandemic-related case mix fluctuations.
The other question on the lips of covered entities is, what should we do now?
Let’s first establish that it hasn’t been all doom and gloom out there in February. While we await the arrival of the Biden administration’s proposed replacement administrative dispute rule, an ADR panel rejected a motion to stop dispute-resolution proceedings filed by the National Association of Community Health Centers against AstraZeneca and Sanofi over its contract pharmacy policies.
In Michigan, Gov. Gretchen Whitmer signed three bills prohibiting pharmacy benefit managers and insurers from discriminating against CEs and contract pharmacies, the latest in a flurry of state-level activity in support of 340B.
In a speech in Virginia, Health and Human Services Secretary Xavier Becerra vowed to “continue to fight” drug manufacturers over the contract pharmacy standoff. And at the 340B Coalition Winter Conference, the head of 340B Health, Maureen Testoni, signaled a willingness to seek a legislative solution to the stalemate from Congress, where Reps. Abigail Spanberger (D-Va.) and Dusty Johnson (R-S.D.) are lining up an hour’s worth of remarks (despite postponing the original intended date) from lawmakers who support 340B. All good things.
But let’s be absolutely clear that we should expect more manufacturers to join the contract pharmacy train wreck. While Congress could, in theory, fix this, it remains unclear that there is sufficient will or momentum to take up the issue — and some groups, fearing Big Pharma’s clout on Capitol Hill, fear the prospect of opening a Pandora’s box. At any rate, with the midterm elections looming and Republicans poised to gain control of at least the Senate, the window for taking action is likely a narrow one.
My best guess is Congress opts to let the legal process run its course and instead waits to see how 340B fares in Biden’s proposed annual budget and whether it proposes to give HRSA more explicit authority over the program. If it does, it will be interesting to see how Congress reacts.
So far, my sense is that not enough of a groundswell of covered entities have protested to their congressional representatives or notified HRSA. Recently, I met with a large health system customer who asked me about their impact report from Sentry. It showed losses of $70 million due to the contract pharmacy exclusions from Sanofi alone. Those are the kind of numbers members of Congress need to hear about.
Next month, 340B Health will hold its customary legislative day, when it schedules as many visits on the Hill as it can squeeze in. Will they be able to generate some 340B March Madness? We shall see.
Earlier this month we held a well-attended webinar to discuss the “Manufacturer Mayhem” exclusions and conduct some interactive polling of attendees. Some notable, non-scientific findings:
- While responses varied, most respondents said that, since they began in July 2020, the exclusions had affected between 15% and 30% of their total 340B benefit.
- The most common results of those losses were the elimination of staff and nixed plans to expand patient services. Others reported things like cutbacks on the number of free-clinic patients served or the elimination of service lines for patients.
- Nearly half said they were still researching whether to submit data to a third party or manufacturer, while nearly a third said they were not comfortable doing so.
- Respondents overwhelmingly expressed a desire for Sentry to support them.
- Asked what resources would be most helpful to them, respondents indicated a desire for a “one-stop shop” for all information about the various contract pharmacy exclusions, with “guidance” as a close second. As a result, we now have one place in our Customer Success Community for all the supporting materials to help covered entities keep up with the ever-evolving manufacturer mayhem.
I also fielded far more questions than I had time to answer. So, I will be uploading a recording to the Success Community section of SentryCore to answer some of those questions.
In the meantime, let’s never lose our focus on the noble goals of 340B. Keep up the good fight!