April 340Buzz: Pink elephants and strange bedfellows
I write this month’s edition of the Buzz on the heels of the 340B Coalition Winter Conference in San Diego, where the conspicuous absence of a key stakeholder group was the pink elephant in the room.
I’m referring, of course, to the National Association of Community Health Centers, or NACHC, which has cast its lot with Pharmaceutical Research and Manufacturers of America (PhRMA) in a dubious bid to revamp 340B. The unlikely partners have formed the curiously named Alliance to Save America’s 340B Program, or ASAP 340B, in what 340B Report called an “historic and explosive” move.
“In the program’s 30-year history, NACHC is the first major 340B provider group to decide to partner with PhRMA on policy to reshape 340B,” the publication noted.
That decision has raised plenty of eyebrows, particularly among the 340B hospitals and federal grantees in attendance last week in San Diego. More than a few openly questioned whether NACHC was naïvely trying to insulate themselves from further harm from the drug manufacturers. One meme circulating on social media depicts the provider group as Little Red Riding Hood in bed with the PhRMA as the Big Bad Wolf. I titled my own conference presentation “Stranger Things and the Upside-Down World,” after the hit series on Netflix.
Last month, ASAP 340B released a 10-point plan to reform the program, and later a confidential document fleshing out each point leaked and began circulating among covered entities and other stakeholders. Among other things, the confidential document makes clear that ASAP wants to:
- Virtually eliminate 340B pricing in telehealth prescriptions for all hospital types, with limits for federal grantees
- Change the definition of an eligible patient
- Place strict limits on 340B discounts at specialty or mail-order pharmacies
- Curtail eligibility for disproportionate share hospitals and limit them to five retail contract pharmacies
Why 340B Matters
In response, we’re redoubling our counter-offensive over at 340B Matters, the advocacy group launched by Sentry in 2016 and now supported and underwritten by The Craneware Group. We released our own series of 10 principles to help infuse stability, equity, and transparency into the program.
If you find yourself in need of a morale boost, check out former U.S. Rep. Henry Waxman’s guest column in Health Affairs. Waxman, a strong program ally who retired in 2015 after four decades in Congress, provides a helpful background on 340B, including its genesis following enactment of the Medicaid “best price” drug law, and the intent of the program. “As we consider the role of the health care safety net moving forward, we must acknowledge the critical role 340B has played over the last 30 years,” he wrote.
We also want to thank Reps. Doris Matsui (D-Calif.), Jake LaTurner (R-Kan.), and Bob Latta (R-Ohio), in addition to Sen. John Thune (R-S.D.) for their support of 340B during March Madness—also known as the start of congressional hearings in key committees with jurisdiction over 340B.
Operational challenges mount
Meanwhile, five more drug manufacturers — AbbVie, Amgen, GSK, Novartis, and Pfizer — are taking a cue from Johnson & Johnson in expanding their existing contract pharmacy restrictions. All will now require covered entities that lack an in-house pharmacy to designate a single contract retail pharmacy (some of them within a 40-mile radius of the hospital) and submit claims data using 340B.
- GSK’s new policy applies to all its products and no longer exempts grantees. For its specialty and oncology products, the single contract pharmacy must be part of the company’s limited pharmacy network. Entities that cannot dispense these products must designate a single specialty pharmacy for each of the limited pharmacy network products.
- Novartis, the first manufacturer to start a 40-mile radius limitation, removed that requirement but now only allows one contract pharmacy designation if the hospital doesn’t have an in-house pharmacy. It also asks hospitals to continue to voluntarily submit data. (Did I say, “upside-down world”?)
- Finally, Pfizer’s restrictions apply (for now) only to its billion-dollar immunosuppressant Xeljanz.
Got all that?
It’s further example of how, when covered entities think everyone is playing Hearts, the pharmaceutical companies turn out to be playing Spades. Our “Manufacturer Mayhem” chart has now been revised over 35 times. Keeping up with the changes is just one way we are helping our customers manage these nuances, in addition to product enhancements to help navigate reporting requirements, pricing visibility, and impact.
Meanwhile, a new report from 340B Health finds that the contract pharmacy restrictions from the first five manufacturers to enact them — there are now 21 and counting — stripped an estimated $1.1 billion in savings from covered entity hospitals from 2020 to 2021. An accompanying survey found that nearly one in five hospitals— and one in three critical access hospitals — have cut services as a result.
For its part, HRSA has once again asked Congress to give it regulatory authority over the 340B program so the agency can enact “reporting requirements and definitions for the use of (340B) savings and contract pharmacy utilization.” We also learned last month that HRSA sent letters to a number of hospitals asking how they define a 340B patient and use their savings, among other things. It seems likely this tactic is intended to reinforce their plea to Congress for rule-making authority.
Other notable news:
- The Centers for Medicare and Medicaid Services has announced the first 27 prescription drugs that will be subject to Part B rebates because their prices rose faster than the rate of inflation.
- The U.S. House Committee on Oversight and Accountability, led by James Comer (R-Ky.), has launched an investigation into the “anticompetitive tactics” of pharmacy benefit managers. Still no word from the Federal Trade Commission on its own investigation into PBMs, an industry segment that seems a little short of allies these days.
- Hospital entities are still waiting for CMS to release its proposed remedy for Medicare Part B reimbursement cuts for public notice and comment, which should be coming soon.
I have more to say about the 340B Coalition Winter Conference in a separate post on 340B Matters. We encourage you to sign up for our newsletter, follow and retweet us on Twitter or on LinkedIn, sign up for our monthly newsletter, or .
In the meantime, keep doing the good work lifting up our patients and keeping the safety net intact. We all know it isn’t easy!
If you’d like to continue the conversation with me, schedule a time that works for you and I’ll be in touch!