It could take federal courts years to ultimately resolve drug manufacturers’ lawsuits over whether they must charge lower prices when 340B covered entities use contract pharmacies, a hospital association leader said yesterday during her remarks opening the 340B Coalition’s virtual summer conference.
“As an attorney, I know from experience that these types of litigation can take months or even years to resolve, especially if appeals courts need to get involved,” 340B Health President and CEO Maureen Testoni said.
The six drug companies denying 340B pricing when entities use contract pharmacies and suing to preserve their ability to keep doing so “have given every indication they will continue to withhold 340B discounts for as long as they possibly can,” Testoni said. Their “unprincipled actions” during the COVID-19 pandemic “have already caused substantial damage to the health care safety net and the patients who rely on it,” she said.
Testoni urged her audience to recognize “the hundreds of drug manufacturers that have not taken these actions and that continue to adhere to 340B and respect their obligation to safety net patients.”
“We don’t always show enough appreciation for the role drug companies play in supporting our safety net through 340B,” she said.
Health care payers, pharmacy benefit managers (PBMs), and drug industry vendors meanwhile have implemented problematic policies, Testoni said. She cited industry vendor Kalderos’ platform to convert 340B discounts into rebates, insurer Humana’s drug reimbursement reductions for 340B providers, and PBM Express Scripts’ “unprecedented” requirement that covered entities and contract pharmacies retroactively identify 340B claims.
“340B claims should not be paid or handled any differently than non-340B claims,” Testoni said.
“The 340B law and program regulations do not permit implementation of such requirements without an official federal rulemaking process,” she said. “We advocate against any such attempt by third parties to take unprecedented control over when and even if required 340B discounts are even given to covered entities.”
Bipartisan legislation introduced this month by U.S. Reps. David McKinley (R-W.Va.) and Abigail Spanberger (D-Va.) “would directly prevent some of these acts,” Testoni said. “We are all pushing for Congress to approve it.”
She also applauded bipartisan House and Senate letters urging the U.S. Health and Human Services Department (HHS) to take action against drug companies denying 340B discounts, and bipartisan bills to protect hospitals from losing their 340B eligibility during the pandemic and give 340B rural and free-standing cancer hospitals access to 340B pricing on orphan drugs.
“When 340B providers are not being treated fairly, we know we can count on these champions to be in our corner,” Testoni said. 340B providers meanwhile are staying vigilant to ensure that any congressional legislation to lower drug prices “preserves the health care safety net,” she said.
In state capitols, “more than a dozen states have enacted legislation barring PBMs from discriminating against covered entities on the pay rates they set or the payment policies they impose,” Testoni said.
On the other hand, she said several states are moving to transfer pharmacy benefits from Medicaid managed care to Medicaid fee for service, which “would diminish the 340B benefit,” she pointed out. “Some states also are considering additional pay cuts to physician administered drugs,” she said. (340B Health yesterday clarified that Testoni was speaking “specifically in reference to the Tennessee governor’s 2022 budget recommendation that proposed a 340B payment change to both retail and physician administered drug benefits for hospitals.”)
The COVID-19 pandemic “delayed but did not stop these moves altogether,” she said. If covered entities keep working hard to demonstrate the value of 340B, “that could go far toward heading off these types of changes.”