AstraZeneca and Sanofi today made major moves to minimize their exposure to 340B discounts on drugs dispensed by contract pharmacies. Novartis originally planned to do the same today but did not.
AstraZeneca and Sanofi Block Access to 340B Contract Pharmacy Pricing, Novartis Does Not (UPDATED)
(UPDATED Friday Oct. 2, 2020, 4:30 p.m. EDT)
Congressman Grills Novartis Executive About Steps to Limit 340B Discounts
A Republican U.S. congressman from rural central Pennsylvania yesterday questioned the head of drug manufacturer Novartis’ U.S. operations about the company’s plan to put conditions on 340B discounts on its products, during a hearing about Novartis’ and other companies’ “unsustainable drug prices.”
“340B drug discounts are crucial for my constituents, and we should be thoughtful about how any changes to the program would affect us going forward,” Rep. Fred Keller (R-Pa.) told Novartis U.S. Country President Tom Kendris about Novartis’ recent 340B actions during the second day of a two-day hearing before the House Oversight and Reform Committee. Kendris and current and former top executives from Amgen, Bristol Myers Squibb, Celgene, Mallinckrodt, and Teva were called to testify.
“We need to ensure that changes to the [340B] program are manageable and in the best interest of health providers and the patients they serve,” Keller said.
Kendris testified on the day of Novartis’ deadline for 340B covered entities to start providing contract pharmacy claims data biweekly to the company’s vendor 340B ESP, so 340B ESP can scrub the data for duplicate 340B discounts and Medicaid, Medicare Part D, and commercial rebates. Covered entities have legal and operational objections to the demand for their data. Novartis said in August that, starting Oct. 1, it would stop providing 340B pricing to entities on drugs dispensed by contract pharmacies if the entities declined to share their data. It backed off from that position last week, a few days before Kendris’ testimony before Congress.
Drug manufacturer AstraZeneca yesterday limited 340B discounts on its products to just one contract pharmacy per entity, for those without an outpatient retail pharmacy. Manufacturer Sanofi did so as well, but only for entities that decline to upload their contract pharmacy claims data to 340B ESP.
Keller told Kendris he was concerned about how Novartis’ intention to cut off 340B pricing would affect Pennsylvania hospitals’ ability to offer home infusion and telemedicine services and expand outpatient care. He asked if Novartis shared its concerns about 340B duplicate discounts with hospitals before it acted in August.
Kendris said he though Novartis staff members were in contact with hospitals. He said Novartis supports 340B, but “we also believe over many years there have been some abuses that have grown into the system and we are trying to resolve those. We have raised the problem many times over the years with HRSA [the U.S. Health Resources and Services Administration]….The current state of the program is somewhat distorted from its original intent.”
Keller asked why Novartis planned to stop providing 340B discounts to hospitals on Oct. 1 if it was consulting with them.
“We had asked for the data by October 1st,” Kendris said. “We are still evaluating the responses, we have not heard from all the hospitals, and we are evaluating the data we have received and we are going to continue to evaluate that data. And as we move forward it’s going to be based on what we see in the data we receive.”
“So if a hospital hasn’t [supplied] that data by Oct. 1, are they still going to be able to participate in the discounts?” Keller asked.
“Yes, we still intent to honor valid, legitimate 340B discounts,” Kendris said. “And what we’ll do is see the responses, we’ll look at the data, and we’ll talk to the hospitals and move on from there.”
Keller also wanted to know if the platform that entities were being asked upload data to was secure, if uploading the data would be burdensome, and if third-party intermediaries could upload the data on hospitals’ behalf. Kendris said he believed that the platform was secure, that uploads “should take about five minutes every two weeks,” and that “I think we have to ask the hospital” for the data.
Drug manufacturers AstraZeneca and Sanofi instructed wholesalers to block NDCs for 340B contract pharmacy utilization beginning after midnight Oct. 1, but Novartis did not, 340B Report has learned.
The U.S. Health Resources and Services Administration said this morning it “continues to review the policies of these manufacturers and has yet to make a final determination as to any potential action.”
340B Report has obtained the text of an email Sanofi sent today to a covered entity affected by the manufacturer’s new policy on 340B pricing for drugs dispensed by contract pharmacies. In an attached FAQ, a question reads, “Does HRSA and/or Apexus [the HRSA contractor that operates the 340B Prime Vendor Program] support this initiative?” Sanofi answers: “HRSA encourages 340B covered entities to work with pharmaceutical manufacturers in good faith to resolve issues of non-compliance in the 340B program. Although neither HRSA nor Apexus has commented publicly on this specific initiative, Sanofi believes 340B ESP [its third-party vendor for the collection of covered entity claims data] provides a simple platform for Sanofi and 340B covered entities to engage collaboratively and in good faith to address duplicate discounts.”
In the main body of the email, Sanofi said, “Our initiative complies with the 340B statute and our agreement with the Department of Health and Human Services….At most, if a covered entity refuses to provide the requested data, we will restrict the entity’s use of contract pharmacy arrangements, but these entities will remain eligible to purchase at 340B prices for shipment to their own facilities. Sanofi will offer 340B pricing on a non-discriminatory basis through contract pharmacy arrangements if a covered entity provides the modest data Sanofi requests, which are identical to data already submitted by contact pharmacies to other third parties and by insurers to manufacturers for rebate purposes, to prevent duplicate discounts.”
340B Report has learned that Walgreens 340B Complete began contacting covered entities by email yesterday regarding AstraZeneca’s new 340B pricing policy. Walgreens said:
To avoid the unexpected adverse financial impact this manufacturer action may have on your 340B program, effective October 1st Walgreens will be blocking the specific AstraZeneca products that were listed in their notice. This does not mean that Walgreens has stopped dispensing AstraZeneca drugs to your patients, but it does mean that prescriptions for those specific products will no longer be validated into your 340B program. Your uninsured population may be at risk if they are unable to pay the retail cash price for those impacted AstraZeneca medications.
340B Report is attempting to confirm one report that AstraZeneca might have excluded some of its NDCs from being blocked for certain customers for contract pharmacy utilization.
AstraZeneca and Sanofi have not responded to requests for comment. Sanofi had threatened to pull the plug on 340B contract pharmacy pricing unless covered entities provided a wide range of claims data to 340B ESP by Oct. 1. Covered entities say Sanofi and other manufacturers using 340B ESP as their agent are not entitled to the claims data that they want absent demonstration of reasonable cause and outside of the scope of a formal manufacturer-initiated audit authorized by HRSA. They say the companies do not have a legal right to request data that could be used to address Medicaid managed care, Medicare Part D, and commercial duplicate discounts. They also say the data collection will be burdensome, could invade patients’ privacy in violation of federal law, and requires them to accept disagreeable terms of service.
Drug manufacturer Eli Lilly and Co. on Sept. 1 limited 340B pricing on its products to covered entities and their child sites only, or to just one contract pharmacy per entity for those without an in-house pharmacy. Lilly also imposed strict conditions on 340B covered entities on charges and reimbursement for Lilly insulin. The U.S. Health and Human Services Department general counsel told Lilly in a Sept. 21 letter that HRSA “has significant initial concerns” about Lilly’s new 340B policy, continues to review the policy, “and has yet to make a final determination as to any potential action.” He said Lilly “cannot and should not” interpret HRSA’s non-response to Lilly’s request for a final answer to its question about whether its 340B price restructuring will subject the company to sanctions “as somehow endorsing Lilly’s policy.”
Novartis US President Thomas Kendris is being questioned today by the House Oversight and Reform Committee about the price it charges for its cancer drug Gleevec. A committee staff report found that Novartis raised Gleevec’s price 22 times since it was launched in 2003, and that an annual course now costs $123,000 today versus just under $25,000 in 2003—a nearly 400 percent increase. The report also concluded that the company’s internal data “undermines the pharmaceutical industry’s claims that price increases are the result of increased rebates, discounts, and other fees provided to pharmacy benefit managers.”
Kendris potentially could be questioned about Novartis’ actions related to 340B contract pharmacies. The company had originally threatened to pull discounts to covered entities that fail to register 340B ESP and supply it with the entity’s contract pharmacy claims data. Novartis also originally had given entities an Oct. 1 deadline.
The House Oversight committee also has been questioning current and former chief executives of Celgene, Bristol Myers Squibb, Teva, Amgen, and Mallinckrodt about their drug prices. Rep. Katie Porter’s (D-Calif.) questioning yesterday of former Celgene CEO Mark Alles about the company’s pricing for Revlimid and its connection with Alles’ compensation is being widely circulated in mainstream and social media.
Manufacturer Changes to 340B Are Leaving Uninsured Patients Out in the Cold
LilaRx Can Help Fill the Gap
Michael Burkhold, Chief Executive Officer, Equiscript
Recent actions by drug manufacturers are dramatically limiting patients’ access to lifesaving, low-cost 340B drugs.
Established channels for accessing discounted medications via contract pharmacies have been dismantled almost overnight with little regard to patients and safety net providers that rely on inexpensive 340B medications in order to serve their patients.
Covered entities are now in what appears to be an impossible spot at just the wrong time. Nonetheless, more drug manufacturers look to be piling on with ill-conceived restrictive policies that will immediately hurt poor, disenfranchised Americans already suffering through an unprecedented economic downturn.
How can a covered entity serve their entire uninsured patient base with only a few pharmacies?
Equiscript has a solution. LilaRx is the most comprehensive, easy to use 340B-based nationwide medication assistance program designed specifically to pass 340B savings to uninsured and low-income patients. It is a streamlined way for providers to get lifesaving medications into the hands of some of their most at-risk patients regardless of how far they live from a pharmacy.
LilaRx utilizes the national reach of our home-delivery pharmacy partners like Truepill to send patients their medication right to their homes, eliminating common barriers like lack of access to transportation.
LilaRx also acts as a bookkeeper. Covered entities can access the data they need to show exactly how the 340B program assists their most vulnerable patients and how their program is directly helping folks in their community gain access to affordable medications.
The 340B program is a critical tool for healthcare providers and must be preserved to continue providing necessary care to vulnerable populations. Watch our video to see if you think we can help your patients.
HRSA Reviewing and Determining Next Steps on Kalderos’ 340B Rebate Model
The U.S. Health Resources and Services Administration (HRSA) told 340B Report this week it is “reviewing and determining next steps” about health care technology company Kalderos’ drug discount management service to let drug manufacturers pay 340B ceiling prices as rebates instead of as discounts.
Kalderos announced the service, 340B Pay in early September. It said several manufacturers are adopting the platform but has not yet identified which ones.
Under 340B Pay, drug manufacturers would choose which drugs to pay rebates on in lieu of 340B discounts, on an NDC by NDC basis, and on which drugs to pay traditional 340B discounts. If a manufacturer opts to pay a rebate instead of a discount on a particular NDC, covered entities would have to use 340B Pay or connect their pharmacy software to Kalderos’ software to request reduced 340B pricing. Manufacturers would then use the platform to identify “noncompliant discounts,” including Medicaid, Medicare Part D, and commercial managed care rebates. After this validation process, manufacturers would “approve appropriate 340B rebate requests and authorize electronic 340B discount payments to 340B covered entities,” according to Kalderos.
Hospital group 340B Health last month asked U.S. Health and Human Services (HHS) Secretary Alex Azar either to reject a 340B rebate model or to approve one only after publishing 340B program guidance subject to notice and comment. The National Association of Community Health Centers (NACHC) last month characterized “forcing health centers to pay full sticker price for medications upfront and then deciding if and when to reimburse them for the discounts required under the statute” as a drug manufacturer attack against the 340B program.
340B Report asked HRSA for comment on reports that Kalderos and/or manufacturers that have contracted with it asked either HHS, HRSA, or both to grant a waiver to let drug manufacturers provide 340B ceiling pricing to covered entities in the form of a rebate.
“HRSA is aware of the Kalderos model and is in the process of reviewing and determining next steps,” it said.
We asked Kalderos for comment on HRSA’s statement. It said:
As we have shared publicly on numerous occasions Kalderos has communicated transparently about our model with the federal government for over 18 months, repeatedly providing updates on our model, as it was designed and tested, and HRSA has not identified any enforcement issues raised by our model.
Last month, HHS chastised drug manufacturer Eli Lilly and Co. in a letter for limiting 340B pricing on products dispensed by contract pharmacies effective Sept. 1 while HRSA was still evaluating Lilly’s price restructuring. HHS disclosed in the letter that Lilly had asked HHS for an advisory opinion on whether the agency would sanction Lilly for implementing its new 340B pricing policy. Lilly told HRSA in August that unless Lilly heard to the contrary from HRSA by Aug. 31, it would begin limiting 340B pricing on products destined for contract pharmacies starting Sept. 1. HHS told Lilly in the letter it “cannot and should not view the absence of any questions from the government as somehow endorsing Lilly’s policy.”
Drug manufacturers AstraZeneca and Sanofi today are similarly limiting 340B pricing for contract pharmacies. (See story above.)
We reached out to attorneys whose practices include 340B for reactions to HRSA’s statement about 340B rebates. We heard back from three.
“Before HRSA can take a next step, it of course is necessary to decide what steps fall within its purview,” said K&L Gates law firm partner Andrew Ruskin, who represents both health care providers and manufacturers on 340B issues. “The entire 340B world would be curious to see what HRSA interprets that to be. Also, of note is that Kalderos has not yet identified a particular manufacturer it is working with, much less a penalty that any manufacturer might seek to impose for not participating in this program. So we suspect that Kalderos may not be as high up on covered entity radars at the current moment.”
“We believe Kalderos and their partner manufacturers should refrain from implementing their proposed rebate model since it implicates significant legal and operational issues, both of which threaten the ability of safety net providers to access the 340B program pricing to which they are entitled under applicable law,” said Todd Nova, Shareholder at Hall Render law firm, who represents 340B entities. “If they implement a non-compliant model, the risk to their manufacturer partners is not insignificant under federal and other laws. More, the model is concerning in that it would result in additional burden shifting to nonprofit 340B covered entities who would be required to finance significant drug costs in a manner benefitting for-profit manufacturers and presumably Kalderos.”
“The 340B statute vests authority solely in HHS to permit drug manufacturers to offer the 340B discount as a rebate,” said Jason Reddish, Partner at Feldesman Tucker law firm, who represents health centers. “HHS clearly has not granted that permission to Kalderos or any drug manufacturers, and I think the agency will conclude that a rebate-only 340B model would make patient discount programs nearly impossible to implement, cost grantees more as they front the full sticker price of needed drugs, give manufacturers ultimate unfettered control over who gets the 340B discount and when, and throw actual acquisition cost-based Medicaid reimbursement into chaos.”
340B Hospital Group Releases Comments, Related Study on Medicare Drug Payment Cuts
The Trump administration’s proposal either to reduce Medicare drug reimbursement for 340B hospitals even further in 2021 or continue a nearly 30 percent reimbursement cut in place since 2018 “would deepen the damage done to the safety net and the millions of patients who rely on these hospitals for their care,” a hospital group told the U.S. Centers for Medicare & Medicaid Services (CMS) yesterday.
In its hospital Outpatient Prospective Payment System (OPPS) proposed rule for 2021, published Aug. 4, CMS proposed either continuing its average sales price (ASP) minus 22.5 percent Part B drug reimbursement rate for 340B hospitals, or reducing it further to an effective ASP minus 28.7 percent rate. Comments are due by 5:00 p.m. Eastern this coming Monday Oct. 5. Hospital group 340B Health submitted its comments yesterday. We will report on other 340B stakeholders’ comments as they become public.
340B Health included in its comments new research it commissioned that it says shows that:
“340B disproportionate share (DSH) hospitals deliver disproportionately more hospital services to Medicaid and low-income Medicare patients than non-340B acute care hospitals.”
“Medicaid makes up a greater share of operating revenue for 340B hospitals.”
“Operating margins for 340B DSH hospitals are significantly lower than those of non-340B hospitals, which may be reflective of their dedication of resources to serve patients with low income.”
“340B DSH hospitals are more likely to provide un-and under-reimbursed ‘essential community services,’ specialized services, and community health and wellness services than non-340B hospitals. These services are often financially unprofitable for the hospital and contribute to low operating margins.”
340B Health said CMS’s proposal “would pay less than cost in many instances, is based on a premise that has been thoroughly rebutted with published research, and is contrary to law.” It asked CMS to restore 340B hospitals’ Part B drug reimbursement rate to ASP plus 6 percent, the same as for other hospitals in the OPPS payment system.
In late July, a three-judge federal appeals court panel upheld the current reimbursement cut in a 2-1 decision. The American Hospital Association, the Association of American Medical Colleges, America’s Essential Hospitals, and three health systems this month appealed that decision to the full federal appeals court in Washington, D.C.
Trump Touts 340B Insulin Executive Order in Debate with Biden
President Trump mentioned his executive order requiring community health centers to pass along all of their 340B savings on insulin and injectable epinephrine to patients during Trump and Democratic presidential candidate Joe Biden’s debate Tuesday night.
“Insulin, it was destroying families, destroying people, the cost. I’m getting it for so cheap it’s like water, you want to know the truth. So cheap,” Trump said during the debate’s first 15 minutes.
The president also touted his executive order directing U.S. Health and Human Services (HHS) Secretary Alex Azar to test models to base Medicare Part B and D drug payments on the lowest prices paid in other developed nations. “Drug prices will be coming down 80 or 90 percent, he said.” Regarding his order letting states import lower cost drugs from Canada, Trump said, “Prescription drug prices, we’re going to allow our governors now to go to other countries to buy drugs because when they paid just a tiny fraction of what we do.”
“He sends out wishful thinking,” Biden responded. “He has executive orders that have no power. He hasn’t lowered drug costs for anybody.”
More Sponsors for Bill to Help 340B Hospitals During Pandemic, but Clock Is Winding Down
Bipartisan legislation in the U.S. House to protect hospitals from losing 340B program eligibility due to changes in patient mix during the COVID-19 pandemic gained seven more sponsors this week. Congress, however, is running out of bills to which the 340B legislation can be attached.
Reps. Doris Matsui (D-Calif.) and Chris Stewart (R-Utah) introduced H.R. 7838 on July 29. It has nine sponsors now—seven Democrats and two Republicans. Rep. Mark Green (R-Tenn.) is the newest GOP sponsor. In addition to protecting hospitals from losing 340B eligibility, H.R. 7838 would waive the group purchasing prohibition for 340B hospitals during the pandemic. In May, Matsui and Stewart got 121 House colleagues to sign a letter asking them to include the 340B hospital eligibility protection and GPO waiver in a future COVID-19 relief bill.
Comparable U.S. Senate legislation (S. 4160) limited to keeping hospitals from losing their 340B eligibility during the pandemic has 12 sponsors, including Majority Whip John Thune (R-S.D.), the Senate’s second most-senior Republican.
House Democrats and the White House are negotiating over what will go into the next COVID-19 relief bill. The latest House draft excludes H.R. 7838.
Attaching H.R. 7838 or S. 4160 to must-pass legislation to fund the government is another possibility, although unlikely. The Senate yesterday passed and sent to President Trump legislation to continue federal funding for government departments and agencies at current levels for 10 weeks. It includes language clarifying that medicines used in medication-assisted treatment for opioid addiction are subject to Medicaid drug rebates and 340B drug discounts. There will be another chance to attach H.R. 7838 or S. 4160 to another expected continuing resolution after the November election.
100+ 340B Health Care Providers and Groups Ask NY Governor to Stop Medicaid Drug Benefit Transfer
More than 100 New York State safety net health care providers and service organizations asked Gov. Andrew Cuomo (D) today not to implement legislation that his administration sought and lawmakers passed this spring that would end all 340B savings on 340B purchased drugs dispensed to Medicaid patients.
“This new policy will provide little to no benefit to the state and will devastate patients and the safety net providers they rely on for care,” the groups wrote.
Language in the state’s budget for the fiscal year that began April 1 transferred Medicaid managed care pharmacy benefits to Medicaid fee for service effective April 2021. Reimbursement for 340B purchased drugs will be actual acquisition cost plus a dispensing fee. 340B health care providers say the transfer will deprive them of millions of dollars in 340B program savings that they cannot afford to lose.
An 18-member 340B advisory group on the transfer is supposed to issue its recommendations today. The state health department said previously it wanted to submit a Medicaid state plan amendment to implement the transfer to the U.S. Centers for Medicare & Medicaid Services (CMS) in December.
In their Sept. 30 letter to Cuomo, the health care providers and social service groups said they will be supporting bills introduced in the state Assembly and Senate to delay the benefit transfer for three years.
“For some 340B hospitals, clinics, and community-based organizations as much as 70 percent of their patient population is covered by a Medicaid managed care insurance plan, with Medicare and commercial insurance comprising the rest,” the providers and groups wrote. “Because the ‘carve-out’ would move these patients’ drug benefit to FFS, the implications for FQHCs, Ryan White providers, STD clinics, and hospitals that rely on 340B savings will be dire.”
Apexus Posts 21 Updated FAQs on the 340B Patient Definition
The 340B Prime Vendor Program (PVP) yesterday posted 21 340B program FAQs about the 340B patient definition that the U.S. Health Resources and Services Administration (HRSA) recently modified. Sources say none of the FAQs are brand new.
PVP organizes the FAQs into about a dozen categories. It continually cycles through the categories and flags for HRSA the FAQs that PVP believes might need updates. September was the month for the patient definition category.
The modified FAQs address these questions:
Does STD testing satisfy the 340B Program’s health care services requirement?
Must hospitals be able to tie the use of anesthesia gases to a patient if they are purchased under the 340B Drug Pricing Program?
May 340B drugs be used for individuals who are partners of patients being treated for an STD at a 340B covered entity?
If a 340B covered entity is part of an umbrella company structure and the providers are employed by a different company under the same umbrella structure, can they still prescribe 340B drugs on behalf of the covered entity?
What is a compliant way to utilize 340B anesthesia gases in a mixed-use setting?
Are employees of a covered entity eligible to receive 340B drugs?
May providers that have admitting privileges at our 340B participating hospital be considered eligible providers under the “other arrangements” provision of patient definition?
If a 340B hospital loses its 340B eligibility, but later regains eligibility, may the hospital retrospectively place orders for replenishment of product based upon patient visits during its former eligibility period?
Under what circumstances may our 340B hospital use 340B drugs for patients served by our Accountable Care Organization (ACO) partners?
If we refer a patient to an outside clinic, can we fill their prescriptions from our 340B clinic?
Are covered entities permitted to determine inpatient vs. outpatient status?
Does the 340B discount apply to Medicaid patients?
What are elements to consider in development of a tracking system for the use of 340B drugs in a mixed-use setting?
May a hospital use 340B-priced drugs in mixed-use settings, such as a surgery department, where both inpatients and outpatients are treated? If so, what if the hospital cannot track which drugs are used for inpatients and which ones are used for outpatients?
Can 340B drugs be used for discharge prescriptions?
Is a covered entity grantee limited to using or prescribing drugs that address the services or range of services for which grant funding was received?
Are 318 grantees (STD grantees) that participate in the 340B Program permitted to purchase contraceptives and other 340B drugs for use by grantee patients?
What details are expected in a contract between a private physician and a hospital to ensure that the patients, seen by the physician “under contract with the hospital,” are 340B eligible? Must payments be involved?
When there is an individual who is an eligible patient of two different 340B covered entities, which entity should claim that individual as a patient?
Can non-Medicaid patients receive 340B drugs?
Does HRSA require a child site hospital location to register inpatient locations with observation beds on HRSA’s 340B OPAIS?
Webinar Panelists Discuss What’s in Store for 340B After “Wild” Months
The past three or four months “have been absolutely wild” in the 340B space for drug manufacturers and health care providers, and the November election plus the forthcoming U.S. Supreme Court decision on the Affordable Care Act’s constitutionality could add to the tumult, three veteran 340B observers said this week during a widely watched webinar.
RPM Report Editor Michael McCaughan and Powers Law Principal Peggy Tighe spoke on a panel about recent 340B developments during the Sept. 29 340B Webinar Series for Covered Entities and Manufacturers presented by World Congress. 340B Report Publisher and CEO Ted Slafsky moderated the panel. Nearly 700 registrants watched the discussion. (Powers Law and World Congress are 340B Report sponsors.) World Congress is presenting a follow-up webinar Dec. 2.
The conversation began with a discussion of drug manufacturers’ recent actions to cut off or restrict 340B pricing to contract pharmacies. Eli Lilly and Co. and AstraZeneca have stopped providing 340B pricing on drugs dispensed to almost all contract pharmacies, the latter just today. Sanofi today stopped 340B pricing for the contract pharmacies of entities that haven’t registered with a vendor and uploaded contract pharmacy claims data. Novartis originally planned to do the same today, but has held off. Merck likewise said it is weighing its options.
Tighe said covered entities think that manufacturers are acting unilaterally and treading on HRSA’s role administering the 340B program. They also are concerned about patient privacy and the burden of complying with companies’ requests or demands for their claims data, she said.
McCaughan said he thinks manufacturers think they are being forced to provide 340B discounts to covered entities in an uncontrolled fashion, fueled by intermediaries such as contract pharmacies. He speculated that manufacturers believe they get no credit from elected officials for the 340B discounts they pay, compared with the political credit they get for paying Medicaid rebates.
McCaughan said he thinks manufacturers made their push against 340B contract pharmacy now with the presidential and congressional elections in mind. He said pharma probably felt it was better to push 340B’s boundaries now in case a Biden administration isn’t as sympathetic to the industry.
Tighe and McCaughan both agreed that 340B covered entities and presumably the drug industry would welcome a Biden administration. The drug industry is looking for stability and believes President Trump’s actions have been erratic, said McCaughan. Tighe said a Biden administration would likely be more sympathetic to the safety net cause but that it is unclear where 340B may be on the priority list. She also pointed out the Obama administration proposed restrictions on the 340B program that were opposed by 340B providers. The proposals were never finalized. All the panelists agreed that a Democratic Congress would be welcomed by the 340B provider community although they pointed out that the program has always had a bipartisan nature.
McCaughan observed that, if Biden defeats President Trump, he likely would make addressing the COVID-19 pandemic his top health care priority. “That might give everyone breathing room to focus on a broad, unifying health goal first before getting back to fighting over the boundaries on how government programs are supposed to work.”
When asked by an audience member about aspects of 340B beyond contract pharmacy that manufacturers might target, Slafsky, Tighe and McCaughan identified the 340B patient definition, covered entity reporting requirements, and 340B’s penny pricing policy as potential areas. They agreed covered entities and manufacturers might find common ground on solutions to duplicate discounts and reductions in 340B drug reimbursement by pharmacy benefit managers and insurers.