Biopharmaceutical manufacturer Genentech, South Dakota-based health system Sanford Health, and South Carolina federally qualified health center Carolina Health Centers are jointly lobbying members of Congress to back six U.S. senators’ bipartisan approach to federal 340B program reform, the three organizations confirmed late last week and yesterday.
It is a rare example in today’s divisive 340B environment of a drug manufacturer, hospital system, and health center—each influential on 340B matters—agreeing on a 340B policy initiative.
The six senators—Republicans John Thune (S.D.), Jerry Moran (Kan.), and Shelly Moore Capito (W. Va.) and Democrats Tammy Baldwin (Wis.), Debbie Stabenow (Mich.), and Ben Cardin (Md.)—asked 340B stakeholders in an open letter in mid-June to share “possible bipartisan policy solutions” addressing 340B program oversight, contract pharmacy arrangements, savings, duplicate discounts, accountability, and transparency. Friday is the deadline to respond. Although the six did not say what they will do next or when, they are expected to write a bill eventually and work to get it signed into law.
Lobbying Registration
Genentech, Sanford Health, and Carolina Health Centers’ partnership came to light in a congressional lobbying registration form signed earlier this month.
Political advocacy and consulting firm Leavitt Partners (which was founded by President George W. Bush’s Secretary of Health and Human Services Michael Leavitt) told the House and Senate it was representing a new client named 340B Working Table. The form’s second page lists Genentech, Sanford Health, and Carolina Health Centers as affiliated organizations that help fund and supervise Leavitt Partners’ lobbying activities for 340B Working Table.
Carolina Health Centers President and CEO Sue Veer said July 21 that the three partners are keeping a low profile because they want the focus to be on the senators’ work, not on themselves. Veer said all agree that any deal to address concerns about 340B must focus above all on what’s best for patients. They also agree the solution will have to benefit diverse stakeholders, she said.
Veer called the Senate leaders’ request for input from 340B stakeholders “a wonderful opportunity for stakeholder input into the future of the 340B program.”
“We believe it important to have a consensus driven, diverse stakeholder voice in protecting the value that the 340B program brings to patients,” she said.
“As a manufacturer that has participated in the 340B program since its inception, we take our obligation to ensure the program’s long-term success very seriously,” Nadine Pinell, Genentech principal manager for corporate communications, said yesterday. “We are committed to working with various stakeholders and policymakers to bring forward common-sense reforms to preserve the integrity of the 340B program and ensure it works as intended to benefit vulnerable patients and providers who care for them.”
“The 340B drug discount program plays a critical role in helping hospitals care for patients living in rural, frontier and underserved communities,” Sanford Health said yesterday in a statement. “We applaud the efforts of the bipartisan group of senators who are taking thoughtful action through [a request for information] to shape a framework for possible legislation. Legislative clarity would help to stabilize the program, ensuring safety-net hospitals can continue to provide access to high-quality care close to home. Sanford Health remains committed to engaging in meaningful solutions with diverse stakeholders on behalf of our patients, two-thirds of whom live in rural communities across America’s heartland.”
Two influential Leavitt executives are listed as lobbyists for 340B Working Table—Josh Trent and Clay Alspach. Trent was chief health counsel for House Energy & Commerce Committee Chair Greg Walden (R-Ore.). Alspach was chief health counsel for E&C Committee Chair Fred Upton (R-Mich.), who was the chair and ranking E&C Republican committee member before Walden.
Leavitt Partners did not respond to a request for comment by deadline.
The Three Partners
Genentech has a long history of involvement in 340B matters. In an October 2022 social media post, company CEO Alexander Hardy urged health care leaders to come together to reform the 340B program in the wake of a New York Times exposé about a health system’s alleged misuse of the 340B program involving a Richmond, Va., hospital. Genentech belongs to both Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Innovation Organization (BIO). To date, it has not imposed conditions on 340B pricing when covered entities use contract pharmacies.
Sanford Health is the largest health system and biggest employer in South Dakota, Senator Thune’s home state. Thune, who is second in the Senate Republican leadership structure, is highly influential on 340B matters in the chamber. Sanford Health Vice President for Pharmacy Jesse Breidenbach is a member of hospital group 340B Health’s board of directors.
Carolina Health Centers President and CEO Veer is a nationally recognized spokesperson for 340B health centers. She is secretary of the National Association of Community Health Centers board of directors.
Congressional Activity
The Senate so-called gang of six’s 340B initiative is one of several 340B-related matters now before Congress.
In May, the House E&C Committee on a near party line vote passed Republican legislation to impose reporting requirements on 340B hospitals and give the HHS secretary discretion to impose requirements on other types of covered entities.
E&C Committee Chair Cathy McMorris Rodgers (R-Wash.) said this month that the panel plans to circulate a draft drug shortage bill in the coming weeks. She and Senate Finance Committee ranking Republican Mike Crapo (Idaho) invited the public in June to address what’s driving the increase in drug shortages, including whether or not the 340B program is contributing to the problem.
E&C Committee member Doris Matsui (D-Calif.) is working on legislation to clarify that drug manufacturers must honor all 340B covered entity contract pharmacy arrangements.
The Senate Finance Committee is expected to vote tomorrow on pharmacy benefit manager reform legislation that would require state contracts with Medicaid managed care organizations to reimburse drugs at ingredient cost plus a dispensing fee. Chair Ron Wyden (D-Ore.) and ranking Republican Crapo’s draft bill says if a drug is “furnished by” a 340B covered entity, payment can exceed acquisition cost if the 340B entity annually reports to HHS how much it got above its 340B acquisition costs.
HHS would have to publish the reports in an electronic and searchable format under a bill with comparable language that the E&C Committee bill passed in May but not under Wyden and Crapo’s draft bill.
