Pharmaceutical Research and Manufacturers of America, the National Association of Community Health Centers, and the National Hispanic Medical Association this morning jointly issued a 10-point plan and created a nonprofit group to ensure that the 340B program “benefits patients and true safety-net providers, including rural hospitals.”
The three groups are expected to publicize their collaboration today in ads on Politico.com and in Politico’s email newsletters. Politico is widely read by federal policymakers and advocacy groups. The groups late yesterday afternoon gave 340B Report advance copies of their joint news release and their 10 core principles to influence federal 340B legislation.
“What under-served and at-risk communities need today are solutions,” said NACHC Interim President and CEO Rachel Gonzales-Hanson. “It’s in the name of these communities that we have put aside differences and come together to improve the 340B program. This unlikely alliance reinforces the urgency for action.”
“This partnership marks a historic, united step toward improving the 340B program, and we encourage policymakers and other stakeholders to join us,” said PhRMA President and CEO Stephen Ubl.
PhRMA and NACHC’s decision to work together on 340B is historic and explosive. The brand drug industry and the 340B provider community have a cold relationship. 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.
That NACHC decided to work with PhRMA speaks to the depth of health centers’ concern about 340B revenue losses, individuals close to the situation say. They said it signals health centers’ exasperation with hospitals’ foot dragging about 340B legislation. NACHC, several health center stakeholders said, stopped waiting for hospitals to act and took 340B matters into its own hands.
Members of hospital group 340B Health said yesterday it alerted them that PhRMA and NACHC were working together on changes that could cause some hospitals to lose 340B eligibility. The group reportedly said it is working to ensure that lawmakers understand how reducing 340B discounts would affect hospitals and their patients. 340B Health, members said, mentioned possible signficant contract pharmacy restrictions including in the speciality pharmacy and mail order area, possible patient definition changes, possible changes affecting referrals and telehealth, and possible mandatory discounts to patients based on a sliding fee scale.
No Unanimity from Drug Manufacturers on Détente
Some drug manufacturers reportedly question the détente between PhRMA and NACHC. Twenty-one manufacturers have imposed conditions on 340B contract pharmacy arrangements. None of the federal district and appeals courts that have considered these policies have allowed the federal government to penalize the drug manufacturers and prohibit the restrictions. While some of the lower courts ruled largely in favor of the government, none of the courts gave the U.S. Health Resources and Services Administration permission to begin enforcement actions and all of the cases were sent back to the agency. The U.S. Third Circuit Court of Appeals ruled in favor of the drug manufacturers in late January and two more decisions are pending at the appellate level. Some manufacturers reportedly question whether their industry needs to concede anything about 340B to health care providers.
NHMA, the least well known among 340B stakeholders of the three groups making today’s announcement, represents 50,000 licensed Hispanic physicians in the United States.
NHMA’s affiliate, the National Hispanic Health Foundation, has received financial contributions from PhRMA. On its website NHMA lists PhRMA plus drug makers Moderna, Johnson & Johnson, Lilly, Pfizer, Amgen, Sanofi, AstraZeneca, and NovoNordisk as past partners. It is a member of AIR 340B, a drug industry-led coalition of health care and social welfare groups that backs drug industry positions on 340B.
NACHC is holding its annual Policy & Issues Forum in Washington, D.C., this week, and today is its annual congressional lobbying day. During their House and Senate office visits, NACHC members are leaving behind a 340B two-pager—a condensed version of the longer 340B reform document issued today.
PhRMA, NACHC, and NHMA’s new group is named Alliance to Save America’s 340B Program—ASAP 340B.
“Community Health Centers and other safety-net providers are critical to the advancement of health equity,” the news release announcing ASAP 340B’s establishment says. “The 340B program was created to help support these safety-net providers. Some entities that participate in the program, such as large, well-resourced hospitals, have taken advantage of the program’s current lack of clarity at the expense of the patients.”
“Hospitals participating in the 340B program are not required to provide patients a discount on their medicines,” the news release continues. “At the same time, many of these same hospitals often engage in practices—such as surprise billing and predatory debt collection—that hurt vulnerable patients and create significant burdens to them accessing care. It’s time for all of us to stand up for the true intent and purpose of the 340B program.”
ASAP 340B’s website went live either late last night or early this morning. It lists these partner groups in addition to PhRMA, NACHC, and NHMA:
- Autoimmune Association
- Association of Asian Pacific Community Health Organizations
- Black, Gifted, and Whole
- Community Oncology Alliance
- Health Choice Network
- National Consumers League
- The National Grange
Community Oncology Alliance and the Grange also are AIR 340B members.
The 10 point plan to guide 340B reform was issued in ASAP 340B’s name. It says:
Make 340B a true safety-net program for patients. “The 340B program is intended to help support safety-net providers serving low-income and vulnerable patients. The program should be structured to enable true safety-net providers to help low-income and other vulnerable patients access more affordable medicines and health care services.”
Ensure 340B prescriptions are offered to patients at a discount. “Covered entities in the 340B program should increase access to affordable medicines for the patients that need help the most. Hospitals participating in the program should have a sliding fee scale for medicines that, at a minimum, applies to uninsured patients and patients with incomes under 200% of the federal poverty level with private insurance. Grantees should provide support for access to medicines that is consistent with the scope of their grant that qualifies them for the 340B program and at least as generous as any sliding fee scale requirements for other medical care.”
Update the 340B patient definition with strong safeguards. “The current definition of a ‘patient’ of a covered entity, which determines whether a prescription is eligible for a 340B discount, is overly broad and needs to be updated to protect the integrity of the program and ensure it is serving vulnerable populations. The definition also needs strong safeguards and objective standards. For example, to be considered a ‘patient’ of a covered entity, an individual should be required to have periodic in-person visits with a provider employed or contracted by the covered entity and the covered entity should be required to maintain a consistent responsibility for care of such individual. Additionally, prescription eligibility for a 340B discount should reflect a direct connection between the patient’s medical condition and the services being provided or managed (through permitted referrals) by the covered entity.”
Establish clear criteria for 340B contract pharmacy arrangements to improve access. “As part of broader 340B program changes described here, contract pharmacy arrangements, which are not currently binding on manufacturers, should be permitted for: 1) covered entities located in a medically underserved area or an area serving a medically underserved population, or 2) grantees providing care to a specific population, such as patients with HIV or chronic illness, for qualified prescriptions provided within the scope of the grantee’s 340B-qualifying Department of Health and Human Services (HHS) grant. In general, contract pharmacies also should be located near the covered entity, should have to provide the same patient affordability assistance for 340B prescriptions that is provided at the covered entity, and should be required, as a condition of program participation, to take certain steps to prevent diversion and duplicate discounts.”
Prevent middlemen and for-profit entities from profiting off the 340B program. “The savings generated from the 340B program are intended to support safety-net providers and vulnerable patients and should not be diverted for private benefit or other purposes not closely tied to a covered entity’s safety-net mission. Protections are needed to prevent for-profit companies, like pharmacy benefit managers, from siphoning off 340B savings intended to help patients by reducing reimbursement for 340B-qualifying prescriptions. Additionally, fees that pharmacies and other for-profit third parties charge for 340B-related services should be limited to ensure covered entities and the patients they serve receive most of the savings associated with the program.”
Update and strengthen 340B hospital eligibility requirements. “Critical to improving the 340B program is the creation of additional accountability requirements to ensure eligible hospitals are supporting underserved communities as true safety-net providers. 340B hospitals should have policies that increase access to affordable health services, and their participation in the 340B program should be conditioned on them not engaging in aggressive debt collection practices that penalize the most at risk communities. New hospital eligibility criteria should be added to existing requirements to ensure the program is supporting true safety-net hospitals, including quantitative metrics that appropriately identify hospitals treating a disproportionately large share of low-income patients on an outpatient basis. Current eligibility requirements should be maintained for rural hospitals, specifically critical access hospitals and sole community hospitals, and eligibility should be updated so critical access hospitals that convert to the new rural emergency hospital designation do not lose 340B eligibility.”
Address standards for 340B child sites and subgrantee eligibility. “Hospitals’ use of lax 340B program guidance to expand to offsite clinics, known as child sites, requires reform and government oversight. Strong eligibility standards for these child sites are needed that include provisions to prevent abuse of the program’s intent. For example, each child site should be required to meet the same or analogous eligibility criteria as the 340B hospital it is associated with, comply with standards to ensure it is an integral part of the hospital, and have the same sliding fee scale requirement to ensure the program is reaching the intended populations. Additionally, child sites should be required to provide a meaningful range of clinically relevant services beyond dispensing, infusing or otherwise providing prescriptions. Similarly, the eligibility criteria for subgrantees should be revisited to ensure they are accomplishing their intended purpose.”
Create a neutral 340B claims data clearinghouse. “To facilitate verification of 340B claim eligibility, the 340B program needs a neutral, independent clearinghouse capable of receiving Medicare, Medicaid, and commercial claims data. Establishing a national clearinghouse will strengthen program integrity and create transparency for manufacturers to monitor compliance. This neutral clearinghouse is a step toward building accountability and coordination for covered entities without increasing administrative burdens for safety-net providers. Data provided to a clearinghouse would be deidentified and subject to safeguards that prohibit use for marketing or other unauthorized purposes.”
Facilitate public reporting on 340B program data. “In general, covered entities should be required to report to HHS basic information about their involvement in the 340B program, including the total acquisition cost and reimbursement for 340B discounted medicines and the total amount spent to reduce out-of-pocket costs for patients receiving 340B discounted medicines. The state or local government contracts that are the basis for certain private non-profit hospitals’ program eligibility should also be publicly available.”
Establish enforceable rules and enhance federal administration and oversight of the 340B program. “Targeted rulemaking authority should be granted to the relevant HHS agencies to the extent needed to implement specific legislative provisions. Additional and improved program integrity measures to help enforce program requirements and legislative reforms should be included. The 340B program is governed exclusively by federal law. The provisions of the 340B statute, and the regulations issued thereunder, shall supersede any state or local law, regulation or other provision relating to or that could otherwise affect the 340B program.”