About a dozen people who advise, help run, or work at 340B covered entities are launching a nonprofit group, 340B Truth, to try to hammer out a covered entity consensus position on 340B reform and urge Congress to pass it swiftly.
The group began posting on the career networking site LinkedIn last week. An organizer, who requested anonymity, said Friday that it has asked the Internal Revenue Service to recognize it as a tax-exempt 501(c)(4) social welfare organization. 340B Truth is not disclosing who its members are while the application is pending, the organizer said. Donations to 501(c)(4) groups are not tax-deductible but the groups can lobby Congress and federal agencies.
340B Truth was launched partly in response to divisions among entities over the National Association of Community Health Centers’ 340B reform partnership with Pharmaceutical Research and Manufacturers of America, the organizer said. Another catalyst was the “gloom and doom” at the end of the recent 340B Coalition annual winter conference, the organizer said. “A lot of people left feeling that they did not have a good perspective on what the future held … and what might be taking place to safeguard covered entities,” the organizer said. “People were starting to feel like they were treading water and running out of energy.”
“Legislative Route is the Way to Go”
There is frustration about “how slow things have been going” through the federal courts regarding the 340B contract pharmacy impasse, the organizer said. “It has been almost two and a half years now without legal resolution coming anytime soon. We feel the legislative route is the way to go at this point.”
Most national groups that represent 340B providers back the recently reintroduced bipartisan U.S. House bill to protect 340B covered entities and contract pharmacies from discrimination by insurers and pharmacy benefit managers. Groups are split, though, on whether Congress should act now to end drug manufacturer denials of 340B pricing when entities use multiple contract pharmacies or wait until after the federal courts have had their final say—something that could be years away.
Hospital groups resist opening the 340B statute because they believe doing so could be harmful to hospitals. NACHC said it partnered with PhRMA on 340B reform out of exasperation with hospitals’ lack of urgency about 340B contract pharmacy legislation. NACHC says it told hospital groups, to no avail, that its members need immediate relief from manufacturers’ limits on 340B pricing in the contract pharmacy setting.
NACHC’s deal with PhRMA would be brutal for 340B disproportionate share hospitals. About half would lose 340B eligibility and the ones left would lose significant access to 340B pricing. Six national hospital groups, the American Society of Health-System Pharmacists, Ryan White Clinics for 340B Access, AIDS Health Care Foundation, and the leader of Hemophilia Alliance have denounced NACHC and PhRMA’s 10-point agenda publicly. Many 340B covered entity representatives say privately it is too harsh toward hospitals.
There are signs that a deal in Congress on bipartisan legislation to ease drug company conditions on 340B contract pharmacy may hinge on inclusion of reporting requirements for 340B hospitals. Last week, 340B Truth invited its readers on LinkedIn to share their thoughts on transparency. It posted a short document from “a seasoned hospital CFO as to his thoughts on transparency regarding 340B.” The executive said they believe “most definitely” that other hospital CFOs would be comfortable reporting their hospital’s 340B savings, their charity care and bad debt, and their uses of 340B savings to benefit patients. The CFO’s proposed calculation of 340B savings, however, excluded revenue from billing for 340B drugs above acquisition cost.
“One of the biggest things we’re looking at right now is transparency concerns,” the 340B Truth organizer said. “We want to see what [entities] are comfortable with sharing in a way that isn’t incredibly burdensome.” The group also is seeking consensus on how best to report how entities use their savings to benefit patients. “We want to make sure that when we’re showing things like income above [drug acquisition cost] or additional savings through contract pharmacies that [decisionmakers and the public] understand the programs that those are supporting.”
The organizer said 340B Truth has reached out national groups that represent 340B providers and has “had some communications with” House Energy & Commerce Committee Democrats and Republicans.
“We want to get as much input as we can” from entities, the organizer said. “But we want to do this quickly because this has dragged on for so long. We’re seeing entities have to shut their doors or cut off service lines.”