copies of Worcester Business Journal online article and Infusion Access Foundation letter
Infusion Access Foundation's state level 340B outreach includes appeals to Massachusetts' attorney general last month (left) and California's last November (right).

Non-Hospital Infusion Centers See a Path to 340B Reform that Runs Through the States

A foundation linked to a trade group that represents non-hospital infusion centers is working to enlist state attorneys general and legislators to push for major 340B program changes at the federal level.

The National Infusion Center Association (NICA) is the trade association, and the Infusion Access Foundation (IAF) is its affiliated patient advocacy group. Both get funding from drug manufacturers. NICA says it represents “infusion enterprises that operate thousands of infusion centers nationwide.”

“We want to be able to assure the vulnerable patient populations relying on the 340B program that the program is in fact functioning as intended in supporting access to the care they need,” said Brian Nyquist, who is both IAF executive director and president and CEO of NICA. “As the program stands and operates today, Congress cannot provide those assurances.”

Last year IAF began encouraging patients who get infusions and others to ask their state attorneys general and state legislators “to bring more transparency” to the 340B program, especially to hospital participation in 340B. IAF continues to promote the outreach campaign on social media.

Also last year, Nyquist sent letters raising questions about hospitals’ use of 340B discounts to the attorneys general of California, Florida, Massachusetts, Michigan, and Ohio. Last month, Nyquist wrote an op-ed for a Massachusetts newspaper saying, “It’s time Massachusetts Attorney General Maura Healey and other elected leaders take notice and bring transparency and accountability” to 340B.

IAF has a page on its website listing state legislation it opposes. All nine bills it lists would benefit 340B covered entities broadly, not just 340B hospitals, by prohibiting pharmacy benefit manager discrimination against entities and/or prohibiting drug manufacturers from imposing conditions on 340B pricing when entities use contract pharmacies.

Frustration with Federal Inertia

Nyquist indicated in a recent interview that IAF’s state-level 340B advocacy arose out of frustration with inaction at the federal level.

“We’ve tried to push this at the federal level,” he said. “Any time we gained traction, a 340B DSH [disproportionate share] hospital would get on the phone and call its legislators to remind them that they are a major employer. They are major contributors to political campaigns. Whatever momentum we built went away. We haven’t been able to get Congress to come together and get something across the finish line—even just basic reporting measures for more transparency in the program.”

Nyquist said the inertia made them think, “What if we start building state pressure to at least investigate if these reports of abuse are invalid or valid?”

Nyquist said if IAF’s state-level advocacy succeeds and prompts federal action, he hopes Congress will address transparency, the 340B patient definition and hospitals’ acquisitions of infusion service sites.   Nyquist and his organization contend that these purchases drive up patient costs, and that hospitals are opening infusion sites in rich communities where many commercially insured patients reside.  

340B hospitals argue that they serve all patients regardless of ability to pay and provide much higher levels of uncompensated care than private infusion centers.  Hospitals also point out that they serve a much more diverse and poorer patient population.

Unorthodox Strategy

IAF’s focus on state attorneys general sets it apart strategically. Other critics of 340B hospitals have aimed their state-level advocacy mainly at legislatures and insurance commissions.

The most recent big splash state attorneys general made in the 340B arena was in December 2020, and it came on the side of 340B covered entities. Twenty-nine attorneys general asked then-U.S. Health and Human Services (HHS) Secretary Alex Azar to address drug manufacturers’ conditions 340B pricing when covered entities use contract pharmacies. Azar’s successor at HHS, Xavier Becerra, is California’s former attorney general. He was one of the four state AGs who organized the outreach to Azar.

Vermont Attorney General T.J. Donovan (D) was one of the signers. He has issued subpoenas to four drug makers—AstraZeneca, Lilly, Novartis, and Sanofi— related to their conditions on 340B ceiling prices when covered entities use contract pharmacies.

Thirteen drug manufacturers are NICA corporate partners. Eight impose such conditions— Amgen, Boehringer Ingelheim, Bristol Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Lilly Novartis, and UCB. Lilly, Johnson & Johnson, and Novartis are among IAF’s five corporate sponsors.

IAF’s November 2021 letter to California Attorney General Rob Bonta (D), Becerra’s successor, said there is evidence “that some facilities are using the 340B program to increase their profits rather than to help those patients in need.”

It cited drug-industry-led group AIR 340B’s 2016 finding that “only 24% of 340B hospitals provide 80% of the total charity care that all 340B hospitals and clinics provide” and for-profit cancer clinic group Community Oncology Alliance’s (COA) 2021 finding that “a significant number of qualifying 340B hospitals overcharge uninsured patients for prescription drugs.” AIR 340B and COA are long-time critics of 340B hospitals. IAF is an AIR 340B member.

“Absent any legal or regulatory obligation to pass savings on to patients, 340B-eligible hospitals and clinics are gaming the program and further deepening health inequities that persist in California,” Nyquist told Bonta. “This program mismanagement should concern patients, policymakers, and all California taxpayers.”

Nyquist told Bonta that he said he understood that more than 6,300 Californians had called on the state attorney general “to bring greater transparency to the 340B program to ensure it is working for patients.”

“We urge you to answer your constituents’ call to action,” Nyquist said. “Without proper accountability, Californians already suffering health care discrimination and barriers to care will continue to be left behind.”

In his op-ed last month for Massachusetts newspaper Woburn Business Journal, Nyquist widened his criticism beyond “bad actor hospitals” to “clinics, pharmacy benefit managers, and health insurers [that] take advantage of the program.”

“Is 340B actually providing affordable access to necessary treatments, or is it allowing those eligible hospitals to pocket those drug discounts?” Nyquist asked. “The data reveals this safety net is failing patients in Massachusetts.”

“Today, no serious legal or regulatory oversight exists to require hospitals and clinics to pass savings on to patients or report transparently on those efforts,” he continued. “The work to improve 340B begins with pulling back the curtain on how exactly participating hospitals in Massachusetts are passing their 340B savings to their patients. Absent any transparency or reporting requirements, the 340B program will continue to put profit over people.”

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