by Lisa Scholz, PharmD, MBA, FACHE, Senior Vice President Industry Relations
June 27, 2023
Friends and colleagues, it is with a heavy heart that I author my final installment of the 340Buzz, an award-winning monthly series I’ve been writing each month since August 2017. This entire period has been such a pivotal time for our beloved safety net program. While The Craneware Group will continue to publish the 340Buzz, I’ll miss connecting with you, and there’s more to say on that below.
First, though, let’s catch up on the Buzz.
340B in Congress
A bipartisan group of six U.S. senators has formed a 340B working group and is seeking feedback on ways to “improve” the program. The group — all 340B proponents — co-signed a letter to covered entities asking for feedback on six questions ranging from contract pharmacy arrangements to HRSA oversight and ways to ensure transparency.
“We have heard concerns from some stakeholders about ambiguity in the 340B program and the need to strengthen oversight and accountability in the program,” the senators write. “We are seeking information from stakeholders on bipartisan policy solutions that would ensure the program has stability and oversight to continue to achieve its original intention of serving eligible patients.”
It’s the latest sign that Congress may be finally coming around to the idea that a legislative fix is needed to resolve some of the issues plaguing 340B. And it fits with our prediction that 2023 would be a year of hearings and requests for information on 340B in Congress. We encourage our readers to review the 340B Matters principles as you consider providing feedback.
Staying on Capitol Hill, Rep. Cathy McMorris Rogers (R-Wash.) and Sen. Mike Crapo (R-Idaho) are issuing their own RFI, asking stakeholders in this case “what role, if any, has growth in the 340B program played” in drug shortages, which were hovering around 300 in the first quarter, according to ASHP.
Implicating 340B in drug shortages has been tried before, dubiously and without success. In fact, a new study published in the Journal of the American Medical Association (JAMA) found no meaningful difference in prescribing patterns for generic and brand-name drugs between 340B and non-340B hospitals. I sense the influence of Big Pharma.
340B in the states
At the state level, lawmakers in Nevada and Connecticut have sent 340B anti-discrimination bills targeting pharmacy benefit managers and payers to their governors for signature. In Louisiana, Gov. John Bel Edwards signed an anti-discrimination bill into law that also prohibits drug manufacturers from restricting access to 340B pricing at contract pharmacies. That makes the Bayou State the second to enact such a law after Arkansas, whose law PhRMA is challenging in federal court.
In an unwelcome surprise, 340B covered entities in Minnesota are in for a slew of onerous new reporting requirements, thanks to an unnoticed, last-minute addition to an omnibus healthcare appropriations bill that Gov. Tim Walz signed in May.
The reporting requirements would start April 1, 2024. Among other information, they would require the annual reporting of the aggregated acquisition costs, reimbursements and payments made to contract pharmacies for 340B drugs, plus the total number of claims. Entities must also break this information out by payer type, while 340B hospitals will be required to report at the NDC level for the 50 most frequently dispensed drugs. The state’s Department of Health commissioner is to aggregate the information into a non-public report and make it available to select lawmakers. At this time, it’s not known who inserted the language or why. More importantly, why covered entities were not engaged.
Contract pharmacy roulette
More developments in everybody’s favorite 340B venue:
- Generic drugmaker Teva Pharmaceuticals became the 23rd manufacturer to limit 340B contract pharmacy pricing. Starting July 5, 340B hospitals with an in-house or wholly owned pharmacy will no longer be eligible for bill to/ship to orders to other contracted locations. Those without one may designate a single contracted retail pharmacy provided it is within 40 miles of the parent site and they submit claims data using 340B ESP.
- Bausch Health and Boehringer Ingelheim tightened their contract pharmacy restrictions. Both will allow only one designated pharmacy — either wholly owned or contracted retail within 40 miles of the parent site. The companies will no longer require the submission of claims data via 340B ESP — funny how that urgent priority increasingly is falling by the wayside — but entities must use the site to designate their single contracted pharmacy. Bausch’s policy is effective June 26, while Boehringer’s, which also allows the designation of a single specialty pharmacy, starts Aug. 1.
- Exelixis, fresh off slapping a 45-day lookback window on reclassifying purchases under 340B, extended its contract pharmacy limits and claims submission requirements to hospitals’ wholly owned pharmacies.
Heard it through the grapevine
Last week, I sat in on a webinar put on by 340B Report in which Vacheria Keys, director of regulatory affairs for the National Association of Community Health Centers (NACHC), explained the organization’s rationale for joining the controversial pharma-health centers alliance ASAP 340B. An attendee asked whether NACHC, which was noticeably absent from the 340B Coalition Winter Conference in February, was still a member of the coalition. Keys said it was, though she made it clear the organization would not attend the summer conference in July and was instead focusing its efforts on the 340B Grantees Conference alongside Ryan White Clinics for 340B Access. Their next conference takes place in the fall.
340B’s safety net impact
A study published in Health Affairs found that rural 340B hospitals were more likely than their non-340B peers to offer oncology services, especially the longer they had been enrolled in the program. “These findings suggest that the 340B program facilitates expanded access to oncology services in some rural communities, but opportunities remain to address disparities in the most disadvantaged service areas,” the researchers wrote.
Drug price negotiation backlash
Lawsuits targeting Medicare’s ability to negotiate drug prices, a key provision of the Inflation Reduction Act enacted last year, are sprouting like dandelions. Per Reuters, there are now four separate lawsuits against HHS from the Pharmaceutical Research and Manufacturers of American (PhRMA), the National Infusion Center Association and the Global Colon Cancer Association; separate challenges from Merck and Bristol Myers Squibb; and the U.S. Chamber of Commerce.
It's part of the opposition’s delay tactics, and it reminds me of the opposition we saw to the Affordable Care Act and the efforts over the years to undo all or parts of it. Only this time, it’s targeting a law that aims to reduce drug prices for seniors — so good luck with that.
So much still unresolved
Meanwhile, the government in a legal filing acknowledged it doesn’t know when it will replace HRSA’s 340B administrative dispute resolution process, further drawing out the Biden administration’s stated intent to replace the Trump-era ADR. Also still pending, is HHS’s proposed remedy for five years of unlawful Medicare Part B cuts, with the rumor mill suggesting it will fill the shortfall by cutting payments to non-340B hospitals. Which, if true, would likely trigger lawsuits ad nauseum. And don’t forget, two federal appeals courts have yet to issue their decisions on contract pharmacy lawsuits.
What’s next
My chapter at The Craneware Group concludes, but the wheels of 340B progress will continue. Much like a “Choose Your Own Adventure” book (my favorite was “Space Patrol”), I’ve chosen a different path for my next stop in the 340B story, and I am grateful for my past experiences and being able to connect with readers like you to bring awareness to 340B. I will continue to create synergies, awareness, and collaboration amongst the various 340B stakeholders, with the intent of protecting the 340B program.
As each of you considers your next adventure in 340B, there is much more to come—keep reading, keep finding the joy in your journey and may our paths continue to cross.