A Bipartisan Bill Will Be Introduced in the U.S. House Soon to Protect 340B Hospitals During the Pandemic
Your 340B Report for Wednesday July 22, 2020
Editor’s note: Please be sure to read this issue’s sponsored content article from Comprehensive Pharmacy Services. The ability to publish sponsored content is one of the many benefits of becoming a 340B Report sponsor. Click on the button below to learn more. Our next regularly scheduled issue will be Tuesday July 28. Between now and then, we will keep you informed of any breaking news.
U.S. Reps. Doris Matsui (D-Calif.) and Chris Stewart (R-Utah) will soon introduce bipartisan legislation to protect hospitals from losing their 340B eligibility due to changes in patient mix during the COVID-19 public health emergency. It also will temporarily waive the 340B statutory prohibition on hospital purchases of covered outpatient drugs through group purchasing organizations (GPOs).
A Bipartisan Bill Will Be Introduced in the U.S. House Soon to Protect 340B Hospitals During the Pandemic
U.S. Rep. Doris Matsui (D-Calif.) told 340B Coalition Conference attendees this afternoon that she and Rep. Chris Stewart (R-Utah) are finalizing and preparing to introduce bipartisan legislation to provide temporary 340B program requirement flexibilities to hospitals during the COVID-19 pandemic.
340B Report has learned that the bill will not only protect hospitals from losing their 340B eligibility due to changes in patient mix during the public emergency, it also will temporarily waive the 340B statutory prohibition on hospital purchases of covered outpatient drugs through group purchasing organizations (GPOs). The bill is unlikely to be introduced today but will be introduced shortly. Matsui will be the lead sponsor and Stewart the original co-sponsor.
S. 4160, similar legislation sponsored by Sens. John Thune (R-S.D.), Debbie Stabenow (D-Mich.), Bob Portman (R-Ohio), Tammy Baldwin (D-Wis.) Shelley Moore Capito (R-W.Va.), and Benjamin Cardin (D-Md.), does not include the waiver of the 340B hospital GPO prohibition.
In May, Matsui and Stewart persuaded 121 fellow representatives to sign a letter to House and Senate party leaders advocating the two 340B program flexibilities that their bill will address. They pressed, without success, to get the flexibilities included in the House’s most recent COVID-19 relief legislation, the HEROES Act. House and Senate leaders and the White House currently are negotiating over what should be included in a pandemic relief bill that all would like to see passed before July ends.
“In collaboration with our Senate colleagues, your support, and the urgency of these issues, I believe we are well positioned to see this bill through the legislative process,” Matsui said in her remarks during the 340B event.
Stewart told conference attendees that the COVID-19 pandemic “has caused the possibility that many will not be eligible” for 340B drug discounts. “We understand that that’s a dire threat, and we’re going to help and do everything we can to make sure you maintain your eligibility. This is a bipartisan issue, it’s bicameral, it has support from almost everywhere….This is common sense. It’s not your fault or mismanagement that caused this, it’s the pandemic and the effects from that. We’ll do everything we can to help you.”
Matsui and Stewart were unscheduled speakers at the conference. They preceded U.S. Health Resources and Services Administration (HRSA) Administrator Thomas Engels, who spoke mainly about HRSA’s leadership role within the Health and Human Services (HHS) Department on managing and disbursing COVID-19 relief to health care providers.
Regarding 340B, Engels said:
In the 340B Program, we understood early how the circumstances surrounding this public health emergency warranted additional flexibilities, especially to affected 340B covered entities. Our goal has been to collaborate with stakeholders to the fullest extent possible during this pandemic. Adm. Krista Pedley provided details about these efforts during her remarks yesterday.
All of you are here because you share an interest in a program that helps provide affordable medicines to safety-net providers that care for some of the most vulnerable patients in our country’s healthcare system.
In particular, I want to recognize the work of safety net hospitals, critical access hospitals, community health centers, and other specialty providers that serve underprivileged populations. Through a combination of public support and private generosity, America has a strong network of high quality providers that serve vulnerable populations, and many of you play a vital role in that network. So for that, I want to say thank you.
Understanding HRSA Regulation Changes, Maximizing 340B Savings and Achieving Compliance In The Era of COVID-19
The recent COVID-19 pandemic revealed to many hospitals and health systems the need to streamline their operations and improve their bottom-line performance. Across the country, many facilities that were on uncertain footing before the crisis had their futures placed in jeopardy. Pharmacies in these facilities often found themselves in trouble. The impact of operational or financial shortcomings they had put off addressing became more pronounced as these pharmacies suffered from spikes in patient volume and staffing shortages. The consequences borne from the pandemic were unheard of weeks before. Many hospitals and health systems quickly found themselves less certain of their future.
Click here for a complimentary paper from Comprehensive Pharmacy Services that explores the uncertainties—and opportunities—of these historic times for hospitals and health systems that participate in the 340B program. In the paper, we describe and explain:
HRSA’s immediate registration and enrollment flexibilities during the pandemic
HRSA permanent change permitting the use of 340B drugs at new outpatient facilities located off-site from their parent location before that facility is listed as a reimbursable, outpatient cost center on the entity’s Medicare Cost Report
HRSA’s permanent change regarding the use of telemedicine in 340B
TRANSPARENCY IN COMMUNICATION
As inboxes continue to grow with correspondence from many 340B resources, our clients can reach out to the 340B Solutions team to decipher what is pertinent to their program. We help confidently direct them through all pandemic related HRSA regulation changes, including those related to clinic and patient eligibility.
Our 340B Solutions team takes pride in staying current with all aspects of the 340B program. After careful consideration and thorough research of events relevant to our client facilities, we notify our clients of program updates and how changes—such as those related to HRSA—may affect their entity. During and after the COVID-19 pandemic, we are uniquely positioned to provide 340B leadership to address HRSA challenges.
THE 340B SOLUTIONS – EXPERTISE IN 340B LEADERSHIP AND CONSULTING
Our 340B Solutions team fuels pharmacy excellence for hospitals and health systems by providing access to resources that make the waters in times of crisis, such as during the COVID-19 pandemic, easier to navigate. Our unrivaled expertise and powerful analytics capabilities yield numerous benefits for client facilities, including improved operational performance, improved patient outcomes and lowered drug costs.
With a deep bench of nationally recognized experts in pharmacy regulations compliance, we are uniquely qualified to operate “best in class” 340B programs through leaders owning 150+ years of combined pharmacist experience and 70+ years of combined 340B experience.
All of our pharmacists have been DOPs responsible for the administrative and oversight functions of the program.
All of our consultants are pharmacists with DOP experience in entities with 340B programs.
All of our analysts are Certified Pharmacy Technicians with experience in 340B program oversight and/or 340B purchasing.
All of our consultants and analysts have either completed or are in the process of completing the ACE 340B certification program.
Our team of leading pharmacy consultants provides assessments and compliance for numerous programs, including 340B, USP <797> & <800>, clinical initiative identification, operational analysis, purchasing support, staffing assessments, medication safety, interim hospital leadership, medication safety programs, antimicrobial stewardship programs and more.
No two healthcare facilities are alike. While uncertainty impacts each hospital or health system differently, crafting a sound 340B program during times of normalcy allows for facilities to reap its operational and financial rewards when times are lean. Maintaining awareness to changes in HRSA regulations allows for programs to run better, thereby creating opportunities to maximize savings, even when times are lean.
No matter what the challenge, our team of 340B experts can help your pharmacy achieve excellence – as we do for hundreds of clients across the country each day.
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PhRMA and BIO Wary of CMS Value-Based Purchasing Rule’s Potential Impact on 340B
(Update, July 23: Since this story was published, many more comments on CMS’s proposed rule have been posted on the federal government’s new regulations portal, beta.Regulations.gov, including comments from groups representing 340B providers. We will report on those comments in an upcoming issue.)
The leading drug manufacturing and biotechnology trade associations say they need more time to evaluate and submit comments on a U.S. Center for Medicare & Medicaid Services (CMS) proposed rule that could have repercussions for the calculation of 340B ceiling prices. Drug manufacturers are concerned that the proposal could undermine patient assistance co-pay programs and also force them to provide higher discounts to 340B and Medicaid rebate programs.
Monday was the end of a 30-day comment period on CMS’s proposal, published June 19, to support value-based purchasing (VBP) for Medicaid covered outpatient drugs, and other purposes. As we reported last month, among other changes, CMS wants to let manufacturers report multiple best prices for a drug for Medicaid drug rebate purposes if the prices are tied to a VBP arrangement. Although the proposed rule doesn’t mention the 340B program, changes in manufacturer best price and average manufacturer price reporting could have spillover effects on the calculation of 340B ceiling prices.
In comments submitted July 20, both Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Innovation Organization (BIO) said CMS’s 30-day comment period did not give them adequate time to prepare comments. They both requested a 30-day extension of the comment period. The Association for Community Affiliated Plans, which represents 77 nonprofit safety-net health plans, also asked for 30-day extension. No organizations representing 340B covered entities submitted comments.
PhRMA told CMS it failed to consider the proposed rule’s potential “far-reaching impacts” on the Medicaid drug rebate and 340B drug discount programs, including CMS’s proposal to require manufacturers to include patient co-pay assistance in the calculation of a drug’s average manufacturer price. CMS said in the proposed rule that some health plans, at the instruction or urging of pharmacy benefit managers, apply patient co-pay assistance to the benefit of the plan, not to the patient, and that manufacturers then exclude these payments from their calculation of best price.
PhRMA said including such patient assistance in best price and AMP calculations, as CMS wants manufacturers to do, would affect the 340B ceiling price and reduce the ordinary Medicare Part B payment rate (average sales price plus 6 percent). In past rulemaking affecting AMP and best price, CMS has considered potential effects on the 340B ceiling price and Medicare Part B payments rates, PhRMA said. Its failure to do so this time could make this rule susceptible to claims it is arbitrary and capricious, it said.
“PhRMA urges CMS to recognize that it lacks statutory authority to finalize this ill-advised proposal and not to finalize the proposal,” the group said.
BIO said that, given the proposed rule’s impact on best price, “additional guidance will be necessary, through coordination with [the U.S. Health Resources and Services Administration] HRSA, in order to address the impact on the 340B Drug Pricing Program.”
BIO said “key questions need to be addressed regarding how ceiling prices should be calculated under VBP arrangements…. Manufacturers and covered entities alike will need updated guidance on how to handle Best Price revisions in the context of updates to 340B ceiling pricing in order to permit robust adoption of these programs while also allowing for compliance with other programmatic requirements.”
West Health Policy Center's Director of Health Policy Sean Dickson told Modern Healthcare if CMS' rule causes copay coupons to be counted toward Medicaid discounts, the implication would likely be much more significant for the 340B drug discount program, as the affected discounts would be averaged with other sales for Medicare Part B payments, the news organization reported.
The vast majority of the 119 comments submitted to CMS appeared to emanate from a script hosted on the Chronic Care Policy Alliance (CCPA) website. These commenters argued: the CMS rule would require manufacturers to guarantee that all patient cost-sharing assistance gets passed along to patients; that this would be impossible for manufacturers to guarantee; and as a result, manufacturers would discontinue providing cost-sharing assistance.
CCPA is a project of the California Chronic Care Coalition (CCCC), which in turn is a client of Perry Communications, a California-based public relations company whose clientele includes PhRMA and a number of large drug manufacturers. CCPA’s federal policies include “efforts to modernize the 340B program and curb abuses so it can continue to serve uninsured and indigent populations.” On its Facebook page, CCCC has reposted infographics from the drug-industry-group AIR 340B that suggest the 340B program favors hospitals over patients. In 2018, CCCC tweeted in support of the 340B PAUSE Act, legislation in the last session of Congress that would have halted enrollment of disproportionate share hospitals in 340B and required hospitals report their 340B drug acquisition costs and their reimbursements from payers for 340B drugs.
More Federal Relief on its Way to Hospitals in COVID-19 Hot Spots
The U.S. Health and Human Services Department (HHS) this week will begin distributing a $10 billion second round of COVID-19 relief to hospitals in high-impact areas. HHS distributed $12 billion in relief to about 400 hospitals in May.
The American Hospital Association thanked HHS for the aid, but noted that this new distribution of CARES Act funding “does not take into account the latest spike in cases and hospitalizations in some parts of the country.”
“We look forward to working with the administration to ensure that additional relief will be distributed to “hot spots” and all hospitals,” AHA said. The group this week reported that, without more government support, hospital margins “could sink to -7% in the second half of 2020…with half of all hospitals operating in the red.” AHA estimates that U.S. hospitals and health systems have lost at least $323.1 billion so far this year, due in large part to lower patient volumes.
Controversy Over HHS Second-in-Command’s Spouse Lobbying Has 340B Implications
The spouse of U.S. Health and Human Services (HHS) Deputy Secretary Eric Hargan has been lobbying HHS on behalf of health care clients for about a month, news organization STAT reports.
Eric Hargan is second in command to HHS Secretary Alex Azar. STAT said recent lobbying disclosures required under federal law show that Emily Hargan has represented Nostrum Pharmaceuticals, the blood glucose monitor company Smart Meter, and TL Management, which runs a chain of nursing homes, before HHS. STAT said an HHS spokesperson told it Eric Hargan has recused himself from all matters on which his wife has lobbied.
STAT said Emily Hargan “directly lobbied officials at the Centers for Medicare and Medicaid Services and HHS, for example, to reconsider a highly complex calculation for nitrofurantoin, a generic antibiotic that Nostrum Pharmaceuticals manufactures. The calculation plays a central role in determining how much Nostrum owes the federal government in Medicaid rebates.”
“The company has some familiarity with controversy over that product—it made headlines in 2018 for jacking up the price of the same product by 400%,” STAT said.