HIV/AIDS Activists March To Protest AstraZeneca’s 340B Contract Pharmacy Cutbacks

Your 340B Report for Thursday Oct. 15, 2020

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Protesters organized by AIDS Healthcare Foundation (AHF) rally outside AstraZeneca in Wilmington, Del., on Wednesday, Oct. 14, 2020. | SOURCE: Steve Ruark/AP Images for AIDS Healthcare Foundation

HIV/AIDS Activists March To Protest AstraZeneca’s 340B Contract Pharmacy Cutbacks

Activists aligned with the powerful grassroots group AIDS Healthcare Foundation (AHF) marched yesterday in front of drug manufacturer AstraZeneca’s Wilmington, Del., headquarters building to protest the company’s decision effective Oct. 1 to stop offering 340B pricing on all of its drugs shipped to contract pharmacies, and to let covered entities lacking an in-house pharmacy designate just one contract pharmacy for AstraZeneca 340B-priced drug shipments.

“AstraZeneca has launched an assault on a federal drug discount program essential to the safety net of our nation’s health care,” AHF Director of Advocacy John Hassell told 340B Report. “They are messing with the numerous health care centers and hospitals on the front-lines of the COVID-19 pandemic, and denying discount drugs to these facilities, required by law, just to increase their profits. Why can’t AstraZeneca put people over profits?”

AHF is a member of Ryan White Clinics for 340B Access (RWC-340B), the organization that sued the U.S. Health and Human Services Department (HHS) last Friday to force the government to take action against drug manufacturers that have blocked or threatened to block 340B pricing at contract pharmacies.


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Filling a Unique Space in the 340B Market

Jim Donnelly, President, Hudson Headwaters 340B

Over the last several months the 340B program has faced several challenges from various stakeholders. No matter where the pressure comes from, it impacts the participating covered entity. With a pandemic already stretching resources thin, we at Hudson Headwaters 340B are seeing many health organizations struggling to meet the ever-changing environment within the 340B world.

For those of us who have been participating in the 340B program for years, we have seen many program challenges. For each challenge faced we have always immerged stronger and more prepared for the future with a keener focus on program integrity and continuous improvement of compliance efforts.

Hudson Headwaters 340B is a different kind of third-party administrator and consulting firm. As a wholly-owned subsidiary of a Federally Qualified Health Center (FQHC), we have grown from self-managing a 340B program to providing industry-leading services for clients across the country. Hudson Headwaters 340B fills a unique space in the 340B market with a perspective formed very carefully over the past 19 years. Our dual perspective, that of a covered entity and as a vendor, allows us to understand the struggles you face and help you develop a plan to take those struggles on.

Our team will work with your organization to customize a 340B arrangement that works best for you, all while keeping compliance at the top of our priorities. We understand that you want a partner and not just a vendor. For this reason, we provide each client with a dedicated representative that is available when you need them. When you call for assistance, you will not get an automated service but real people who know you and your program.

Vigilant compliance is vital to ensuring the longevity of the 340B program and limiting potential future attacks. This task can be quite difficult when you are working with several organizations in the management of your program. When selecting which vendors to partner with, it is imperative that you do your research. Hudson Headwaters 340B feels that an administrator should be a like-minded, proactive partner which treats your 340B program as if it were their own. We know very well that at the end of the day program compliance rests with the covered entity, however, having partners looking out for you is paramount to a successful and cohesive program.

Hudson Headwaters 340B truly understands the impact that the 340B program has on your organization, your patients, and the communities you serve.   Whether you are with a health system, hospital or HRSA grantee, we are here for you.

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Lilly Relaxes 340B Contract Pharmacy Ban a Bit—But With Strings Attached

Eli Lilly and Co. will ship drugs bought at 340B prices to some covered-entity-owned pharmacies that are registered as contract pharmacies in the federal 340B program database, in what it describes as an exception to its controversial decision to stop selling its products at 340B prices for shipment to contract pharmacies.

To get 340B pricing from Lilly at those in-house pharmacies, however, covered entities must make huge concessions. First, they have to agree that Lilly is providing the discounted pricing voluntarily, and that Lilly therefore is not subject to potential manufacturer civil monetary penalties or repayment requirements under the 340B statute. Second, entities also have to agree to give Lilly and its auditors “access to any information in Covered Entity’s control that relates to Lilly products as necessary to audit 340B purchases consistent with Lilly’s audit rights” under the 340B statute.

It’s questionable if any covered entity would agree to that.

340B Report obtained an undated Lilly document entitled “340B Limited Distribution Exception for Wholly Owned Contract Pharmacies,” that recently was presented to a covered entity with an in-house pharmacy registered as a contract pharmacy in the U.S. Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs Information System (OPAIS). According to a 340B Prime Vendor Program FAQ, in-house pharmacies that entities establish as separate legal entities must be registered as contract pharmacies in OPAIS. Experts say many health systems use this approach.

The document Lilly is requiring covered entities with such pharmacies to sign says:

Covered Entity acknowledges that Lilly is voluntarily providing 340B discounts to contract pharmacies that are wholly owned by the Covered Entity. By requesting and accepting this exception to Lilly’s limitation on contract pharmacy purchases, Covered Entity agrees that any 340B prices to wholly owned contract pharmacies are voluntary discounts not required under 42 U.S.C. 256b and therefore not subject to potential civil monetary penalties or repayment under 42 U.S.C. 256b, 42 C.F.R. Part 10, or otherwise. Covered Entity agrees to allow Lilly and/or its auditor to have access to any information in Covered Entity’s control that relates to Lilly products as necessary to audit 340B purchases consistent with Lilly’s audit rights under 42 U.S.C. 256b(a)(5)(C).

The document also includes conditions stating that the entity must have “whole ownership (100%)” of the pharmacy; that Lilly has “sole discretion” whether to designate such pharmacies as a ship-to location for 340B-priced Lilly products; that Lilly can “change this discretionary practice at any time”; if there is a change in a pharmacy’s ownership structure, the entity has just one business day to notify Lilly of the change; and that “there may be an obligation to report discounts to the Department of Health and Human Services or applicable state agency.”

Ryan White Clinics for 340B Access and two of its members late last week sued U.S. Health and Human Services (HHS) Secretary Alex Azar in federal court to compel him to protect their rights to buy covered outpatient drugs from Lilly and three other manufacturers that refuse to sell them when the drugs are ordered through 340B contract pharmacy arrangements.

A second similar lawsuit by 340B covered entities against HHS and HRSA is expected soon.


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Trellis Rx Webinar: Accelerate Results of a Health System Specialty Pharmacy Service

As the prevalence of specialty medications continues to grow, health systems are uniquely positioned to enhance care for patients who require these high-cost, hard-to-manage drugs.

On Oct. 21 at 1 p.m. ET, Trellis Rx, the leading health system specialty pharmacy services provider, is sponsoring an HFMA webinar with its partner Memorial Hospital at Gulfport to share best practices on how health systems can accelerate results of an in-house specialty pharmacy service.

The continuing education webinar will be co-presented by April LaFontaine, Chief Administrative Officer at Memorial Hospital at Gulfport, and Denali Cahoon, Chief Operating Officer at Trellis Rx.

The webinar is free for HFMA members, who can sign up here. Others interested in the event may contact Trellis Rx to receive the webinar recording.


New Group Is the Latest Sign that Specialty Drugs Are More Important than Ever

Yesterday’s announcement of a new alliance of health system-owned specialty pharmacies is another sign of specialty pharmacy’s rising importance in hospital outpatient care for patients with chronic diseases or conditions.

Seven large U.S. health systems and a company that helps systems build and manage specialty pharmacies on Wednesday launched the Health System Owned Specialty Pharmacy Alliance (HOSP). Six of HOSP’s seven charter members are clients of Shields Health Solutions (the first six listed below). The health system members and their headquarters locations are:

  • Baystate Health, Springfield, Mass.

  • Berkshire Health Systems, Pittsfield, Mass.

  • CommonSpirit Health, Chicago, Ill.

  • Fairview Health Services, Minneapolis, Minn.

  • Hartford HealthCare, Hartford, Conn.

  • UMASS Memorial Health Care, Worcester, Mass.

  • WVU Health System, Morgantown, W.Va.

Others involved in hospital specialty pharmacy also have been active lately.

The American Society of Health-System Pharmacy (ASHP), which created a membership section for specialty pharmacy practitioners in 2018, fielded its first national health system specialty pharmacy survey this September, and plans to hold its first summit on hospital and health system specialty pharmacy this coming February.

TrellisRx, a 340B Report sponsor, this summer released findings from interviews with health system pharmacy and health plan leaders on barriers to hospital/payer specialty pharmacy partnerships. Pharmaceutical Strategies Group (PSG), also a 340B Report sponsor, last week released its fourth annual report on specialty drug utilization and gross spending.

SPARx, a division of 340B Report sponsor Comprehensive Pharmacy Services, helps health systems plan and execute specialty pharmacy strategies. 340B Report sponsor AllianceRx Walgreens Prime is a specialty and home-delivery pharmacy that offers providers help with prior authorizations, insurance appeals, patient copay assistance, and disease-specific patient support.

Health system interest in bringing specialty pharmacy in-house has grown for several reasons. For example, health systems employ more specialist physicians and practitioners than before. Their patients have conditions such as cancer, HIV/AIDS, rheumatoid arthritis, or multiple sclerosis, and those patients need expensive specialty drugs that often need special handling and often are administered by clinicians.

Drug wholesaler and health care services corporation McKesson cited statistics in a 2019 specialty pharmacy white paper showing that 80 percent of new drug approvals are considered specialty; that specialty medication is expected to increase to 50 percent of drugs costs this year; and that while specialty drugs represent less than 2 percent of prescriptions written, they account for nearly 40 percent of consumer spending in the same channels.

Meanwhile, nearly half (44 percent) of health systems hospitals in 2016 participated in accountable care organizations (ACOs) that reward systems financially for meeting patient quality-of-care performance standards. One way for health systems and their hospitals to achieve better patient outcomes is to improve specialty medication utilization and adherence. Some health systems have decided it is more efficient to help patients get prior authorization from their payers for specialty drugs, and for clinicians to ensure patients actually take their prescribed specialty medicines, when specialty pharmacy is brought in-house and fully integrated with the system’s electronic health records.

HOSP, the new trade association for health system specialty pharmacies, wants to be “the ‘face and voice’ of the integrated specialty pharmacy industry advocating for, and uniting members around, common industry interests and concerns,” HOSP Executive Director Tanya Menchi said in a news release announcing the group’s creation. “We believe the integrated health system owned specialty pharmacy model is the best way to deliver exceptional patient care and outcomes.  The industry needs its own voice. HOSP’s goal is to help bring the industry together so they have a seat at the table and ensure that their interests are represented.”

“Creating a trade association that is dedicated to representing specialty pharmacies owned by health systems means HOSP members can focus on our unique issues and commitment to patients and their care team,” said Tim Affeldt, vice president, Specialty/Infusion Pharmacy Operations, Fairview Health Services.

Recent drug manufacturer steps to stop providing 340B pricing for drugs dispensed by contract pharmacies, or to make covered entities share their contract pharmacy claims data to keep getting such pricing, will rank high on HOSP’s policy agenda, Menchi, Affeldt, and Neil Gilchrist, Chief Pharmacy Officer at UMass Memorial, said. So, too, will the ongoing fight over the U.S. Centers for Medicare & Medicaid Services’ (CMS) deep cuts in Medicare Part B reimbursement for 340B-purchased drugs.

HOSP says membership “is open to any qualified health system that seeks to embrace the organization’s mission of delivering critical care excellence through health system owned specialty pharmacies.” Menchi said HOSP is open to the idea of letting businesses other than Shields in the health system specialty pharmacy space join. For now, she said, HOSP is focused on adding more health system members.


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Two Members of Congress Tweet in Support of 340B Providers

U.S. Sen. Tom Cotton (R-Ark.) and Rep. Jared Golden (D-Maine) used their Twitter feeds this week to express support for 340B covered entities. Cotton tweeted about co-sponsoring legislation to protect hospitals from losing 340B eligibility due to changes in payer mix during the COVID-19 pandemic. Golden tweeted about meeting online with Maine community health centers about the 340B program and letters he and other members of Congress have signed urging the U.S. Health and Human Services Department (HHS) and drug manufacturers to ensure “that the 340B program remains available to serve low-income Mainers who need treatment.”