Possibly Hundreds of Millions of Dollars Annually in Lost 340B Savings Draw Closer in California

Your 340B Report for Tuesday June 2, 2020

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A statue of a grizzly bear guards the door to the California governor’s office in the Capitol in Sacramento. A gubernatorial executive order that remains on track to take effect in January 2021 could cost the state’s 340B entities potentially hundreds of millions of dollars a year in lost 340B savings. | (Source: Shutterstock)

Possibly Hundreds of Millions of Dollars Annually in Lost 340B Savings Draw Closer in California

California 340B health care providers have been dealt a setback in their fight to stop the state from shifting Medicaid managed care pharmacy benefits into Medicaid fee for service. According to an April 2019 report by the state Legislative Analyst’s Office, the transfer could cost providers potentially “hundreds of millions of dollars annually” in lost 340B earnings on drugs billed to the state.

On May 28, the state Senate budget committee approved a spending plan for the coming 2020-21 fiscal year that would let Gov. Gavin Newsom (D) implement his 2019 executive order to carve out pharmacy services from Medi-Cal managed care and tuck them into Medi-Cal fee for service effective January 2021. Medi-Cal FFS pays acquisition cost for 340B-purchased drugs, whereas Medi-Cal managed care pays higher negotiated rates.

The Senate committee also decided not to give the state’s 340B health centers and non-hospital 340B clinics more than $100 million starting next year to shield them from the executive order’s financial impact. The state’s next fiscal year begins July 1.

“We are deeply concerned by the actions of the Senate late last week,” a California Primary Care Association (CPCA) spokesperson said.

Late last year, California health centers persuaded Newsom to request the $105 million supplemental payment pool in his budget proposal to the legislature in January 2020. Last month, the governor submitted a revised budget plan to the legislature with about $20 billion in cuts due to the COVID-19 pandemic. His revision excluded the supplemental assistance for 340B centers and clinics. In response to Newsom’s reversal, CPCA and individual health centers said they would lobby lawmakers to delay the Medi-Cal pharmacy benefit transfer. A CPCA spokesperson said more than 100 health center leaders participated in a virtual “day at the state capitol” last week to press lawmakers and the Newsom administration to delay the pharmacy benefit transfer.

State Senate and Assembly leaders reportedly are hashing out a final budget plan that is expected to resemble the Senate’s.

“This does not mean the fight is over,” the CPCA spokesperson said. “Health centers will be continuing to put pressure on as they move into final negotiations with the governor and administration. If this moves forward” without the $105 million in supplemental funding for centers and clinics, “we will be undermining our communities. The very communities this administration claims to care for will be harmed.  The very communities being most harmed by COVID-19.”


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Apexus Holding Webinar Tomorrow on COVID-19 Hot Topics for 340B Providers

Apexus, the government contracted 340B prime vendor, is offering a public webinar tomorrow at 1:00 p.m. Eastern on “340B operational considerations for telehealth, home infusion, and temporary sites during the COVID-19 pandemic.” The speakers are Jangus Whitner, clinical pharmacist and 340B program manager for Ohio health center PrimaryOne Health, and Curtis Frazier, an Illinois-based 340B subject matter specialist for the consulting firm Alinea Group.

Apexus isn’t holding the free webinar in its capacity as prime vendor, but instead under the banner of its separate Apexus Advanced 340B Operations Certificate program. The fee-based certificate program ($750 for covered entities, $1,250 for others) “is a separate Apexus offering that is not a part of the 340B Prime Vendor Program or otherwise associated with the Prime Vendor Agreement between HRSA [the Health Resources and Services Administration] and Apexus,” explained Steven Campanini, Apexus Vice President, Communications and Programming. Apexus previous has offered similar webinars for certificate program enrollees only, he said.

The certificate program comprises about 40 hours of online education that runs the gamut from how federal 340B policy is issued and enforced to how to minimize drug purchases at wholesale acquisition cost. Apexus started the certificate program in 2016, five years after it launched its 340B University series of training sessions at locations across the country and a year after it launched 340B University OnDemand online training sessions.

Apexus has operated the 340B prime vendor program under a series of agreements with HRSA stretching back to 2003.

More Health Care Dollars Flowing to Biden’s Campaign Than to Trump’s

Former Vice President Joe Biden, the presumed Democratic nominee for president, “has seen a surge in support from health-care professionals as President Donald Trump struggles to bring in cash from those working in an industry under pressure from the coronavirus pandemic,” the CNBC news network reports.

Citing data from the nonpartisan Center for Responsive Politics, CNBC reported May 29 that during the current 2020 election cycle, people in the health care field have given $3.8 million in donations to Biden’s campaign and outside groups that are supporting him. Employees in the pharmaceutical and health-product industries have combined to spend $2.6 million on Biden’s run for the White House so far, it said.

Trump and committees supporting him have brought in at least $2.4 million from health professionals during the election cycle, the news network said.

Kaiser Health News, meanwhile, recently profiled first-term U.S. Sen. Kyrsten Sinema (D-Ariz.), who it says has “emerged as a pharma favorite in Congress as the industry steers through a new political and economic landscape formed by the coronavirus.”

The article notes that Sinema, often described as a centrist or moderate in a party that increasingly leans left, has racked up $98,500 in campaign contributions from pharmaceutical companies for the current 2019-2020 campaign cycle, even though she is not up for re-election until 2024. “That stands out in a Congress in which a third of the members got no pharma cash for the period and half of those who did got $10,000 or less,” reporters Jay Hancock and Elizabeth Lucas wrote.

Sinema, it should be noted, is on record as supporting 340B hospitals on one of their top policy priorities. While serving as a U.S. Representative in September 2017, she was one of 228 members of Congress who signed a bipartisan letter to Centers for Medicare & Medicaid Services Administrator Seema Verma protesting CMS’s nearly 30 percent cut in Medicare Part B reimbursement to hospitals for 340B-purchased drugs. A few months later, Sinema signed on as a co-sponsor of H.R. 4392, Reps. Michael Thompson (D-Calif.) and David Kustoff’s (R-Tenn.) bipartisan bill to nullify language in a CMS rule implementing the cut.

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