Your 340B Report for Tuesday Feb. 4, 2020

President Expected to Address Drug Prices in State of the Union Message

In his State of the Union address tonight, President Trump is expected to announce an initiative to make insulin more affordable and to challenge Congress to pass legislation to reduce drug prices overall, multiple news sources report. Any such proposals would likely be fleshed out in the administration’s proposed budget for fiscal 2021. The White House is expected to release its budget next Monday, Feb. 10.

The Washington Post’s Health 202 blog reported this morning that, in tweets last night, Sen. Finance Ranking Member Ron Wyden (D-Ore.) noted that his and Sen. Finance Chairman Chuck Grassley’s (R-Iowa) bipartisan drug pricing bill would help control the cost of insulin. Wyden challenged Senate Majority Leader Mitch McConnell (R-Ky.) “to bring our bill to the floor for a vote so Congress can deliver relief to Americans.” Health and Human Services Secretary Alex Azar recently touted the Grassley-Wyden bill in a radio interview.

340B Providers Must Now Buy Cystic Fibrosis Treatment Kit Direct from Manufacturer

From now on, providers wishing to access 340B pricing on Kitabis Pak—which bundles the cystic fibrosis treatment Tobramycin with a reusable nebulizer—will have to buy the kits directly from the kits’ maker, PARI Respiratory. The company announced the switch to direct sales for 340B covered entities in a recent undated notice on the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) website.

Update: Analyses of GAO’s Recent 340B Reports

McDermott Will & Emery attorney Emily Cook analyzes the GAO’s Jan. 27 report finding weaknesses in HRSA and the Centers for Medicare & Medicaid Services' (CMS) 340B duplicate discount oversight in a Feb. 4 article in The National Law Review. She writes: “The GAO report may spur state Medicaid agencies to address duplicate discount prevention, including potentially publishing formal policies specific to Medicaid MCOs and 340B drugs, such as: (1) limiting the circumstances in which covered entities and their contract pharmacies may bill Medicaid FFS or Medicaid MCOs for drugs purchased at 340B discounts and (2) requiring that covered entities and contract pharmacies identify claims for 340B drugs billed to Medicaid FFS or Medicaid MCOs.”

Quarles & Brady attorneys Brenda Maloney Shafer and Richard Davis dissect the Government Accountability Office’s (GAO) Jan. 10 report finding weaknesses in HRSA’s oversight of 340B private nonprofit hospitals in a Feb. 2 post in their To Be or Not to 340B blog. “Nongovernmental hospitals should take notice and review their existing governmental contracts to confirm compliance with 340B Program requirements,” they say.

Vizient: Hospital Drug Expenditures Expected to Rise 3.59%

Hospital spending on drugs is projected to rise by 3.59 percent from mid 2020 through mid 2021, driven by “expensive biologic therapies, oncology and oncology-related drugs, disease-modifying antirheumatic drugs (DMARDs), and immunomodulators,” the group purchasing organization Vizient said in its Winter 2020 Drug Price Forecast. (Apexus, a Vizient subsidiary, runs the 340B Prime Vendor Program under an agreement with HRSA).

Vizient predicts specialty drug prices will rise by 3.36 percent. While the projected rate increase is similar to that for drugs overall, “since the prices of specialty drugs tend to be higher than those of non-specialty medications, this inflation rate suggests that organizations will likely need to increase their drug budgets,” Vizient said.

The report ranks the 20 drugs with the highest total spend for Vizient members. Nineteen of the 20 are biologic drugs.

Colorado Hospitals Aren’t Sharing Savings With Payers, State Health Agency Says

Colorado hospitals “are persistently increasing the price of care” despite significant reductions in uninsured rates and uncompensated care and while receiving significant increases in Medicaid payment rates, Colorado Medicaid’s parent agency says in a new report.

State and federal healthcare reforms “led to increased Medicaid payments to hospitals, fewer uninsured, less bad debt and less charity-care write-off for hospitals,” the report says. But “they did not result in a reduction of the hospital cost shift to other payers to cover the cost of uncompensated care as was expected.”

“This report shines a light on the fact that hospitals are not passing along savings to Coloradans, but are instead making record profits on the backs of consumers,” said Lt. Gov. Dianne Primavera about the report’s release. “We have to ensure these savings will make their way into the pockets of hardworking Coloradans.”

As we previously reported, the state Department of Health Care Policy & Financing late last year recommended "setting an upper payment limit on the prices charged to health plans by hospitals who are able to access lower 340B prices” and redirecting drug therapy administration away from hospitals and toward more cost-effective sites of care such as physician offices and home infusion sites.

Tweets of Note

@AIR340B: A new @EBRI study found hospitals charge nearly twice as much for cancer treatments than oncology clinics, another example of hospitals prioritizing profits over patients. As more hospitals participate in #340B, we cannot ignore these alarming trends: https://bit.ly/2Gfetnr

@StewartMAlyssa: 340B fuels the foundation of healthcare to those in need. Access and affordability are prominent components and with 340B these are possible. #Expand340B because #340BMatters. The future is brighter if we work together. @340BMatters @340BHealth

@340BHealth: How did #340B help rural patients in south-central Louisiana gain access to critical cancer treatments? Craig Ortego, VP of oncology services at Lafayette General Health System, discusses in a new #Facesof340B profile. http://bit.ly/2uXPr9U  #Protect340B

@340BHealth: #Protect340B is more than a hashtag. It’s about standing up for #340B, which enables safety-net hospitals to stretch their resources to provide more comprehensive services to more low-income and rural patients. Here are details about the program: https://bit.ly/2sAESsJ

@AIR340B: The #340B program serves a critical safety-net role for low-income patients, but for some, its rapid growth has reduced access to care. To learn why changes are needed to #Fix340B so it works for patients, click through #APatientsJourney: https://buff.ly/2I9sMuO  #WhoIsBenefiting?

@340BHealth: #340B hospitals provide billions of dollars of uncompensated care thanks to program savings. Find out how 340B enables more care for low-income and rural patients. http://bit.ly/2Flf9aw  #Protect340B

@MichRxConsult: How CVS Became A Health Care Tyrant - BIG by Matt Stoller. Excellent article by Matt Soller. One thing not mentioned in this article is CVSs claws in 340B prescriptions drug chain the fact that they also purchased the 340B administrator Wellpartner https://t.co/1AALSVkQ2G?amp=1

@DrNundy: Just saw a patient with first time seizure. Uninsured, taxi driver, paid $715 for 3 month supply of medication. Debating his health vs family needs. Losing hope. Last minute tried our clinic. Same medication at our pharmacy=$10. He’s crying (I nearly am too).

@croninakathleen: (Replying to @DrNundy) Why the disparity?

@DrNundy: (Replying to @croninakathleen) Drug pricing is a complicated and confusing mess. These are commodities! On our end as a federally qualified health center we have a 340B program that makes us eligible to provide outpatient drugs at significantly reduced prices.

@shycollie: (Replying to @DrNundy) Not to inject reality into this but the 340B program, that provided this cheap med, is a government program that is a transfer of wealth from taxpayers to hospitals, who make HUGE profits on it, at our expense. One reason medicines are so expensive is 340B, in the first place.

@RobertOxenburgh: (Replying to @shycollie and @DrNundy) But 340b drug prices are negotiated down. https://t.co/uy1Qrrso0Y?amp=1

@shycollie: (Replying to @RobertOxenburgh and @DrNundy) No, 340b is a well-intentioned govmt program, designed for about 100 hospitals treating the poor, which has been perverted by hospitals, now 3000 of them, into a huge rip off of the taxpayer. Defend it and you are defending rich hospital administrators, NOT pts who get screwed

@SaidaMY2: (Replying to @DrNundy and @croninakathleen) No , the price was set through CMS/ govt entity they have a bigger purchasing power. The safety net I work at also has the same program. Grateful that 340b program is still working!