The 340B Coalition Annual Summer Conference, held July 10 – 12 in Washington DC marked the 25th anniversary of the 340B Program. The Summer Conference had a record attendance with an estimated 1,500 hospital and health center executives, pharmacists, various clinicians, pharmaceutical company representatives, and others coming together to interact through the various sessions, roundtables, vendor displays and small groups.
This meeting’s session topics included the past, current, and future state of the 340B Program, plenary sessions featuring HRSA Administrator Dr. George Sigounas, OPA Director Krista Pedley, Apexus, and numerous breakout sessions on Monday. Tuesday featured a Legislative update, a very moving Keynote speech by Dr. Lena Wen, Commissioner of Health for the City of Baltimore, a presentation on Medicaid Billing and Reimbursement by John Coster, Director of Pharmacy at CMS, as well as sessions on surviving a HRSA audit and an update on the new OPA Information System 340B OPAIS. Among numerous breakout sessions, I found the session titled “How to Effectively Engage with Lawmakers” particularly valuable. Although this session was limited to Covered Entities only, I was invited personally by 340B Health Director of Government Relations Kathryn DiBitetto.
The 340B Program faces many challenges, both from inside and outside of Congress, and these were a primary focus of the various conference sessions. Numerous statements coming every day from Washington make it very clear that the healthcare landscape is uncertain and in turmoil. What may or may not happen with healthcare legislation changes daily. For this reason, we at Visante are hesitant to attempt any predictions or “crystal ball gazing” but there are several legislative efforts that we know will occur. These include:
- Plans to introduce 340B legislation by Representative Chris Collins of New York and Senator Bill Cassidy of Louisiana, both of whom have been critical of the program in the past.
- A hearing to be held by the House Energy and Commerce Committee on July 18. The Committee previously requested information from HRSA. Two subcommittee chairmen sent a letter to HRSA requesting documents related to HRSA’s oversight of 340B and expressing concerns about how providers use their savings. In a statement, 340B Health expressed support for 340B Program integrity and oversight, adding that it welcomed “balanced congressional oversight of all stakeholders – healthcare providers and drug.” 340B Health said “Hospitals are among the most transparent of all organizations, and existing federal reporting requirements show the value that 340B hospitals bring to low-income and rural patients.”
- On July 13, The Centers for Medicare & Medicaid Services proposed to deeply cut what it pays hospitals in the 340B Program for Medicare Part B drugs. CMS called for the cut in its annual hospital outpatient payment proposed regulation. The Medicare Payment Advisory Commission previously floated the idea of cutting payments to 340B hospitals but acknowledged that doing so would reduce the 340B benefit for these hospitals. MedPAC noted, “If 340B hospitals lose all or a significant share of the revenue from Part B drugs that they receive through the 340B program, they may decide to reduce their participation in the program.” CMS wants to reduce Part B drug payments from the current rate of average sales price (ASP) + 6 percent to a much lower rate of ASP – 22.5 percent. The cut would apply to 340B hospitals paid under the OPPS, which does not include critical access hospitals.
- A proposed executive order on drug pricing from the Trump administration leaked late last month contained language that directed the HHS Secretary to find ways to reduce the size of the 340B Program. However, on July 12, hospital lobbying groups reported hearing President Trump may be backing off plans to downsize a federal program that requires drug manufacturers to give discounted products to hospitals that treat a high number of indigent patients. In recent days, government affairs staffers at both the American Hospital Association and America’s Essential Hospitals, as well as other industry insiders, have heard that the 340B recommendation will not be included with the final drug pricing executive order (whenever it is released). While it’s unclear why it was omitted, it’s believed it’s likely President Trump would rather let Congress decide if there should be revisions to the Program. Regardless of the outcome, the White House, possibly for the first time, expressed interest in the 340B Program.
- A past survey of 340B Health members indicated that roughly 60 percent of hospitals would be likely or very likely to withdraw from 340B as a result of payment cuts that would take away all of their 340B savings on Part B drugs, which appears close to what CMS proposed. 340B Health strongly opposes this proposed reduction and urged the Trump administration to leave it out of the final rule that will come out later this year. Keep in mind that this is a budget recommendation by MedPAC that may or may not be included in the final budget.
- On a more positive note, on June 14, Reps. Peter Welch (D-Vt.) and Gregg Harper (R-Miss.) introduced a bipartisan bill, H.R.2889, “The Closing Loopholes for Orphan Drugs Act,” to limit the 340B Program’s orphan drug exclusion. The bill would allow rural and cancer hospitals in 340B to access discounted prices on orphan drugs when they use the drugs for non-orphan diseases or conditions. Because orphan drugs are among the most expensive drugs on the market and can cost patients up to $840,000 per year, this bill would significantly reduce costs for these hospitals, helping them keep their doors open and enabling patients to access affordable medications and services. In a recent testimony Allan Coukell, Senior Director of Health Programs for the Pew Charitable Trusts, recommended to Congress limiting the 340B orphan drug exclusion during a Senate Health, Education, Labor, and Pensions Committee hearing on rising drug prices.
In summary, Visante commends 340B Health for its continued sponsorship of the 340B Coalition conferences and encourages all 340B stakeholders to continue to support the advocacy efforts of all of the members of the 340B Coalition.
Members of the 340B Coalition include:
Children’s Hospital Association
America’s Essential Hospitals
The Hemophilia Alliance
National Association of Counties
National Association of Community Health Centers
National Association of State & Territorial Aids Directors
National Healthcare for the Homeless Council
National Rural Health Association
National Family Planning and Reproductive Health Association
National Coalition of STD Directors
Planned Parenthood Action Fund
If you have questions about the Conference or would like to talk with one of our experts about how Visante can help you to improve your 340B compliance please contact us.