Speaker 1 (00:04):
Welcome to 340B Insight, from 340B Health.

David Glendinning (00:11):
Hello, from Washington, DC, and welcome back to 340B Insight, the podcast about the 340B drug pricing program. I'm David Glendinning, with 340B Health. This episode is sponsored by 340B Link. Leveraging the highest claims qualification standard in the industry, the 340B Link team helps covered entities capture eligible mixed use, specialty, mail order and contract pharmacy savings. Their dedicated client teams focus on delivering an exceptional service experience, while advocating for their clients in support of the 340B program.

David Glendinning (00:50):
Our guest today is Caroline Steinberg, the Vice President of Research and Policy Analytics here at 340B Health. We spoke with Caroline about some of the exciting new 340B research that has come out recently or is in progress. But before we go to that interview, let's take a minute for a roundup of 340B news.

David Glendinning (01:18):
A new, independent study published in the Journal of the American Medical Association concludes that inflation penalties built into the 340B program help restrain the growth in prescription drug prices. Under the 340B statute, drug manufacturers offer a set discount on eligible drugs to covered entities, but the size of those discounts increases if manufacturers' hike the prices of their drugs faster than the rate of inflation for other goods in the economy. A review of Medicare data found that drugs with more of their sales in the 340B program had lower price increases over time, indicating that the inflation penalties are working. We discuss this study in today's feature interview, and you can access the full report in the show notes.

David Glendinning (02:05):
We are less than a week away from the deadline for public comments on a proposed Medicare payment rule that would deepen pay cuts to many 340B hospitals starting in January. Member hospitals who would like to submit their own comments can use a letter template that we provide in the show notes for this episode. We encourage you to do so before the October 5 deadline.

David Glendinning (02:26):
In the meantime, litigation continues over Medicare cuts that have been in place since 2018. A group of national hospital organizations and several 340B hospitals are asking a federal appeals court in DC to reconsider a split decision from a three judge panel that upheld the authority of HHS to implement those cuts. Nearly 300 pharmacists, 340B coordinators, hospital executives, and other program experts took to Capitol Hill last week, virtually of course, to call on their members of Congress protect 340B.

David Glendinning (03:01):
The first ever Virtual Hill Day, organized by 340B Health, comes at a time of intense interest from lawmakers about unilateral moves that some drug companies are taking against 340B hospitals. Several manufacturers are cutting off 340B access to covered entities on drugs dispensed at contract pharmacies, or are threatening to do so. The Hill Day gave many of the attendees the chance to thank some of the 243 House members and 28 Senate members who signed on to recent bipartisan letters to Health and Human Services Secretary, Alex Azar, urging him to put a stop to these drug company actions.

David Glendinning (03:48):
Now for today's feature interview with Caroline Steinberg, the Vice President of Research and Policy Analytics here at 340B Health. Our own Myles Goldman sat down with her to discuss all the compelling data coming out about the 340B program. Let's hear that conversation.

Myles Goldman (04:05):
Hello, I'm Myles Goldman with 340B Health, and I'm joined today by Caroline Steinberg, the VP of Research and Policy Analytics for the organization. Caroline, welcome to 340B Insight.

Caroline Steinberg (04:17):
Thanks, Myles. Great to be with you.

Myles Goldman (04:20):
Caroline, research is a topic we hear a lot about when discussing 340B, and I'm looking forward to digging into what research currently exists on the program, how it's used and what might be ahead. But first, can you tell us a little bit about your background and the kind of work you've done?

Caroline Steinberg (04:35):
Sure. I am just about to hit my one-year Mark here at 340B Health. Prior to that, I worked with the American Hospital Association, where I handled a variety of policy issues including research surrounding 340B, as well as DRG redesign, community benefit reporting and modeling the impact of the Affordable Care Act. Prior to that, I did consulting on operations improvement and strategic planning, primarily with safety net hospitals.

Myles Goldman (05:03):
So let's talk about how research is important to 340B. What role does it play?

Caroline Steinberg (05:09):
Research is critical for a number of reasons. First of all, it helps us to educate policy-makers and the public about the role of 340B, which helps us to ensure ongoing support for the program. It also allows us to demonstrate that the program is appropriately targeting safety net institutions. For example, we did one study that showed that 340B hospitals provide 60% of all uncompensated care, even though they only make up 40% of hospitals.

Caroline Steinberg (05:42):
We also use research to document program benefit to show how 340B hospitals are using their savings to improve access and quality of care. And then finally, research can provide best practices so that our members can learn from each other on how to best use their 340B savings.

Myles Goldman (06:02):
With all of the conversations happening around 340B right now in policy, how do policy-makers use the research?

Caroline Steinberg (06:12):
Well, policy-makers really value solid research because they get a lot of misinformation from program opponents. These opponents exaggerate the program size, they question how the discounts are being used and they challenge the eligibility rules. So having research, particularly that that's published research, really helps us to combat this misinformation.

Myles Goldman (06:37):
How do we share that info with policy-makers? Do we bring it to the Hill? What does that look like exactly?

Caroline Steinberg (06:45):
Sometimes we share it directly with people on the Hill. We might actually send out a report that we've done. We include mentions of our research and letters to policy-makers, particularly our comment letters.

Myles Goldman (06:59):
340B Health has published several research reports and briefs this year. The most recent one was about the link between 340B hospitals and caring for patients relying on Medicaid. Can you discuss this report and the key takeaways?

Caroline Steinberg (07:13):
Sure. First of all, I think it's important to note that service to Medicaid patients is a key criteria for eligibility for the 340B program. And the reason for this is that Medicaid patients present special challenges. They're three times more likely to report being in poor health, they're significantly more likely to have chronic diseases, they're more racially and ethnically diverse than those that are privately insured. Despite all these challenges, however, Medicaid actually pays less than the cost of caring for its beneficiaries.

Caroline Steinberg (07:45):
So this study set out to look at the role 340B hospitals play in serving this population. We found that three quarters of all hospital care to Medicaid beneficiaries is provided by 340B hospitals, which represent only 40% of all hospitals. 340B hospitals also provide a higher proportion of care to people with Medicaid, as well as to those eligible for both Medicaid and Medicare.

Caroline Steinberg (08:17):
One of the reasons that we have the 340B program, is that serving such a high percentage of Medicaid takes its toll financially. Even with the savings from the 340B program, which can be significant, 340B hospitals on average have negative margins, five percentage points lower than non-340B hospitals.

Myles Goldman (08:39):
I know 340B Health also conduct surveys of our member hospitals. How do such surveys affect efforts to educate policy-makers about 340B?

Caroline Steinberg (08:49):
These surveys are absolutely critical. They help us to gauge the impact of policy changes and communicate that impact to lawmakers. For example, you may be aware of manufacturer efforts to cut back on discounts through community pharmacies. Our surveys tell us that 57% of 340B benefit for our smallest hospitals for critical access hospitals come from these community pharmacy relationships, and 25% of the benefit comes from these relationships overall. So that is a really important point for policy-makers to know the harm that these manufacturers' actions could do.

Caroline Steinberg (09:30):
Surveys also provide us with data on how hospitals use funding and what might happen if they cut back. For example, the majority of small rural hospitals depend on 340B savings to keep their doors open, and 340B dollars fund uncompensated care, they fund medication access programs, programs to improve medication adherence, and also to reduce utilization like hospital admissions and emergency department visits. So we use this data in our comment letters, as well as in our letters and presentations to lawmakers.

Myles Goldman (10:09):
It's really telling the story of 340B through data, right?

Caroline Steinberg (10:14):
Exactly.

Myles Goldman (10:15):
More recently, 340B Health has published reports profiling the work that hospitals are doing in areas like diabetes and improved patient outcomes. What do reports like these tell us?

Caroline Steinberg (10:26):
Well, these reports provide us with tangible, compelling examples. Statistics and data are all well and good, but I think what really hits home with a lot of lawmakers are specific patient stories. The diabetes report focuses on an area of crisis in our healthcare system. We've got a crisis around the cost of insulin, and we've also got a crisis around the incidents of diabetes, particularly among the populations that are disproportionately served at 340B hospitals.

Caroline Steinberg (11:00):
Our report shows how the 340B program works to get patients the medications and the supplies they need in an affordable and sustainable way. It also shows how the program goes well beyond just supporting access to medications. 340B hospitals also use their savings to help patients better manage their disease. Some hospitals are funding pharmacists that actually work directly with the patients. Some even have pharmacists go into the home where they can talk to patients not only about their medical care, but also about their diet and exercise. Also, specific patient stories are a powerful way to make the impact of the 340B program real to policy-makers.

Myles Goldman (11:51):
Research on 340B also has been conducted by several government agencies, such as the Medicare Payment Advisory Commission. They released earlier this year a report on cancer care. Can you walk us through the results?

Caroline Steinberg (12:05):
Sure. Let me first say that MedPAC is a body that advises Congress on Medicare payment policy. And the purpose of this report was ... Actually, they were asked by lawmakers to look at whether 340B incentives cause hospitals to use more and more expensive drugs. They looked at this question in multiple ways, and actually found no evidence to support this. Let me go into a little bit more detail. They focused on five types of cancer, and cancer is critical because cancer represents about 70% of part of the drug spending.

Caroline Steinberg (12:45):
First, they did a straight comparison where they just looked at 340B versus non-340B hospitals, and they found that there was no consistent pattern of higher or lower drug spending. Next, they looked at hospitals that were newly enrolled in the 340B program to see if they changed their prescribing behaviors after they became a part of the program. They found that there was no evidence of any change in prescribing patterns. Finally, they did a market level analysis where they looked at the level of market share of 340B hospitals to see if markets that had more 340B hospital drug spending had higher spending on cancer care. They found no evidence for three out of the five cancers. So it was a little bit mixed.

Caroline Steinberg (13:42):
But one of the things that they did find was that 340B hospitals really are the safety net for cancer care. They found that 340B hospitals are providing more services to low income patients, more services to disabled Medicare beneficiaries and more services to younger patients. They also found that these patient characteristics typically lead to higher cancer spending. At the end of the day, they found that the real culprit in the rising spending on cancer care is drug company price increases, and the introduction of new drugs with ever higher launch prices.

Myles Goldman (14:24):
And it's not the only outside research that's being done on 340B. What are some other examples?

Caroline Steinberg (14:31):
Just last week, an article came out in the Journal of the American Medical Association, so it's a peer-reviewed journal, that looked at the impact of 340B pricing on manufacturer drug pricing behavior. As background, the 340B program discounts are greater when drug companies increase the price of their drugs at rates above that of inflation. Drug manufacturers have long maintained that these so-called inflationary penalties result in higher rather than lower price increases. This assertion is counter to economic theory, but had never really been analyzed before.

Caroline Steinberg (15:12):
A researcher from West Health Policy Center used publicly available Medicare drug data to look at whether drugs with a higher proportion of sales through the 340B program, and subject to penalties, have higher or lower drug price increases. He found that these drugs have lower price increases. So it really kind of put to rest this notion that the 340B program is driving up prices for others on drugs.

Myles Goldman (15:43):
I want to take this opportunity to look ahead now. What research topics do you think are ahead for 340B? Are there opportunities for 340B hospitals to conduct their own research?

Caroline Steinberg (15:55):
First of all, we are planning to do a report looking at how 340B hospitals are pursuing health equity. So we are definitely looking for hospitals to provide examples of what they're doing in that arena. We are also doing a report now that will be looking at the clinical characteristics of patients of 340B hospitals versus non-340B hospitals. We just really want to understand how those patients might differ. Are 340B hospitals doing more mental health care? Are they doing more hepatitis care, more AIDS care? And how is their mission coming through in the clinical characteristics of patients?

Caroline Steinberg (16:42):
We also have a grant program. We have just awarded three grants to several institutions. They're doing studies, medication assistance programs, as well as medication management programs. And we will be doing another set of grants towards the middle of next year.

Myles Goldman (17:02):
I appreciate you sharing that information with our listeners, Caroline. What are some initial steps 340B hospitals can take when conducting their own research?

Caroline Steinberg (17:12):
The first step is to identify the programs that are supported by 340B savings. Next, is to identify the data sources that might allow hospitals to gauge the impact of these programs. For example, two out of three of our grantees are looking at data that they already have on hand for patients. So they're tracing back, in one case, patient A1C levels to see how those changed before and after the medication assistance program. And then another one is doing the same for the viral load for hepatitis C. So oftentimes, hospitals will have the data they need to conduct this research already on hand.

Myles Goldman (17:57):
Do you find that these hospitals ... If you're a pharmacist at a hospital, do you find that they work with other departments in order to do the number crunching?

Caroline Steinberg (18:08):
Yes. They need maybe access to medical records or access to drug data, so they definitely work with other departments. One of our grantees is actually partnering with an academic institution to help them design their research.

Myles Goldman (18:25):
Where can 340B Health members learn more about the research the organization has conducted?

Caroline Steinberg (18:31):
All the research that we do is on our website. If you go to the Newsroom section, you'll see the research on the left-hand side.

Myles Goldman (18:41):
And is there compilation, a report that has all this research in it?

Caroline Steinberg (18:46):
Yes. Actually, we recently just released a research brief that kind of pulls together information from our surveys, information from our own sponsored research, as well as information from outside researchers, into one handy document, which can be, which is really useful in educating people about the 340B program, as well as developing support for it.

Myles Goldman (19:10):
Caroline, you have left us with a lot to consider when it comes to the importance of conducting 340B research. Thank you for joining us.

Caroline Steinberg (19:18):
Thank you, Myles. I've enjoyed talking with you.

David Glendinning (19:21):
Our thanks again to Caroline Steinberg for illuminating the growing body of research on the 340B program, especially studies showing the link between program savings and improved patient health outcomes. We look forward to seeing her upcoming report on 340B and healthcare equity.

David Glendinning (19:39):
Please plan to join 340B Health on Wednesday, October 14, for a webinar about all the recent drug manufacturer developments affecting the program, including the items we covered in our news update at the top of the episode. You can find the link to the webinar registration page in the show notes. As always, if you have any questions or comments about any of the items we cover here at 340B Insight, please email us at podcast@340bhealth.org.

David Glendinning (20:07):
We will be back in a couple of weeks with our next episode. Until then, thanks for listening and be well.

Speaker 1 (20:18):
Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on Twitter at 340B Health, and submit a question or idea to the show by emailing us at podcast@340bhealth.org.