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

David Glendenning (00:12):
Hello from Washington D.C. and welcome back to 340B Insight, the podcast about the 340B drug pricing program. I'm your host, David Glendenning with 340B Health. On today's episode, we have Ashley Covert, the system director of Pharmacy supply chain and contracting at Dartmouth Health in New Hampshire. As her title makes clear, Ashley is an expert on pharmacy supply chain issues, and she spoke about the topic on several panels at the most recent 340B coalition conference. We wanted to hear her take on some of the best practices for hospitals to maintain their stockpiles of 340B and non 340B medications and for working through challenges that can include widespread drug shortages. But first, let's do a quick recap of some of the latest news about 340B.

(01:13):
A key committee in the US House of Representatives has approved two bills that would have adverse effects on 340B hospitals if they were to become law. One of the bills would permit the Health Resources and Services Administration to audit covered entities on their use of 340B savings. It also would require burdensome reporting to HRSA from most hospitals with detailed data on their payer mix, provision of charity care and more. A second bill to ban spread pricing practices by pharmacy benefit managers includes onerous provisions affecting covered entities receiving Medicaid managed care payments for 340B drugs that exceed the 340B purchase price. Those entities would be required to submit annual reports to the government detailing the amount of this payment spread. The approval of these bills by the House Energy and Commerce Committee clears the way for possible house floor action on the legislation. 340B Health was joined by six other hospital and pharmacist associations on a joint statement opposing the passage of these reporting mandates, which the group said would impose burdens on hospitals and demand information that is unrelated to the intent of 340B.

(02:27):
You can visit the show notes to read that statement and find additional bill details for 340B health members. And now for our feature interview with Ashley Covert with Dartmouth Health, we often speak on this podcast about hospitals using 340B to connect patients to the care they need, but that is only possible if the hospitals can deliver 340B drugs to their patients in the first place. And that means navigating what can be a very complex pharmacy supply chain. Myles Goldman recently sat down with Ashley to learn more about that process for 340B hospitals. Here's that conversation.

Myles Goldman (03:13):
Thank you, David. I'm joined by Ashley Covert from Dartmouth Health here at the 340B Winter Coalition Conference, we're in the exhibit hall. Ashley, you're speaking on a panel about the drug supply chain and I'm looking forward to discussing that presentation with you. Welcome to 340B Insight.

Ashley Covert  (03:34):
Thanks for having me Myles.

Myles Goldman (03:36):
Let's start by talking really broadly about this issue of supply chain factors. We've heard a lot in the news about the drug supply chain. What are the supply chain factors putting strain on 340B hospitals access to medications?

Ashley Covert  (03:53):
I think there's a number of things going on right now. Recently we've seen raw ingredient in API supply issues that not only impact manufacturer's ability to make medications, but also our 503B suppliers ability to make medications on our behalf. And throughout the pandemic, we've seen the global dependency that we have on the supply chain and there's been a number of high impact shortages due to the reliance on overseas manufacturing as well as recently a major generic manufacturer left the market with little notice. And so that really puts our supply chain team in a bind to source alternative products as well as respond to those shortages that will result from that manufacturer leaving the market. I would say staffing is a major issue for our hospitals and our clinics. So when you think about that last mile distribution, once you have the medication within your health system, how are you getting that ultimately to the end user, which is the patient? We've seen operational struggles to keep staff and be able to kind of take that medication to the end user within our retail pharmacies and within our health system pharmacies.

Myles Goldman (05:10):
Of course, we're here at the 340B conference. So 340B is the central discussion, and how does 340B affect a hospital's drug spend?

Ashley Covert  (05:21):
The 340B program allows us to procure medications at a lower expense to our system. And so being a safety net provider for care to underserved populations, it allows us to stretch those scarce resources when we work in nonprofit healthcare. The margins are very slim to begin with and our organizations provide millions in charitable care each year, and the 340B program really allows us to continue to do that.

Myles Goldman (05:50):
When working to contain drug spending. Are there other procurement strategies 340B hospitals should consider?

Ashley Covert  (05:56):
I think as there's more consolidation within healthcare, you're seeing expansion of systems and that can include different entity types within your group. And so you may have hospitals that are disproportionate share hospitals, critical access hospitals and non-covered entities that you're working with and servicing through your supply chain. And so one of the items that we have looked at from a new lens in our system is NDC standardization. And so the best NDC at one site may not be the best NDC at another site due to different purchasing points, 340B mix and a variety of other factors. So I think when you're looking at supply chain from a system perspective, it's important to kind of factor all of those things in.

Myles Goldman (06:42):
In your presentation here at the conference, you spoke about how pharmacy leaders need to leverage data and analytics to overcome the complexity of the supply chain. Can you tell us more about what you were discussing there?

Ashley Covert  (06:57):
So I think we often say within our team, 'you can't manage what you can't see'. And so knowing how we spend our money, just like how you spend your money at home, is incredibly important for budget control and making sure that we're making mindful decisions. And so we've been able to add reporting analysts to our team and they review things like 80/20 reports from the wholesaler, our biosimilar rates. So are we using more biosimilars than the innovator, reviewing things like non-formulary use that maybe we've restricted medications and only approved them in a certain population and confirming that we have adhered to those restrictions to contain cost and avoid inappropriate medication use. So for example, our analysts will review price change reports, and so maybe we paid $1 for this medication yesterday and we ordered it today and it was $15. Well, was there a contract load issue? Maybe that item's not on contract anymore. Maybe the price just increased and we need to reevaluate or continue to monitor what is the budget impact of that going to be? And while certainly there are other resources we had within our team that could support that as a component of their job, our analyst has been able to identify savings rapidly to have them implemented and they've been a great addition to our team.

Myles Goldman (08:20):
Is there a technology element to all this too, when thinking about data and analytics?

Ashley Covert  (08:27):
Certainly. So one of the big things that we have implemented through, at our system we are still bringing some sites on as the use of a perpetual inventory system. And so having visibility to where medications are has proven to be in incredibly useful for things like managing drug shortages. So being able to see run rates at sites across our system to say, if we bring in 100 units of this drug that is now on shortage, how long will that last us? Where does it need to go? And without that visibility and that data it is incredibly challenging to know how much you're using. Maybe to do different documentation practices or different electronic health records being used within your ambulatory and inpatient sites. So I think that has been a huge win from an introduction of technology across our system.

Myles Goldman (09:20):
And you mentioned before about adding an analyst to your team, I think that's a great segue into discussing staffing issues. How are hospital staffing their pharmacy teams to manage hospital drug inventory?

Ashley Covert  (09:35):
So one of the things our health system recently did was open up a consolidated service center, so that building houses our pharmacy supply chain for non medications as well as our home delivery pharmacy. And so expanding our footprint and giving us space has allowed us to centralize some of the purchasing with the addition of that automation, we're now able to pull that electronically. We've been able to reduce redundancy throughout the system and I think increase operational efficiency. We also have local members that work at each of our sites and so on site they're able to do things like evaluating local stocking practices within our automated dispensing cabinets. So recently we looked at where we had different medications that are stocked that are administered when patients are having a stroke or a heart attack within the hospital. Those medications are incredibly expensive and so we want to ensure that there's not stagnant inventory that's one potentially expiring or two overstocked in a location because maybe the patient acuity has changed there.

(10:42):
And so we were able to make a significant inventory reduction by reviewing what was stocked where, and that local inventory resource was able to coordinate movement of stock from point A to point B, make sure that the short dated items were put in the inventory locations that moved the fastest and what kind of helped confirm that we had a relatively low chance of expiring those medications. So we take a dual approach at our inventory management currently within our health system for sites that don't have a consolidated service center, maybe you're a standalone hospital. I think we typically see the buyer position or the inventory position is a small component of someone's job due to a low number of FTEs. And so I think we've tried to pull together and centralize as much as we can to help support them in those roles and serve as an extra set of hands when they may be busy delivering patient care at the site.

Myles Goldman (11:45):
That's really all interesting to hear about that collaboration. How much effort was it to go through that consolidation?

Ashley Covert  (11:54):
We're still in the midst of it, so I think it was incredibly challenging due to the timing of it. We started planning right before the pandemic started, so it went on hold and then very rapidly ramped up when things settled a little bit because we realized the impact of not having that centralized space to store extra medications during the pandemic. And so it was definitely a huge venture, but it's allowed us to do things like introduce a high speed re-packager and so operationally our sites were doing that at a site level. It was an additional burden and it was very time consuming in a manual process. Now we can repackage thousands of tablets, I mean pretty much in the click of a finger or button. And it's been able to again, reduce the burden on those local sites and allow those individuals who work at our smaller critical access hospitals time to do other things. And so it was no small feat to get the warehouse up and running, but ultimately at the end of the day, I think we all wonder how we lived without it for so long and we've only been there for a year. So it's made a huge impact for our team.

Myles Goldman (13:06):
We've touched on it already, the issue of drug shortages, but wanted to talk more about what your specific experiences with managing medication shortages has been and how your team at Dartmouth Health has operationalized your response to this issue that we hear from so many health systems about.

Ashley Covert  (13:26):
Yeah. It's not going away, that's for sure. It seems like we've been talking about it for years and I think we'll continue to be talking about it for years. One of the biggest things I think that sites can do is increase their sourcing opportunities. So a lot of sites have a primary wholesaler that they buy 95, 98% of their medications from. With the introduction of limited distribution medications, we're seeing drugs being restricted to a certain wholesaler. So it's allowed us to establish new relationships with wholesalers in a secondary and tertiary capacity to say, maybe my primary doesn't have this medication today, but my secondary has an alternative that I could easily implement instead of having to repackage in house. So we've tried to increase the number of sources that we have for products. We contract directly with manufacturers.

(14:17):
Some manufacturers do self-distribution, others don't, but I think it's a great opportunity to build relationships with manufacturers so you're in the know, they're a great source of information. We've outsourced a lot of 503B products due to the staffing shortages that we talked about previously. And so a few years ago we had really one supplier for one product and we've changed that strategy. So now for something like an IV antibiotic that we source from a 503B, we kind of keep 50% with one supplier and 50% with another supplier because should they have a quality issue, a recall, a batch delay in releasing, impacting our ability to get that medication in the anticipated timeframe when we place the order, we now have the ability to say, 'okay, but in two weeks we have product coming from this source and that will be enough to carry us'. The other thing that we recently did was create a position for a clinical pharmacist within our supply chain team.

(15:21):
They work at the system level and really serve almost as a historian. They help put alerts in our electronic health record, they get physician engagement. Our pharmacist work to create an intranet page. And so you can go log into our website as an employee and search drug shortages, click on there and it posts the meeting minutes from our weekly shortage call alerts, updates to supply chain items. Sometimes we'll send out clinical alerts to the providers to let them know that there is a shortage that has reached the point of impacting patient care. And there's a repository house there, he works closely with our buyers as well as our analysts who review omissions reports. So maybe we've tried to order a medication five days in a row and it hasn't come in from the wholesaler, and that could be an indication that there there's going to be a supply interruption or maybe we've been ordering 20 boxes of something and we've only been getting 10. So we're seeing an allocation. That's a really good indicator that something's going on shortage. So having that as a part of the responsibility of a specific team member allows us to be more proactive, get a better landscape of that particular molecule or medication to see, okay, do we think there's going to be a shortage or a supply interruption and kind of respond in a very rapid and effective manner.

Myles Goldman (16:49):
There's a lot of intricacies and considerations to this process it sounds like. I would just like to know how you stay informed on drug supply issues given the ever-changing environment.

Ashley Covert  (17:02):
I think the pandemic kind of puts supply chain in the mainstream media. My family will reach out to me and they'll be like, "oh, I saw this medications on shortage. Is that what you do for your job?" And I'm like, "yeah, that is what I do for my job". So I think we now see it in the mainstream media. One of the big things that our team does is we have a variety of memberships. So being here at 340B Health, being a member of the American Society of Health System pharmacists who routinely publish shortage information, working with your GPO and being on listservs, simple things like joining LinkedIn. So LinkedIn is actually where I saw someone post about the recent manufacturer closure, and I was able to email the team high priority and say, we need to pull together and look at this immediately. And so we had a meeting, I mean not less than 30 minutes later, and we were able to rock and roll, and if I hadn't happened to open up LinkedIn that morning and seen it while I was making coffee, that could have led to delays in our ability to respond. So little things like that. I think networking is another huge thing to do, and having colleagues in the profession that share information is super helpful.

Myles Goldman (18:14):
Well, I know it's always nice given the fact that 340B and pharmacy issues can sometimes be a little bit more behind the scenes than the general public realizes. So I recognize it's always nice when family members recognize the work that we're doing right.

Ashley Covert  (18:28):
Yeah. It was good that all these years later, they finally were able to wrap their heads around what I do. So it's great to see that.

Myles Goldman (18:37):
Ashley, really appreciate you sharing some of the best practices and experiences that you've had on this really important topic for 340B hospitals and health systems. Thank you for joining us here.

Ashley Covert  (18:50):
Thanks for having me.

David Glendenning (18:52):
Our thanks again to Ashley Covert for explaining the pharmacy supply chain to us and sharing some of Dartmouth's best practices for dealing with supply chain challenges. We are glad to get this look behind the scenes at how hospitals ensure they have what they need to care for their patients. If you want to learn more information and hear best practices on pharmacy operations topics such as these, then be sure to register for the 340B Coalition Summer conference taking place July 10th to 12th just outside of Washington D.C. Conference hotel rooms are booking quickly, so please reserve your spot today if you have not already. We will be back in a few weeks with our next episode. In the meantime, as always, thanks for listening and be well.

Speaker 1 (19:44):
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 340bpodast.org. You can also follow us on Twitter at 340bhealth and submit a question or idea to the show by emailing us at podcast@340bhealth.org.