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340B Insight provides members and supporters of 340B Health with timely updates and discussions about the 340B drug pricing program. The podcast helps listeners stay current with and learn more about 340B to help them serve their patients and communities and remain compliant. We publish new episodes twice a month, with news reports and in-depth interviews with leading health care practitioners, policy and legal experts, public policymakers, and our expert staff.
Speaker 1 (00:04):
Welcome to 340B Insight from 340B Health.
David Glendinning (00:13):
Hello from Washington, DC, and welcome back to 340B Insight, the podcast about the 340B drug pricing program. I'm your host, David Glendinning with 340B Health. Our guest today is Maureen Testoni, the president and CEO of 340B Health. We have seen numerous key developments for 340B recently, including legislative action and hearings on Capitol Hill, state laws affecting the contract pharmacy dispute, and regulatory moves by federal health officials. We regularly invite Maureen on the show to get our listeners up to speed with 340B activity and the community's response to it. I recently sat down with her to discuss.
(00:56):
I'm here with Maureen Testoni, president and CEO of 340B Health. Maureen, thank you for being here and welcome back to 340B Insight.
Maureen Testoni (01:06):
Thank you, David. It's great to be back. Thanks for having me.
David Glendinning (01:09):
You were a guest on the show back in June, and we've had a busy summer for 340B since then. What has been going on?
Maureen Testoni (01:18):
A lot of things have been going on, David. There's been some really interesting and effective action in states on the contract pharmacy issue. We've also seen some movement on federal legislation that would impact 340B. We've seen an interest by some in Congress on 340B playing a role in drug shortages, also seeing a new government plan for repaying hospitals that were impacted by Medicare 340B cuts. And finally, we're seeing federal officials that are starting to implement the Inflation Reduction Act, and that's going to have some big impact on 340B in the future as well.
David Glendinning (01:57):
Great. So here in Washington, DC, we often focus on the federal government, so let's mix it up a bit. Let's start with state activity in the ongoing dispute over 340B contract pharmacies. What have the states been up to?
Maureen Testoni (02:11):
It's been really interesting to watch over the years, David, because we've seen so much support in states for 340 B. For example, more than half of the states have enacted legislation to prohibit payers from discriminating against 340B providers by paying them less than they would pay to non-340B providers. And a couple of states have passed legislation that say to the manufacturers, you cannot refuse to offer the 340B price at those contract pharmacies. In Arkansas, their law went into effect in 2021, Louisiana took effect earlier this year, and it's been a really interesting development because what we were seeing is a couple of drug companies have already changed their policies because of the laws. Merck has partially lifted its contract pharmacy restriction in both states. Teva suspended its restrictions in Louisiana. This is a very positive development and shows how important 340B advocacy is at the state level.
David Glendinning (03:13):
Okay, so some positive action coming out of the south for 340B with Arkansas and Louisiana. What are the next steps for these state laws on 340B contract pharmacies?
Maureen Testoni (03:26):
The Pharmaceutical Research and Manufacturers of America, PhRMA, the association of some of the manufacturers, has filed lawsuits in federal courts, saying that the laws are unconstitutional. If the lawsuits were to go in PhRMA's favor, then we could see Merck and Teva reinstate the restrictions that they've loosened since that law was passed. However, we believe at 340B Health that the states are on very strong legal footing and we're really closely monitoring the activity to make sure that the hospitals are heard. We will be submitting amicus briefs in these lawsuits as well.
David Glendinning (04:05):
Now let's turn back to DC and Capitol Hill. How has Congress been getting involved in the 340B debate in recent months?
Maureen Testoni (04:15):
Various committees have been addressing a number of healthcare issues, including pricing transparency and PBM reform. They all worked on various bills earlier this year, they passed them out of committee, and then the House committee leaders packaged all of those together and recently introduced it with the idea that it would come to the floor later this year. Now one provision in this really big package of legislation is directly impacting 340B, and that has to do with Medicaid managed care payments. Right now in several states, Medicaid managed care organizations will pay 340B-covered entities more than the purchase price for the drugs. There was a provision in the bill that would have prohibited Medicaid managed care companies from doing that and required that 340B providers would only get paid the purchase price for those drugs. We were able to demonstrate how damaging that would be for the states that allow higher reimbursement, and so that was reinstated into the legislation. However, the legislation also now requires that anybody who's getting more than the 340B purchase price must report that difference to the federal government, and it would allow the federal government to post that information and make it public how much more an entity was getting paid.
(05:36):
Another provision that passed out of one of the committees, but actually was not included in this comprehensive healthcare package that is expected to head to the floor, is a bill that was introduced by Congressman Bucshon and would have required a lot of additional reporting by 340B hospitals and potentially other covered entities. It would also have given the government additional audit authority around the area of determining how 340B savings are being used by covered entities. They would be required to report data that related to the hospital and then separately for each and every child site. What they were required to report on really didn't have anything to do with the 340B program's intent of stretching resources. That did pass out of the Energy and Commerce Committee, but we are pleased that it was not included in this big comprehensive package that the committee leaders are using to move the other healthcare provisions. Now, even though it was not included in that package, we are keeping a very close eye on whether or not it could be offered as an amendment on the floor or it could otherwise be inserted into the package before it reaches the floor.
David Glendinning (06:54):
Okay. We'll be keeping an eye on that as it starts coming potentially to a floor vote. Are there any other House bills that 340B Health has been tracking?
Maureen Testoni (07:04):
There was a very recent development, David, where 340B is being linked to this issue of drug shortages. What we saw recently was a bill from the majority Energy and Commerce Committee that would remove certain generic sterile injectables, those that are made by multiple manufacturers, would remove those from 340B entirely and the idea being that then there would not be a discount and that would somehow fix the shortage issue. However, when we look at the data, we see that in general, 340B is a low volume of generic sterile injectable drugs, so we do not believe it would have, really, any impact on the overall issue of drug shortages. We also do not believe that shortages are caused solely by this issue of price and by the issue of discounts. There have been so many examples of things that have caused problems, such as quality issues, that resulted in shutting down manufacturing plants and that type of thing. We have been active on advocacy there as well, in terms of urging the chairwoman of the Energy and Commerce Committee, Chairwoman Rogers, to remove the 340B provisions from any drug shortage measure.
David Glendinning (08:27):
Good. I think that covers the House side of the capital complex. How has the Senate been focusing on 340B issues during this legislative session?
Maureen Testoni (08:38):
The Senate has similarly been working on legislation on PBM issues and pricing transparency issues, just as the House, and they also looked at the 340B Medicaid issue in terms of whether to limit payments by Medicaid managed care entities to the 340B price. However, their version did not do that. It does require reporting of the difference if, in fact, you do get paid more than the 340B price, but it would not require any of those reports to be public. Very interesting development in July, where a group of six Senate Republicans and Democrats submitted what they call a Request for Information, or RFI on 340B. RFIs have become relatively popular in Congress as a way of determining how to move forward on a specific type of issue. In this situation, the RFI, Request for Information, was issued and the senators really cited the contract pharmacy restrictions as a concern of theirs, where they're hearing a lot of issues on it, but they also addressed, asked for information on some other 340B issues.
(09:53):
340B Health certainly responded, as did a lot of other hospital associations and our member hospitals, and we understand that they received, actually, hundreds of responses to their RFI, which we think is fantastic. RFIs can result in potential legislation. They can result in letters to the administration. They can result in a hearing. That's really what we will be looking for as some types of next steps by those six senators in response to the RFI.
David Glendinning (10:24):
Maureen, when we last checked in with you in June, there were some open questions about the Medicare 340B cuts that were in place from 2018 until 2022, and that the US Supreme Court decided were unlawful. Where do things stand with that?
Maureen Testoni (10:42):
The Centers for Medicare and Medicaid Services, which is the government agency in charge of this issue, they have actually proposed a plan to pay back hospitals using a manner that we were very supportive of. They were planning to issue lump sum payments to the 340B hospitals later this year or early next year to cover the amount of money that those hospitals were wrongfully denied, due to the unlawful cuts. It's really going to cover the difference between what they received from 2018 to 2022 and what they should have received. Plus, it's going to include the beneficiary cost-sharing payments that they also did not receive. We were pleased to see them do that.
(11:26):
However, what we're not pleased about is that they also are proposing to take back some Medicare reimbursement from hospitals as part of this whole plan, and that's because when they cut payment to 340B hospitals, they did it in a way that they refer to as budget neutral. Since they are now repaying 340B hospitals, they believe that they have to take the money back that they paid for other Medicare Part B goods and services. However, those reductions would take about 16 years and would be spread out across both 340B and non-340B hospitals. In our comment letter that we sent to CMS earlier this month, we made that clear how much we really support the lump sum payment, but we still do not believe that they have to make these cuts.
(12:19):
Another point that I wanted to just mention here is, although CMS is saying that they're going to make these lump sum payments, we're also concerned about the Medicare managed care plans. Many of them also reimbursed 340B hospitals at the lower rate that CMS was using and we're really calling on CMS to make sure that they make clear that those entities should be making repayments to hospitals as well. The rule has been proposed, public comments have been submitted, so we're expecting to see a final rule that's outlining definitively what CMS is going to do, hopefully within the next few months.
David Glendinning (12:56):
In recent months, we have seen significant news coverage of the Inflation Reduction Act, which we know has 340B implications. What is 340B Health watching for as CMS implements this law?
Maureen Testoni (13:13):
There's two main issues that I think about when I think about the Inflation Reduction Act, or the IRA, and the impact on 340B. One is going to be financial. It's going to have a negative financial impact on 340B hospitals. CMS is going to be choosing drugs that are going to be subject to basically a price cap and that is going to then have an impact on 340B savings, because even though you'll still get a 340B discount for the drugs when they're used for Medicare, the discount is not going to be steep enough to make up for how much the price for these drugs are going to go down. We are expecting that this is going to have an impact on 340B savings for hospitals. That could be in the billions of dollars over a period of several years. We're in the process right now of modeling how this is going to affect 340B savings and developing a model that 340B hospitals are going to be able to use to help make their own projections.
(14:17):
We're also monitoring and working with CMS on how this is going to be implemented from an administrative perspective, because it's going to be important for CMS to be able to know whether or not drugs used for Medicare patients were purchased at 340B. This has to do with calculation of various rebates, for example, for 340B. There are issues about whether or not 340B hospitals are going to have to be able to identify at the point that they are billing CMS, whether or not a drug was 340B, which is very, very difficult for 340B hospitals to do. We're working with CMS and we're doing advocacy on that issue to try to come up with a mechanism that will be workable for 340B hospitals.
David Glendinning (15:05):
Clearly a lot going on in 340B. I'm hearing legislative, administrative, judicial. How is 340B Health ensuring hospitals are heard on all these various issues?
Maureen Testoni (15:19):
Over the years, we've developed a number of congressional champions on 340B. These are members in Congress that really understand how important 340B is to their hospitals and to their communities. We work very closely with them and, really, with educating all members of Congress, especially new members of Congress as well, on 340B and helping our members to do the same, because that's who they really want to hear from. We also submit comment letters to the administration on all issues affecting 340B. This would be, for example, on the issues I mentioned around that CMS is working on with the IRA and Medicare Part B, but we also submit a lot of letters to HRSA, the agency that oversees 340B, to let them know about, for example, different things that manufacturers are doing that we believe are not consistent with the 340B statute.
(16:14):
We're also active in the 340B-related court cases. We file amicus briefs to counter information that we believe industry submits to courts that we do not believe accurately portrays 340B. Starting in July, we launched a major advocacy campaign and then in the fall we were joined by our hospital and Pharmacist Association partner, so that campaign is still going on. It's called Because of 340B, and it's really serving to raise public awareness on all of the patient care and support that hospitals can provide because of 340B savings. We're educating the public about 340B. We're educating policy makers about 340B so that ultimately, we can continue to ensure that 340B is there to support safety net providers for decades to come.
David Glendinning (17:08):
Our listeners are the 340B community. They are often 340B hospitals and many of them are our members. What can that community be doing to aid in this process to help protect 340B?
Maureen Testoni (17:23):
I really have to thank the 340B community tremendously, because it is really because of you that we have the support we have on 340B and we are seeing it 30 plus years later be such a source of support for safety net hospitals. There's so much that you can do in this space, so certainly making sure that you are meeting with your congressional offices to explain what 340B is and to invite them to tour your facility. We find that when members are touring a hospital and you're really explaining to them how 340B comes into play, that can just turn a light on in somebody's mind because they're really seeing 340B in action. As part of that process, we strongly encourage our members to fill out our 340B impact profiles, which really list all the different things that you are doing to help provide services to your low-income patients or your rural patients, and it helps to show how, if you didn't have 340B, all the things that could really be potentially at risk.
(18:28):
You can also send comment letters and emails to members of Congress and to the administration when they're considering specific 340B issues. We put out template letters that people can use. We are launching a series of bootcamp webinars to learn more about 340B. That can be very helpful, especially for people in hospitals that are new to 340B to really get a better sense of the landscape. We also participate in two major 340B conferences a year. They are the largest get-together of 340B stakeholders in the country. They are called the 340B Coalition Conference. Really strongly encourage you to attend those. You get to meet with lots of other 340B providers, as well as others involved in 340B that can help you administer your own 340B program and you get up to speed on what's going on in 340B. Our next conference is going to be in San Diego in late January, so I really encourage people to take a look at that and join us.
David Glendinning (19:31):
Well, Maureen, we always appreciate your time and for bringing our audience up to speed on all things 340B. Thank you again for joining us.
Maureen Testoni (19:40):
Thank you so much for having me, David. I really appreciate it.
David Glendinning (19:43):
Our thanks again to Maureen Testoni for giving us her rundown of the latest developments in 340B. We plan to have her on the show again later this season to hear her take on what transpires in the coming weeks and months. Maureen encouraged our members to sign up for the ongoing 340B bootcamp webinar series. You can visit the events page on 340B Health's website for all webinar information. 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 (20:21):
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 @340BHealth and submit a question or idea to the show by emailing us at podcast@340Bhealth.org.