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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.
Narration [00:00:04]:
Welcome to 340B Insight from 340B Health.
David Glendinning [00:00:14]:
Hello and welcome back to 340B Insight. We are the premier podcast about the 340B drug pricing program and I am your host David Glendenning with 340B Health. Our guest today is Shona Carr who is with Genesis Healthcare System in Zanesville, Ohio. The debate over drug makers’ attempts to impose rebates on 340B covered entities is heating up and there currently are five lawsuits pending in a federal court in Washington, D.C. from drug companies that are trying to impose those rebates and 340B health. And two of our member hospitals recently asked the court to intervene as defendants to help oppose those rebates. And Genesis was one of those hospitals. We wanted to speak with Shona who provided detailed information in memos that supported those motions to intervene.
David Glendinning [00:01:10]:
Before we get to that chat though, if you are listening to this episode, the day came out and happened to be at the 340B Coalition Winter Conference in San Diego. We are here too. So come on by Tuesday or Wednesday morning and visit our lounge in the exhibit hall. You can meet the team and you just might catch an interview in action with some of the 340B experts who are presenting at the conference. And now for our feature interview with Shona. Here's that conversation. I am here today with Shona Carr, who is Director of 340B and Ambulatory Pharmacies at Genesis HealthCare System. Shona, thank you very much for being here and welcome.
David Glendinning [00:01:53]:
Welcome to 340B Insight.
Shona Carr [00:01:54]:
Thank you. Thank you for having me.
David Glendinning [00:01:56]:
Genesis Healthcare System is very well known, not just to 340B health, but also to the loyal listeners of the podcast. Your president and CEO Matt Perry is a member of our board of directors and he was a guest on the Show Back in 2023, I believe, talking about advice he had from a hospital executive for 340B professionals. So for those who may not have listened to that episode in a little while, please tell us a little bit if you could about Gen and the patients you serve there.
Shona Carr [00:02:27]:
Absolutely. So Genesis is located in southeastern Ohio. We're in Zanesville, Ohio. We're a nonprofit DISH hospital. We service six communities counties in our community, 235,000 is our population. We're well below the Ohio averages of the median household income and the poverty levels. So we do our best to service our six county region with our 340B savings.
David Glendinning [00:02:57]:
Let's chat a bit more about those savings. Where do those 340B dollars go. What are some examples of the ways in which Genesis uses its 340B savings to help patients?
Shona Carr [00:03:08]:
This is the part of 340B that I love the most, getting to help the patients. So we have a 340B patient assistance program through our entity owned pharmacies or retail entity owned pharmacies. Patients who qualify financially, qualify at or below like the 400% poverty level can get their out of pocket pay only $5 for out of pocket expenses for their monthly prescriptions as long as they qualify for 340B. We also have a meds to beds program that we also utilize the 340B savings for. We provide drug to the patients as they're discharged if they cannot afford it so that we ensure they can have those prescriptions, you know, to help keep them healthy, keep them out of the hospital. In addition to that, we just started rolling out now. Super excited about it is a paramedicine program. So in addition to making sure the patients have their medicines, those who do not have a way to get back to follow up appointments, we are using our community ambulance service that's also part of Genesis to, you know, stop in and take their blood pressures or take any vitals or tests or blood draws, anything like that that they need for appointments if they cannot make it back in.
Shona Carr [00:04:21]:
We use our community ambulance service to also take patients home when they're discharged if they don't have a way. And you know, the last couple years, I think it's been about a thousand or so people that we've been able, 1,200 people that we've helped, you know, when they're discharged, find a way home. We use our funds all the time. It makes it great, you know, to have those savings to be able to do that kind of stuff.
David Glendinning [00:04:43]:
Yeah, that all sounds great. The paramedicine program in particular sounds fascinating to me. We always love hearing about innovative ways that 340B hospitals can bring their care outside the four walls of the hospital. And I know that was one of the several programs that you mentioned in the memos you submitted to the court about the drugmaker rebate lawsuits, which is primarily what we're here to speak about today. But before we get into some of the details from the memo, I'd like to back up and just ask what prompted Genesis to participate in the motion to intervene in the rebate cases.
Shona Carr [00:05:19]:
Genesis, as you mentioned before, our CEO. I'm very lucky to have a CEO so involved with 340B program and working by my side on that. So we are always willing to help protect the program and do what we can on our part. But I will tell you that when 2020 hit and Eli Lilly first introduced Cialis being the first drug that they were going to take away from the contract pharmacy access, all of us were a little bit hesitant with that. But now we see what it rolled into. There's over 37 drug manufacturers that have taken away contract pharmacy access. Now, Genesis itself, we are in the process of terming any contract pharmacy relationships because there's just no savings left. And it's taken $3 million of our savings that we use on an annual basis to help cover our programs that we provide to our community members.
Shona Carr [00:06:11]:
And so we are all about helping and supporting anything we can do to prevent further action that will reduce our funds to help our patients.
David Glendinning [00:06:19]:
Yes, and certainly we've covered many times on the program since 2020 those contract pharmacy restrictions. And like you said, we have seen how they have spread. You know, with the rebates. It's a little bit of a newer development, but it seems like there's concern that that could become more widespread as well. So if you could break it down for me a little bit more in terms of the projected impact of rebates on Genesis, like, precisely how would drug maker rebates affect your 340B savings?
Shona Carr [00:06:49]:
How they're going to affect us is normally we would buy those drugs with the upfront 340B discount. Instead, we will have to buy them on the WAC account and then submit data for a hopeful rebate on those drugs. And so it, it could really hurt our cash on hand, which also impacts our ability, you know, to borrow money as an organization. And it also could affect our wholesaler agreement if the more manufacturers that require the upfront purchase on wacc, the less cash on hand we have our inability to pay them in our current payment terms, which also increases our drug costs to those manufacturers. It's also going to hurt because all the data that has to be gathered, you know, audited, submitted, then waiting on the rebate, reconciling the rebate payments once they come, and then disputing any rebates when claims are that are not approved, you know, we're going to have to hire additional help. We're estimating, based on our volume, at least two FTEs to ensure that all of that is done and done compliantly and that reconciling those rebates are going to be vital for us to make sure that we are getting that back. So that's Going to take some time.
David Glendinning [00:08:04]:
Okay, so it's not just the carrying costs for these drugs, so to speak, but it sounds like also the ongoing compliance costs that would come along with a new rebate system. Can you give us a sense of what kind of dollar figures Genesis might be looking at for these costs?
Shona Carr [00:08:21]:
We'll use Bristol Myers Squibb as an example. So for them, it would cost us an additional 400,000 per month if their rebate policy went through upfront drug cost spend for their product eliquis alone, it's $28,000 a month that we would have to increase our drug spend. That doesn't sound like a whole lot, you know, in the grand scheme of things, however. But then when you add in another couple hundred thousand for salaries and benefits packages for employees to do that, and it just compounds with more and more manufacturers join. So it's going to be quite costly and greatly reduce our cash on hand. And it'll impact our ability to provide patients with the patient assistance program. If we're not getting that upfront discount, we may not be able to pass it to the patient. If we're not sure how those rebates are going to come back.
Shona Carr [00:09:16]:
If they're going to come back.
David Glendinning [00:09:18]:
Well, thank you for sharing some of those projected dollar figures based on what we've learned about Genesis and its rather slim operating margins. That does sound like a significant financial hit to me. And I expect the dollar figures will be much higher if rebates expanded beyond that example of BMS that you gave. Correct, Correct.
Shona Carr [00:09:39]:
So we are looking at if just the five manufacturers who currently have the rebate policies. We're looking at 1 million per month is what our drug cost would increase at the moment. But if it would spread just like the contract pharmacy policies to all manufacturers, it's going to put us at 5.2 million of extra drug spend each month.
David Glendinning [00:10:02]:
5.2 million per month. Wow. So that's. If all of the drug makers were to go the rebate route. Now, the drug makers would say that this is money that will eventually come back to the, to the 340B hospitals. They say they will process claims and provide rebates quickly. What's your response to that?
Shona Carr [00:10:25]:
I would say that we're deeply concerned about their reliability and consistency of providing those said rebates. You know, there's a lot of uncertainty around it. All the policies that have been released are just a little bit different. And so we don't know with the third party administrators that they're employing to run this how Quickly they will turn around. You know, there's concern around full packages versus partial packages, how long they'll allow a partial package to hang out there. Because if it's not within the 45 days of some of the policies, you know, will we get a rebate on that? There's a deep concern on what we will truly get rebates for and how much we're gonna have to fight to get those rebates.
David Glendinning [00:11:10]:
And you know, at the end of the day, you did mention a little bit more earlier about what this could mean for patient assistance, but I'm curious about some of the other ways in which this might land on Genesys. What would all of this mean at the end of the day for the 340B funded care and support that Genesys provides patients?
Shona Carr [00:11:30]:
I briefly touched on the fact that, you know, with Bristol Myers Squibb, that we would have to evaluate those drugs to see if they could continue being part of the 340B patient assistance program. As this spread, we would have to look at each manufacturer because we wouldn't have those upfront discounts to give patients. Which means most likely if it rolled out and the rebates were not coming back in a timely manner or we were having to dispute a ton of them, we would probably have to discontinue that program. Which means, you know, patients could go from paying $5 a month for their Eliquis to $535 a month for it, which, you know, will significantly hurt our patient population. We will also have to look at our meds to beds program. You know, it currently operates on a negative margin. It's not a profit maker for us, by no means. It's something to help our patients.
Shona Carr [00:12:17]:
And we'll have to look if, you know, that's something we can continue along with all the other free services or community programs that we have out there that the 340B Savings Help Fund.
David Glendinning [00:12:29]:
Genesis is one of two hospitals involved with these memos supporting the motions to intervene in the laws. But obviously not the only two hospitals, 340B hospitals in the nation, that would be affected by rebates. It would affect all of them potentially at the end of the day. So I'm curious as to what advice you might have for those listening from other hospitals as they're thinking about potential rebates. What should they be thinking about for their own hospital?
Shona Carr [00:12:58]:
Absolutely. And big shout out to 340B Health because, you know, working with your team, it's helped me dig in even more to what all we should be looking at. So honestly, if a covered entity hasn't started looking at the impact that the rebate models are going to have on them, I'd recommend that they, you know, scan, review each policy that's out there at the moment, find out which drugs are affected by it, what the terms are for it, start looking, work with their 340B third party administrators, regardless who that is, they should be able to provide reports for each manufacturer of, you know, what they are currently spending on 340B and what it looks like if they'd have to buy those at wacc. Once they start understanding what their drug spend will be, they should then work with their finance team to determine, hey, you know, if we have to spend an extra $5 million a month on our drugs up front, what's that going to do, you know, to our cash flow? Are we going to be okay? What is it going to do with our wholesaler, you know, payment terms? Also look at your contract with your wholesaler, what's your cost minus on WAC vs 340B, is that going to impact you? All kinds of things that you need to look at with your finance team and they need to be made aware. Also this helped me do a big dig in what all we really use to help fund with our 340B savings. Look at all those programs and what may be impacted if the savings went away. Also look at your staffing model, your 340B staffing model. If you're a smaller organization and you only have one FTE assigned, you know, are you going to need more or do you have a big team where you can shift responsibilities around or whatever, but you need to know, are you going to need more FTEs? Which brings me to the last point.
Shona Carr [00:14:46]:
You need to let your steering committee know, your 340B steering committee. Make sure your senior leadership understand what the impact of this, this involves because you may need more resources on your team, you know, you may have more drug expense hitting the budgets, your pharmacy team depending on, you know, some 340B teams work out of finance, some work out of pharmacy. You know, just keep everybody involved. So when, if this does go through, you know where you're sitting.
David Glendinning [00:15:16]:
A lot of considerations to keep in mind. Shona, we appreciate you not just for running through all these details for us, but for taking the time to engage in such a big way on this important advocacy issue. So much of the debate over 340B as you know, is happening now in the courts and these motions to intervene and all the information you provided for the court to consider are a really big deal. So thank you for that and for being here today.
Shona Carr [00:15:43]:
Thank you for allowing us to participate. We really appreciate everything 340B Health does for our community, so thank you.
David Glendinning [00:15:50]:
Our thanks again to Shona, her team at Genesis HealthCare System, and the team at UMass Memorial Medical center in Worcester, Massachusetts, which was the other 340B member hospital that joined us in filing motions to intervene in the rebate cases. You can visit the Show Notes to read some of the supporting memos and I encourage you to do so. 340B Health members can also read more about our ongoing legal strategy on this rebate issue. We will be back in D.C. soon from the Winter Conference and we will be back in a few weeks with our next episode. In the meantime, as always, thanks for listening and be well.
Narration [00:16:36]:
Thanks for listening to 340B Insights. 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.