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This week, we are joined again by 340B Health President and CEO Maureen Testoni. Maureen discusses and analyzes major developments for the 340B program that occurred this fall. These include updates on the community pharmacy dispute, legislation on drug pricing, and the U.S. Supreme Court hearing arguments on Medicare pay cuts to 340B hospitals.--
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 (00:05):
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 David Glendinning with 340B Health. Our guest today is Maureen Testoni the President and CEO of 340B Health. As all you regular listeners know, we bring Maureen on the show every few months to get her take on the top issues affecting the 340B program and its participants. Since we last spoke with her in September, there's been no shortage of important developments including in federal courts and on Capitol hill. And we know you are eager to hear her analysis of what it all means for the 340B community. So let's head right to that feature interview with Maureen Testoni. Miles Goldman recently sat down with Maureen to discuss a jam packed fall for 340 B. Here's that conversation.
Miles Goldman (01:06):
Thank you, David. I'm joined by Maureen Testoni, the President and CEO of 340B Health. Welcome back to 340B Insight, Maureen.
Maureen Testoni (01:14):
Thanks Miles. It's great to be back.
Miles Goldman (01:16):
I think we say this every time we speak, but it's been a busy fall for the 340B community. What major developments are you focusing on?
Maureen Testoni (01:25):
Yes, Miles. You're right. This has been a very, very busy fall for those of us that are focusing on really protecting 340B. I would say our number one issue continues to be the ongoing dispute over contract pharmacies. There have been some positive developments and some negative developments. Cases have been filed in four courts, and the government continues to try to use its enforcement authority to stop the drug companies from undermining 340B. But unfortunately, there have been more companies attempting to deny 340B pricing for community pharmacies. So the fight is definitely not over. Then on a separate issue, Congress has been debating legislation on drug pricing that could have an impact on 340B savings. So that's been a focus for us as well.
Miles Goldman (02:14):
Let's dive further into the 340B community pharmacy dispute. You just referenced there have been additional drug companies announcing restrictions. Can you bring us up to speed on the details?
Maureen Testoni (02:27):
Yes. So there are now 10 drug companies that are unlawfully restricting 340B. The most recent companies to announce the restrictions are UCB pharmaceuticals and Amgen. Now, it's important to remember that more than 600 drug makers participate in 340B. So this is still a small minority of the total companies, but these companies are definitely some of the big players. Now we've been heartened by the very strong actions of the Health Resources and Services Administration to tell these companies to stop. And they've even referred some of the companies to the Health and Human Services, Inspector General for the imposition of civil money penalties, which could actually be very steep for these companies. We have to remember that the companies are effectively keeping millions in revenues that is intended to subsidize a 340B safety net. So they're going to fight hard to keep doing this despite the damage that they're causing to patients. So we need to keep up our fight as well, and we definitely are.
Miles Goldman (03:32):
There have also been court cases on the 340B community pharmacy dispute. What have the court said about drug company lawsuits?
Maureen Testoni (03:41):
So the court cases have been very interesting Miles. All of the different lawsuits have been filed in four different courts. So three of those courts have issued decisions. And the good news is that two of those courts have said the companies do not have the right to impose conditions on 340B pricing, and that's huge. But one court ruled in a drug company's favor. Now we think they got it wrong and we are urging the government to appeal that decision to a higher court. So far, with those three cases, the drug companies have appealed the two cases that were decided in the government's favor. And for the case that was sided in the drug company's favor, HRSA has issued a statement saying that it disagrees with that court's decision and it's considering its options. We at 340B Health are strongly encouraging the government to appeal and they must make that decision by early January. That's going to be their deadline by which they would have to file a notice of appeal.
Miles Goldman (04:43):
Well, we'll certainly be keeping an eye on that. Are there courts we are still waiting to hear from?
Maureen Testoni (04:49):
Yes, there is one other court that we are waiting to hear from and the decision could really come at any time. They've already held a hearing. So there's nothing else that needs to be done before the judge can issue a decision. But there's no deadline for action. So we don't know for sure when that decision is going to come. In the meantime, the government has been so consistent and so strong in stating that it really believes these actions are unlawful and defending their authority to enforce the 340B statute. And we are strongly supporting the government in this position.
Miles Goldman (05:25):
There's also a case involving the drug industry consultant, Kalderos. Can you explain more about this court case and what Kalderos is trying to do?
Maureen Testoni (05:35):
This is an important case with implications not just for the contract pharmacy dispute, but also for how the entire 340B program would operate. Kalderos has developed a software product that they're marketing to drug companies that would take drug claims and analyze whether a 340B price is appropriate. Only after that happens, would the hospital receive the discounted pricing? In other words, Kalderos would help its drug company clients change 340B from an upfront discount program, which is how it has operated for the last 30 years, into a backend rebate program.
Maureen Testoni (06:13):
And a backend rebate program would give the drug companies more power over how and when to release 340B savings. More than half the U.S. House of Representatives already wrote to HHS expressing strong concerns about the Kalderos model. So far, only one drug company has publicly announced it would adopt the model that's Clovis Oncology, which sells one very high priced cancer drug, but after pressure from hospitals and other advocates Clovis backed down.
Maureen Testoni (06:42):
However, one thing that has happened that you alluded two Miles, is that Kalderos has sued HHS. So there is a court case pending. And what has happened is that Kalderos has not received approval from HHS to move forward with their rebate plan. And they're suing because they don't believe that HHS can really prevent manufacturers from imposing conditions on accessing 340B discounts. So, in that way, this issue of whether manufacturers could oppose conditions on 340B discounts that Kaldero's case and some of their arguments are similar to what the manufacturers are arguing as well.
Miles Goldman (07:21):
Thank you for guiding us through all these different legal cases, Maureen, what is 340B Health doing as these cases continue to make their way through the courts?
Maureen Testoni (07:31):
We, along with our allies, that's other hospital and pharmacist associations continue to file brief in these cases laying out the damage that these companies are causing. We're also taking steps to make sure the voices of our hospitals are being heard. We're asking hospitals to sign onto a letter to HHS Secretary, Becerra, urging the administration to escalate its enforcement actions against this company's subject to the two federal court decisions that got it right. And then we're also asking on the government to appeal the court decision that got it wrong. Collectively, hospital's voices can be extremely powerful. We're also working with our bipartisan champions in Congress to make sure that they're aware of what's going on and continuing to support HHS and its effort to enforce the law while also keeping pressure on the companies that are breaking the law.
Miles Goldman (08:20):
So you've already mentioned one way 340B hospitals can take action. Let's talk about some other ways 340B hospitals can take actions on the 340B community pharmacy issue.
Maureen Testoni (08:33):
We've been working closely with our member hospitals to make sure that they're filing reports with HRSA whenever they're overcharged or denied a 340B price through contract pharmacies. I can't stress this enough. Hospitals filing those reports are vital to the government's ability to enforce the law and launch enforcement actions against the new companies that are refusing discounts. Despite the fact that the companies are saying they're not going to offer discounts, HRSA, cannot move forward without concrete evidence of harm. I know that some hospitals have already done this, and we're asking you to do it again, but it is vital to the government's efforts here.
Maureen Testoni (09:12):
In addition, it's very important for hospitals to track how these actions are harming them, both financially, so really how much money are the hospitals losing as a result of these actions? But also what does it mean for your patients? Are the cuts making it so that you are less able to provide access to drug discounts for patients? Is it making it less likely for you to open a new clinic? Or maybe to expand services like diabetes assistance, for example? This information is very important for us to have and for you to share with your congressional representatives and your senators. It's just critical to be able to translate what these drug company actions mean in terms of helping serve your low income patients.
Miles Goldman (10:05):
Let's move to discussing some 340B related issues on Capitol Hill. We've heard about Congress including provisions to lower drug prices in the Build Back Better Act. What does the legislation mean for 340B hospitals?
Maureen Testoni (10:18):
The provisions designed to bring down drug prices could have an impact on 340B savings, and it would have an impact certainly on drugs dispensed to Medicare, but the impact on drugs outside of Medicare is less clear. The bill would establish prices that are 25% to 60% lower for 10 of the top spending drugs that have been on the market for multiple years that are currently covered under Medicare part D as well as all insulin products. So those are some big pricing changes to those drugs. And then in later years, they would expand some of those pricing restrictions, which could include part B drugs. So it's pretty clear that that is going to mean lower reimbursement for drugs given to Medicare patients. This could have an impact over time as well on commercial drugs, but that is much harder to predict. Currently these limitations apply only to Medicare drugs, not to commercial drugs, which is a very big change from aspects from prior drafts of this legislation.
Miles Goldman (11:35):
We've also spoken before about legislation to protect 340B eligibility for some 340B hospitals during the public health emergency. Are there any updates you can share about these efforts?
Maureen Testoni (11:47):
There's bipartisan legislation in both the house and the Senate that would prevent hospitals from losing access to 340B because of pandemic related shifts in patient case mixes. We know this is a serious issue for a number of 340B hospitals. Unfortunately, the bill language was not included in the current continuing resolution that keeps the federal government funded, but there will be another opportunity in February to add these provisions into the next government funding bill. Fortunately, both bills continue to gain co-sponsors, including among the leadership of both parties.
Maureen Testoni (12:26):
And our hospital members who are worried about losing 340B, eligibility should continue to call on their elective official to lend their support. In addition, we are strongly urging hospitals that are impacted by this issue to contact HRSA directly and describe how the pandemic is causing you to have this eligibility issue in terms of participating in 340B. We are also encouraging you to ask the government to waive the existing rules to allow you to retain your status as a 340B covered entity at least through this period of a pandemic.
Maureen Testoni (13:06):
We are very, very concerned about the situation that some of our members face, where they cannot participate in 340B due solely to the fact that they had to weather a pandemic and it caused a temporary change in their patient case mix that made them technically not eligible for 340B. I think this is a very big decision. It can cause hospitals to lose potentially close to two years of 340B savings. And we really, really urge the government, either the administration or Congress to rectify this issue.
Miles Goldman (13:41):
Let's move down the street from Capitol Hill to the U.S. Supreme Court. Recently, the U.S. Supreme Court heard oral arguments in a case involving Medicare pay cuts to 340B hospitals. How did it go? What happens next in that case? And what could it mean for efforts to stop the cuts?
Maureen Testoni (14:01):
This case involves a policy adapted in 2018 that cut what Medicare part B pays many 340B hospitals for outpatient drugs by nearly 30%. 340B Health is not a party to the lawsuit, but we agree with the plaintiff that this policy is unlawful and must be reversed. A lower court agreed with our point of view, but an appeals court found CMS has the authority to impose the cuts. The oral arguments were fascinating, and I'd urge you to listen to the recording or read the transcript if you're interested in this. I think the attorney for the hospitals did a great job of laying out why this cut must be reversed. But we won't know how the court will rule until next spring, and possibly as late as June.
Miles Goldman (14:40):
Turning our attention now to 2022. In just about a month and a half, the 340B Coalition Winner Conference will be underway on January 31st through February 2nd. Are there any previews you can share?
Maureen Testoni (14:53):
So it's been two years since we had our last winter conference in San Diego, and we are just so excited to welcome everybody back there in person at the end of January. I do want to note that we are taking COVID precautions, because this is an in-person conference. So all attendees must be vaccinated or provide a negative test, and attendees will be required to upload that information in order to have access to the event. We're very excited to see everybody and we're planning a great lineup of speakers and sessions and many, many great networking opportunities. So I strongly encourage everyone in 340B world to sign up. And I'm looking forward to seeing you there.
Miles Goldman (15:36):
Definitely looking forward to that as well, Maureen. Thank you as always Maureen, for the updates, not only today but throughout 2021. I know we will speak again in 2022. Happy holidays.
Maureen Testoni (15:49):
Thank you. Miles. Happy holidays everyone.
David Glendinning (15:51):
Our thanks again to Maureen Testoni, for getting our listeners caught up on all things 340B. As we close out 2021, and look forward to another exciting year for the program. As always, we recommend you check out the show notes for this episode for more helpful resources on the issues we discussed. That includes the link to the letter to HHS Secretary, Becerra, that Maureen mentioned for those of you whose hospitals have not yet signed on. And we do hope you register for the 340B Coalition Winter Conference taking place in San Diego at the end of January if you haven't already done so.
David Glendinning (16:27):
It will be great to see all of you in person again. This is our final scheduled podcast for 2021 as we will be taking a short break for the year end holidays. Believe it or not, this is our 40th episode since we launched the podcast in May 2020. We remain grateful to you, the listeners, for making the show such a success, and we remain committed to providing you with the 340B information and insights you need as we launch season three in just a few weeks. Please keep those episode ideas and comments coming. You can reach usp at podcast@340bhealth.org. We wish you a safe and joyful holiday season with your loved ones. As always, thanks for listening and be well.
Speaker 1 (17:20):
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.