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

David Glendinning (00:12):
Hello from Washington, D.C. 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 RxStrategies, a clear choice for 340B program management. RxStrategies provides intuitive 340B solutions including robust analytics, high-touch service, maximum savings and unwavering 340B program compliance so their customers can achieve more.

David Glendinning (00:45):
Our guests today are Rodney Whitlock with McDermottPlus Consulting and Jeremy Sharp with Waxman Strategies. We spoke with Rodney and Jeremy who are seasoned experts on health policy, federal politics, and all things Washington, D.C. about the results of the most recent election. There is much more to the election than just the person who will be living in the White House after January 20th. And this is especially true when it comes to the 340B program in 2021 and beyond. But before we go to that interview let's take a minute to cover some of the latest news about 340B.

David Glendinning (01:30):
217 members of the U.S. House of Representatives barely shy of half the chamber signed onto a recent letter to HHS Secretary Alex Azar urging him to halt drug company plans to convert 340B into a rebate program. 340B always has offered upfront discounts on drugs to eligible covered entities. But working with the drug industry consultant Kalderos, some manufacturers are unilaterally moving toward offering the discounts through post-sale rebates instead. The House letter notes that drug companies do not have the authority to make such a major change without HHS approval, and it warns that a 340B rebate model could make it more difficult for some covered entities to access program savings required by law. You can read the full letter in the show notes for this episode.

David Glendinning (02:21):
As we previously reported, Novartis was the fourth drug manufacturer to announce that it would stop offering 340B pricing to hospitals on drugs dispensed to contract pharmacies. That new Novartis policy took effect November 16th, and it stops offering discounts when contract pharmacies are more than 40 miles away from the hospital's parent site. The manufacturer went through with its new policy amid strong opposition from lawmakers, health provider organizations, patient groups, and others.

David Glendinning (02:53):
And Congress is back for a post-election or lame-duck legislative session to wrap up some unfinished business for the year. The chief congressional priority is an agreement on a plan to keep the federal government operating beyond the expiration of the current spending deal in December, but drug pricing issues could be on the table too. We discuss more about the lame-duck session in today's interview.

David Glendinning (03:24):
Now for today's feature interview with Rodney Whitlock and Jeremy Sharp. Rodney is a Vice President with McDermottPlus Consulting, and formerly spent two decades as a congressional staffer including as Health Policy director for Iowa Senator Chuck Grassley. Jeremy is Managing Director at Waxman Strategies, a position he assumed following more than 15 years of experience on Capitol Hill and in the executive branch, including as an HHS deputy assistant secretary and as an FDA deputy commissioner. Our own Kathryn DiBitetto recently sat down with Rodney and Jeremy to harness their combined Washington experience and shed some light on what the recent election results mean for 340B. Let's hear that conversation.

Kathryn DiBitetto (04:12):
Hello everyone. I'm Kathryn DiBitetto with 340B Health government relations team. I'm joined today by two DC healthcare policy experts, Rodney Whitlock and Jeremy Sharp. Rodney spent decades on Capitol Hill as a Republican legislative staffer in the House and Senate, and Jeremy has done the same on the Democratic side of the aisle. Rodney and Jeremy, welcome to 340B Insight and thank you for joining us.

Rodney Whitlock (04:38):
Thank you for having us, I'm happy to be here.

Jeremy Sharp (04:40):
Thank you, Kathryn, I'm glad to be here.

Kathryn DiBitetto (04:43):
Great, we look forward to a lively and informative discussion today. So let's get to it. Rodney, I'd like to start with you. Can you provide us with the historical context of what the last two months of a presidential term typically looks like and do you expect that to differ when it comes to the current president?

Rodney Whitlock (05:05):
This is the first time in Washington in 28 years we've had a president running for reelection lose. That dates back to George H.W. Bush in 1992, so this is a transition unlike others. The previous transitions, the presidents were term-limited so the president and everyone who worked for him knew that this was it, after the election it's time to get a new job. And so it's a different scenario than we're used to around here where people who actually were planning on keeping their jobs now are without them.

Rodney Whitlock (05:39):
And so you have this transition which is going to occur where you have people who are trying to both finish up their jobs and look for their next ones all at once in ways that they may not have anticipated. And it creates a different atmosphere than we're used to here in DC, and we don't know how that's going to play out because we're doing it under unusual circumstances with an election that is still being challenged by the incumbent.

Kathryn DiBitetto (06:04):
That's why so many unexpected changes are ongoing as we speak. I'll turn to you Jeremy for this next question. The president isn't the only one with unfinished business, Congress has many issues to tackle during this lame-duck session. What is Congress expected to consider and pass before December 31st, and do you anticipate legislative action on 340B during the final weeks of 2020?

Jeremy Sharp (06:31):
Well, as Rodney was saying yesterday in a conversation we were having, it's always critical for people who are working in the 340B space to be watchful and paying attention to what's happening because anything can and will happen. However, Congress has a lot on its plate that it needs to resolve before December 11th. It needs to complete the government funding to keep the government's doors open and keep the operations going, it needs to consider whether or not it's going to extend the number of public health programs that are currently set to expire including funding for community health centers and issues like the dish cliff that are going to come into effect here if Congress doesn't act. And then it's got to decide whether or not it's going to do another COVID or economic stimulus package, and there's been some games of chicken happening in Washington on that.

Jeremy Sharp (07:16):
And it has to do all of that in roughly 20 odd legislative days with Thanksgiving coming in between, as members are moving out of offices, as staff are looking for new jobs, and as people are trying to cope with the fact that there's two special elections in Georgia. I would say the likelihood is there won't be legislation affecting 340B Health but we need to pay attention to make sure that we're aware of what's happening.

Kathryn DiBitetto (07:40):
For sure. Let's turn to the president-elect. Once Joe Biden takes the oath of office, what are his healthcare priorities and how will they impact safety net hospitals?

Jeremy Sharp (07:51):
Between his campaign rhetoric and the speech he gave on November 7th when he declared victory and then the speech on healthcare he gave recently we can get a pretty clear picture of what President-elect Biden's priorities will be. He's going to be obviously focused first and foremost on controlling the COVID-19 pandemic. He's also going to be focused on building or rebuilding prosperity in the country as the pandemic has done considerable damage to the economy. He's going to be looking to increase access to healthcare and make it more affordable for American families.

Jeremy Sharp (08:22):
He's going to look to take on achieving racial justice and equality as one of his priorities, and that's been a Democratic priority for some time. But there are a number of places in there, particularly in the space of controlling the pandemic, restoring the economy, increasing access to health and health affordability, and then actually achieving racial justice where you could imagine work on safety net hospital issues being highly relevant to the work at hand and so we'll have to see how that unfolds.

Rodney Whitlock (08:49):
What this election didn't produce was a mandate to deal with what I refer to as newspaper page A1 issues in healthcare. Drug pricing and coverage reform that would take the place is something that we might call a public option. That the one thing we're not going to be spending a lot of time on in 2021 is very heated conversations about reference pricing being put on drugs and providers that would have certainly been the major issue in healthcare after the pandemic throughout 2021. The so-called again, A1 issues, they're not on the table anymore so we will look at healthcare very differently than if the election had turned out to be much more of a blue wave.

Kathryn DiBitetto (09:40):
Thank you. Let's get a little bit more specific and talk about 340B policy. Our listeners are likely wondering what a change in administration might mean for 340B issues such as the recent one where drug manufacturers are refusing to provide 340B discounts at community pharmacies. How might a Biden administration respond to this issue if at all?

Jeremy Sharp (10:03):
I think a Biden administration is going to come in with one basic level difference with the Trump administration, is going to be far less friendly to the pharmaceutical industry and their efforts on the outside. That's even in comparison to a Trump administration which by Republican standards historically was far less friendly to the pharmaceutical industry to start with. Actions like contract pharmacy and the issues of with the Kalderos rebate program and so forth are likely going to be received by Biden administration officials as the industry trying to unilaterally write its own rules and move around the law so I would expect them at some point to try to take some sort of action.

Jeremy Sharp (10:43):
That being said, there's a lot of other issues that are perhaps higher priority for an incoming administration and they will be very focused on standing up this new administration. The question is how soon that will happen and how fast they can take action on it. The other caveat I would give and I'll turn it over to Rodney in a second for further comment is some of the people that are coming back into this Biden administration are going to be some of the officials who were there during the Obama years. And I'll remind our listeners that these were some of the officials who worked on these so-called mega-dents. And so this is an administration that's going to require some education and some and attention just like any administration would.

Rodney Whitlock (11:21):
And I will throw out, between now and January 20th I don't rule out this administration taking action. Let's not completely go to sleep in the idea that just because the current administration hasn't acted, it doesn't mean that they haven't acted yet with regard to what we've seen in the 340B space. Some of the issues may not even be issues when we get to January 20, let's play out those cards first.

Kathryn DiBitetto (11:48):
That would certainly be the best case scenario, Rodney. There is a lot bi-partisan support in the House and Senate for this issue around contract pharmacy and even with groups that are not 340B providers. Let's keep the pressure on and the advocacy going and agree regardless of the administration we're going to keep fighting to overturn these policies. Another issue for many 340B hospitals has been the Medicare Part B cuts that the Trump administration has implemented for several years, could a Biden administration change course on that policy?

Rodney Whitlock (12:24):
Slowly that will have to be addressed in an annual payment policy if the next administration wants to address it, it's not something they just come in and click their heels together three times and it's so. Quick question, Jeremy, how many more metaphors do I get before I get my card punched? Is it like 10 in any interview? What's what is it we usually work with here?

Jeremy Sharp (12:46):
Well, this your 30th card, right?

Rodney Whitlock (12:47):
Oh, okay, that's true.

Jeremy Sharp (12:49):
Then there's the question of whether or not I can go back and try to make whole providers from past years cuts. I think the latter will be extremely difficult to do because the budget challenges this administration faces. And one thing we know is going to become an issue whether policy makers wanted to or not is Medicare solvency. The trust fund is currently slated to become insolvent, I believe, or to exceed its revenues in 2024, I think. And so this is an issue they're going to have to face and any Medicare payment policy is going to have to be considered in light of what it will do to those numbers and those timelines.

Jeremy Sharp (13:23):
But just so our listeners don't go despondently crying into the bathroom after listening to this discussion, I think there's one offsetting issue here which is the pandemic. And I think the Biden administration is going to come in and they're going to come in with an attitude of what do we need to do to shore up the healthcare system, and they're going to be mindful of what policy changes might do to the healthcare system.

Kathryn DiBitetto (13:43):
Let's move down the road to Capitol Hill and let's talk a little bit about the landscape in terms of what if scenarios. The next Congress is looking like it may be divided. Democrats have kept control of the House but have lost several seats. On the Senate side, there are two runoff elections set in Georgia on January 5th. If Democrats win both seats the Senate would be split evenly at 50 seats each and the Democrats would have the majority vote with the vice president being the tie-breaker. Alternatively, Republicans will control the Senate. Assuming Republicans win at least one of the Georgia Senate seats and control the Senate, who are some of the key committee leaders we should be paying attention to? Rodney, I'll turn to you for that one.

Rodney Whitlock (14:34):
I'm going to start at the Health, Education, Labor and Pensions Committee or the Health Committee, which has jurisdiction over the 340B program and it's very important to us from that perspective. The Democrats we would expect to continue to have Senator Murray of Washington as their leader, whether it's ranking member or chair. The options for the Republicans present us with a very diverse group. The senior Republican is Richard Burr of North Carolina. He is currently facing an investigation, it is not clear at this point whether or not he will be cleared to return as ranking member or chair. Richard Burr is someone that over the years has been much more of a friend to the pharmaceutical community and has very strong opinions there.

Rodney Whitlock (15:27):
The next in line at the Health Committee for Republicans would be Rand Paul of Kentucky. Rand Paul of Kentucky is a unique figure in terms of his libertarian views and would be someone we would have a hard time figuring it out exactly where he stands but it would be an adventure. And finally, if Rand Paul chooses not to take that role then next up would be Senator Susan Collins of Maine. This is somebody we've had a very positive relationship with over the years. In the Senate Finance Committee which is not necessarily as important to us as the 340B program but it's much more important in terms of larger payment policy in our space, that will be led by Senator Mike Crapo of Idaho if Republicans hold the Senate and Senator Ron Wyden of Oregon for the Democrats as ranking member or potentially chair. And so those are the players on the field.

Jeremy Sharp (16:22):
In the House the Democrats will retain the gavels though they may have a smaller majority than they do, they definitely will have a smaller majority than they did in the previous Congress. But the leaders will not change in the two key committees in the Senate. On the House Energy and Commerce Committee Frank Pallone will continue to be the Chairman and he has generally been the champion of the 340B program though sometimes nuanced in his approach to it as it intersects with other policies. And then the House Ways and Means Committee which is the analog to the Finance Committee and deals with payment policy, the chairman will be Richie Neal of Massachusetts, who also is returning to the House.

Kathryn DiBitetto (16:58):
Jeremy, what does a divided Congress mean for drug pricing legislation and specifically H.R.3 which was the bill the House passed to address drug pricing in late 2019 which was not enacted?

Jeremy Sharp (17:11):
I think drug pricing is likely to be an issue of debate and discussion in this Congress for sure. I think it's going to be a priority of the Biden administration within the context of those priorities we discussed earlier and I think it's something that Democrats for sure campaigned on and actually several Republicans did as well. As Rodney referred to earlier, the more controversial and dramatic pieces of legislation like H.R.3 are going to face an uphill battle to go all the way through the process. But my expectation is that speaker Pelosi and the Democrats in the House will push that legislation through their chamber and try to set up another debate on it in the side.

Jeremy Sharp (17:45):
And the question will be whether or not the Senate feels the need to go along with it as they face a midterm election where their majority could be at stake or not. And as Senator McConnell has indicated he has a high interest in trying to woo back suburban voters who to some degree defected from the Republican party and this issue might be one that he does. I think the other thing we should not discount is the possibility that the Biden administration will take administrative actions here. Center for Medicare and Medicaid Innovation and CMS has wide latitude to explore new and different ways to reimburse for services and products and so CMI may be used for that.

Kathryn DiBitetto (18:21):
Thank you. Given all of this we've talked about the politics and the policy going into the new Congress, what is your advice for 340B advocates, for 340B hospitals? What should they be doing to protect the 340B program going forward?

Rodney Whitlock (18:40):
Same as we tell you every time, it's your advocacy, it's your nuts and bolts lobbying that you do every time that you connect with a member of Congress, their staff, everything you can do to help people in Washington remember the 340B program provides you with resources to be able to help you accomplish your mission and that's a good thing. That's the thing you have to keep reminding people every time. For some of you I know it feels like, "Wait, what happened to the member of Congress who was just there? Now I got to start all over again." Yes, you do. That's what you do. That's why you're a great advocate because you come back every time and that's why we're as successful as we are because you sell why what we do is so important.

Kathryn DiBitetto (19:31):
Absolutely. And I will add the importance of educating new members. As Rodney said, we're going to have new faces, still undetermined on exactly how many freshmen are coming into the new Congress but there will be a number of new lawmakers who have never even heard the term 340B. So it's going to be up to you to educate them on what it means and how it impacts their district and state, so you can always turn to us for help on that in connecting you with the new lawmakers and their staff. Jeremy, do you want to add anything to that conversation?

Jeremy Sharp (20:05):
The only thing I'd add is that we will also see with the change of administration we're going to see a substantial change in who is staffing members of Congress throughout both bodies. And so you'll have a lot of new staff even for members who may be more familiar with the program, the new staff will need some education and some engagement and they'll all need to be reminded of the importance of the program in the face of the pandemic and any other changes and other debates that are going on.

Kathryn DiBitetto (20:28):
It's going to be a fascinating next 12 months in Washington and Rodney and Jeremy we appreciate you sharing your insights with us. Thank you both so much for joining us.

Rodney Whitlock (20:38):
The pleasure has been mine, thank you.

Jeremy Sharp (20:40):
Thanks very much, Kathryn.

David Glendinning (20:42):
Well, thanks again to Jeremy and Rodney for their valuable insights into how the election might shape the landscape for the 340B program, the healthcare safety net and the providers and patients who rely on them. If you have not yet gotten your health podcast fixed or your fill of metaphors from listening to 340B Insight you can hear more from Rodney and his McDermott colleagues on their podcast. It's called the Health Policy Breakroom and you can check out the show notes to find out how to listen.

David Glendinning (21:11):
Do you have any unanswered questions about the election results after today's episode? 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. We discussed more about the election and its implications for 340B on our recent election webinar hosted by Kathryn and the rest of the 340B Health government relations team. If you missed that event you can access the archive presentation on our website.

David Glendinning (21:44):
And if you missed our first ever 340B Twitter chat last week presented in partnership with the American Society of Health-System Pharmacists, there is still an opportunity for you to engage in the discussion. You can search Twitter for #340Bchat to see how the chat unfolded and to add your perspective to the conversation threads. We hope you and your loved ones have a safe and restful Thanksgiving holiday. We will be back with our next episode in a couple of weeks. Until then, thanks for listening and be well.

Speaker 1 (22:21):
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.