This week we are joined by Maureen Testoni, 340B Health’s president and CEO. Maureen provides her expert analysis on the top 340B developments from the first quarter of 2021. The conversation includes the latest on drug manufacturers denying 340B discounts on drugs dispensed at community pharmacies, attempts to turn 340B into a rebate program, and payers and pharmacy benefit managers making mandatory changes to their claims processes. Maureen also shares positive recent developments on advocating for 340B.  

Updates on the Community Pharmacy Issue

The Department of Health and Human Services (HHS) has indicated that drug manufacturers are violating the law when they refuse to provide 340B discounts on drugs dispensed at community pharmacies. Maureen explains that she is encouraged by new HHS Secretary Xavier Becerra’s statements in support of 340B but that advocacy needs to continue on this issue to ensure the secretary and the department move forward with enforcing the 340B statute. One factor is the 340B administrative dispute resolution (ADR) process. The ADR process was created to resolve individual disputes between covered entities and manufacturers. However, because HHS has made it clear through an advisory opinion and in other court filings that drug manufacturers are violating the law, Maureen believes that the community pharmacy issue is not appropriate for the ADR process. ADR panels have not yet been appointed, and they will take longer to resolve the issue. Meanwhile, hospitals will continue losing 340B discounts every day. Maureen recommends that hospitals file overcharge notices with the Health Resources & Services Administration (HRSA) to demonstrate the harm caused by these restrictions and continue documenting all losses when refused 340B discounts. Hospitals also should continue contacting their members of Congress to ask them to reach out to the new administration on this issue.

Attempts to Turn 340B Into A Rebate Model

Maureen explains that while no concrete action has taken place, Kalderos, a drug manufacturer consultant, is marketing a new rebate system where 340B discounts are not provided when the drug is purchased but are later given as a rebate. This would result in higher upfront costs and would put covered entities at risk for a loss of access to 340B savings should the manufacturer not grant the rebate. 340B always has operated as an upfront discount per the direction of HHS, so 340B Health is advocating that HHS prevent this proposal from moving forward, Maureen explains. 

Payers and PBMs Making Mandatory Changes to Claims Processes 

Express Scripts recently notified 340B hospitals that they want providers to identify which claims are 340B. The company says this can be done either by placing a modifier on the claim when dispensing the drug or retroactively by using a transaction known as N1. While Express Scripts has said they are not planning to reduce reimbursements, Maureen explains that it is concerning that the company gives no clear reason why 340B drug claims must be identified and treated differently than non-340B drugs. 340B Health and the 340B Coalition, representing 340B providers at different types of covered entities, have written to Express Scripts about the concerns with this issue. 340B Health also has been communicating concerns about the policy to members of Congress.  

Separately, Humana has notified 340B hospitals about plans to reimburse hospitals less for 340B drugs than non-340B drugs, which undermines the intent for safety-net hospitals to provide more care to low-income and rural populations through 340B savings.

Positive Developments on Advocacy

Maureen discusses 340B Health’s recent Virtual Hill Day, which included more than 300 individuals from 340B Health member hospitals meeting with more than 250 congressional offices. 340B Health members focused on all the issues Maureen analyzed earlier in the episode, including Medicare Part B cuts to 340B hospitals and DSH hospitals losing 340B eligibility due to the pandemic. 340B Health members shared Impact Profiles about their 340B savings and how they use them. Maureen also gives a preview of what to expect at the 340B Coalition Summer Conference in July.

Check out all our episodes on the 340B Insight podcast website. You also can stay updated on all 340B Health news and information by visiting our homepage. If you have any questions you would like us to cover in this podcast, please email us at [email protected].

Resources 

1. New York Delays Medicaid Pharmacy Benefit Transfer for at Least Two Years
2. Stop 340B Cuts – Drug Manufacturers Are Refusing to Provide Required 340B   Discounts
3. Express Scripts Granting Extensions on 340B Claims ID Mandate 
4. 340B Health Virtual Hill Day Video 
5. 340B Coalition 2021 Summer Conference