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Give 340B Discounts to Contract Pharmacies, HHS Tells Pharma

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Pharmaceutical companies must extend 340B discounts to contract pharmacies, the Department of Health and Human Services told the pharmaceutical industry at the end of 2020.

Not so fast, the pharmaceutical industry has replied.

Several pharmaceutical companies have indicated that they are not prepared to assert that they will comply with the HHS directive, which was issued in an advisory opinion that is not binding.

The 340B program, which enables hospitals that serve especially large numbers of low-income patients to purchase prescription drugs at a discount to dispense to such patients on an outpatient basis, has long been a vital tool in the ability of private safety-net hospitals to serve their community.  NASH has long supported the program, doing so most recently in a September letter to members of Congress.

Go here to see the advisory opinion, and to learn more about the industry’s response to the opinion, read the Fierce Pharma article “Feds tell pharma companies to pony up 340B discounts, but it’s unclear whether they will.”

NASH Submits Comments on Proposed Medicare Outpatient Regulation

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NASH has submitted formal comments to the Centers for Medicare & Medicaid Services in response to that agency’s proposed 2021 Medicare outpatient prospective payment system rule.

That rule describes how CMS proposes paying hospitals for Medicare-covered fee-for-service outpatient care in 2021.

Writing on behalf of private safety-net hospitals, NASH addressed the following aspects of the proposed rule:

  • Proposed rate increase.   NASH endorsed CMS’s proposal to raise Medicare fee-for-service rates for outpatient care.
  • The 340B program.  NASH expressed strong opposition to CMS’s proposal to reduce  reimbursement for prescription drugs to 340B-eligible hospitals.
  • Phase-out of the inpatient-only services list.  NASH asked CMS not to phase out the inpatient-only services list.
  • Changes in the level of supervision for selected outpatient therapeutic services.  NASH conveyed its support for proposed reductions in such supervision.
  • The physician-owned hospital exception.  NASH opposed CMS’s proposal to ease the current limit on the expansion of high-Medicaid physician-owned hospitals.

Learn more about NASH’s reasoning behind each of these positions in its letter to CMS on the proposed 2021 Medicare outpatient prospective payment system regulation.

Back Off 340B Cuts, HHS Tells Drug Company

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Eli Lilly and Company is being presumptuous in assuming that the federal government will approve its plan to cease providing some federally mandated prescription drug discounts under the section 340B prescription drug discount program and does so at its own peril, the U.S. Department of Health and Human Services warned the company in a strongly worded letter.

Without addressing the merits of Eli Lilly’s request, HHS found the manner in which the company sought to force the federal government’s hand on the matter to be unacceptable.  HHS also questioned the timing of the company’s request in its recent letter, writing that

…we believe the timing of your pricing changes is, at the very least, insensitive to the recent state of the economy.  Although the economy is rebounding at a record rate, the unemployment and under-employment rates are still temporarily higher than at the beginning of the year due to COVID-19.  Many Americans and many small businesses have had difficulty making ends meet.  Lilly, on the other hand, seems to be enjoying an outstanding year.

The HHS letter also observes that

…during this same period, most health care providers, many of which are covered entities under section 340B, were struggling financially and requiring federal assistance from the Provider Relief Fund established by the CARES Act.  Many continue to struggle and depend on emergency taxpayer assistance.  It is against this backdrop that you are effectively increasing the price of 10 mg and 20 mg Cialis by more than 500,000 percent and have done the same for other drugs in your portfolio.

The 340B program, which enables hospitals that serve especially large numbers of low-income patients to purchase prescription drugs at a discount to dispense to such patients on an outpatient basis, has long been a vital tool in the ability of private safety-net hospitals to serve their community.  NASH has long supported the program, doing so most recently in a letter earlier this month to members of Congress.

The HHS letter to Eli Lilly and Company – one of five companies attempting to redefine 340B requirements – concludes with a warning that should the company proceed with its plan, doing so could result in legal action “…in the event that Lilly knowingly violates a material condition of the program that results in over-charges to grantees and contractors.”

Go here to see the HHS letter to Eli Lilly and Company.

NASH Asks Congress to Help Prevent Attempt to Undermine 340B

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Pharmaceutical companies are attempting to prevent safety-net hospitals and others from receiving the full benefits of the section 340B prescription drug discount program and the National Alliance of Safety-Net Hospitals is asking members of the House of Representatives to sign a congressional letter to Health and Human Services Secretary Alex Azar asking to him intervene and stop the pharmaceutical companies.

In asking members of Congress to sign onto the bipartisan letter, NASH notes that

The 340B program is essential for private safety-net hospitals and others like them throughout the country, enabling them to obtain discounts on prescription drugs they dispense on an outpatient basis to qualified, low-income patients.  The program greatly enhances the ability of hospitals to serve their low-income patients and does not cost taxpayers a single dime, but in recent weeks several pharmaceutical companies have taken steps to prevent hospitals from receiving the prescription drug discounts that Congress clearly intended when it created the 340B program nearly 30 years ago.

Learn more about the 340B problem and what NASH and others are asking Secretary Azar to do to help in this NASH message to members of Congress.

 

340B Benefits in Jeopardy?

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340B discounts appear to be in jeopardy as pharmaceutical companies make it more difficult for qualified hospitals to get access to discounted prescription drugs.

One pharmaceutical company reportedly will stop offering discounted drugs to contract pharmacies; another proposes limiting sales of certain medications; and yet others may require claims from contract pharmacies.

Providers that serve especially high proportions of low-income patients are eligible to participate in the 340B program, which provides discounts on prescription drugs that they dispense to outpatients.  Most private safety-net hospitals participate in the 340B program and consider it a vital tool in serving the many low-income residents of the communities in which they are located.  NASH has urged Congress to protect the program, doing so most recently in this July letter to Senate leaders.

Learn more about the challenges providers face in ensuring their continued access to discounted prescription drugs for their low-income patients in the Fierce Healthcare article “Drugmakers getting bolder in fight over 340B drug discounts.”

Court Supports HHS on 340B Cut

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The federal government may institute a nearly 30 percent cut in payments to some hospitals for prescription drugs, a federal court has ruled.

The cut, to the 340B program, was first proposed in 2017 the Department of Health and Human Services but has been blocked by the courts ever since.  Last week, though, a federal appeals court paved the way for the reduction.

Hospitals that serve especially large numbers of low-income patients participate in the federal 340B prescription drug discount program, which gives them discounts on prescriptions they distribute to low-income outpatients.  Under the program, participating hospitals are then supposed to use the savings they derive from the discount to provide additional services to low-income residents of their communities.

Several hospital groups sued when HHS first proposed the cut, arguing that the agency was exceeding its authority.  In last week’s ruling the court concluded that

At a minimum, the statute does not clearly preclude HHS from adjusting the [340B] rate in a focused manner to address problems with reimbursement rates applicable only to certain types of hospitals.

The cut will cost participating hospitals approximately $1.6 billion, with HHS maintaining that this money will be distributed among other deserving providers.

NASH has long opposed the proposal to cut 340B payments to providers.  In a letter to the Centers for Medicare & Medicaid Services in March on behalf of private safety-net hospitals, NASH wrote that

The 340B program was created by Congress to enable hospitals (and other providers) that serve low-income communities to maximize their resources when working to serve those communities. The program helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for their low-income patients: provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise be unavailable to such patients, and do more outreach into communities consisting primarily of low-income residents. This was the purpose of the 340B program when Congress created it in 1992 and Congress has not modified that purpose since that time. NASH believes that through this proposed data collection CMS is seeking to exert authority it does not have to demand of providers information to which the agency is not entitled.

Learn more about the court decision and its implications in this Fierce Healthcare article.

 

NASH Asks Senate for COVID-19 Help

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Private safety-net hospitals need help with the challenges posed by the COVID-19 public health emergency, NASH wrote yesterday in a letter to Senate majority leader Mitch McConnell and minority leader Charles Schumer.

In its letter, NASH asked for:

  • An additional $100 billion for hospitals.
  • Forgiveness for money provided to hospitals through the federal CARES Act’s Accelerated and Advance Payment Program.
  • Action to prevent implementation of the Medicaid fiscal accountability regulation.
  • An increase in the federal Medicaid matching rate (FMAP).
  • An increase in states’ Medicaid disproportionate share (Medicaid DSH) allotments.
  • A moratorium on changes in hospital eligibility for the 340B prescription drug discount program, Medicare indirect medical education program, Medicare disproportionate share (Medicare DSH) program, and other programs.

See NASH’s letter here.

 

NASH Opposes Proposed 340B Data Collection

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The federal government should not require hospitals to submit new data on their acquisition costs for prescription drugs they dispense to low-income patients through the section 340B prescription drug discount program, NASH has told the Centers for Medicare & Medicaid Services.

In a formal comment letter in response to new data collection requirements proposed by CMS last month, the National Alliance of Safety-Net Hospitals wrote on behalf of private safety-net hospitals that

The 340B program was created by Congress to enable hospitals (and other providers) that serve low-income communities to maximize their resources when working to serve those communities. The program helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for their low-income patients: provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise be unavailable to such patients, and do more outreach into communities consisting primarily of low-income residents. This was the purpose of the 340B program when Congress created it in 1992 and Congress has not modified that purpose since that time. NASH believes that through this proposed data collection CMS is seeking to exert authority it does not have to demand of providers information to which the agency is not entitled.

In the letter, NASH also objected that the proposed data collection would be costly and burdensome for hospitals and is premature because the courts are still considering challenges to CMS’s authority to reduce 340B payments to providers; the latter is why CMS seeks this data.

Go here to see NASH’s formal comment letter to CMS.

340B Déjà Vu: CMS Seeks to Collect Data From Hospitals

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For the second time in four months, the federal government has announced its intention to collect data from hospitals and other providers on what they pay for the prescription drugs they purchase through the section 340B prescription drug discount program.

Last week the Centers for Medicare & Medicaid Services published a notice announcing its intention to collect this data.  Previously, health care interests sued CMS when it attempted in 2018 to reduce payments to providers for drugs purchased through the 340B program and the court ruled against CMS, maintaining that the agency did not have enough data on hospitals’ acquisition costs for the drugs to justify the proposed payment reduction.  The newly announced data collection effort seeks to rectify that shortcoming as the court considers CMS’s appeal of a similar decision in a lawsuit filed after CMS again proposed reducing 340B payments and was again rebuffed by the courts in 2019.

Under federal law, CMS must publish a notice declaring its intention to collect such data and seek input from stakeholders.  For this particular notice, stakeholders have until March 9 to respond.

CMS published a similar notice in September of 2019 announcing its intention to collect similar data.  That data collection never took place.  NASH opposed that data collection proposal in a formal comment letter to CMS, writing on behalf of private safety-net hospitals that

NASH and the nation’s private safety-net hospitals oppose the proposed collection of data involving the section 340B prescription drug discount program for three reasons:

  • we oppose CMS’s continued efforts to reduce 340B reimbursement to eligible hospitals;
  • the proposed data collection would be exceptionally burdensome; and
  • we disagree with attempting to address a matter still being litigated.

Most private safety-net hospitals participate in the 340B program and consider it a vital tool in serving the many low-income residents of the communities in which they are located.

See NASH’s complete comment letter here.

To learn more about CMS’s 340B data collection effort, see the notice it published in the Federal Register and read the Becker’s Hospital Review article “CMS ready to survey 340B hospitals about drug acquisition costs.”

NASH Unveils 2020 Advocacy Agenda

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The National Alliance of Safety-Net Hospitals has published its 2020 advocacy agenda.

To advance the interests of private safety-net hospitals, in the coming year NASH will:

  • Continue to address the major policy challenges of 2019 that had not been resolved as that year ended:  an extended delay of Medicaid disproportionate share (Medicaid DSH) cuts, surprise medical bills, and prescription drug prices.
  • Respond to administration-driven policies such as the calculation of Medicare disproportionate share (Medicare DSH) payments, reduced payments for prescription drugs under the 340B prescription drug discount program, and efforts to reduce Medicaid eligibility and benefits and to limit the means through which states may finance their share of Medicaid payments.
  • Respond to expected judicial decisions addressing the extension of site-neutral Medicare outpatient payments to additional outpatient settings and the implementation of a new public charge regulation.

For a more detailed look at NASH’s advocacy plans for the coming year, see its complete 2020 advocacy agenda.