Eye on 2024: Federal Action on PBMs, 340B, and Telehealth

2024 stands as a pivotal year in federal healthcare policy, potentially overshadowed by a highly contentious and partisan political landscape during an election year. The backdrop includes ongoing budget fights, looming cuts threatening vital healthcare programs, and a shifting balance of power in Congress thanks to at least one member being removed from office and a couple of high-profile resignations, further complicating the path to meaningful bipartisan legislation. Amidst this chaos, key focus areas such as reforms related to Pharmacy Benefit Managers (PBMs) and the 340B Drug Pricing Program, as well as telehealth expansion are at the forefront of potentially significant policy shifts, all while renewed attacks on the Affordable Care Act (ACA) add to the uncertainty of healthcare reform in an election year.

Pharmacy Benefit Managers: Pushing for Transparency and Market Reform

PBMs have come under increasing scrutiny in the U.S. healthcare system, particularly regarding their role in prescription drug pricing. Dominated by just three key players, PBMs face criticism for opaque pricing models and practices that may contribute to rising drug costs. The Lower Costs More Transparency Act of 2023 represents a bipartisan effort to enhance transparency in PBM operations, requiring detailed disclosure of pricing and costs. The future of this legislation depends on whether the Senate will adopt the House version or introduce its own bill, with several Senate committees recently advancing similar proposals.

Experts, including those from the Brookings Institution, caution that while increased transparency is a positive step, it may only modestly impact overall drug costs. The effectiveness of these reforms hinges on addressing the complex relationships among PBMs, drug manufacturers, insurers, and healthcare providers.

The current PBM model, often criticized for incentivizing high drug list prices through 'spread pricing,' is under review. Proposed reforms, like those in the Pharmacy Benefit Manager Reform Act, aim to eliminate spread pricing and ensure that rebates and savings directly benefit plan sponsors and patients.

Additionally, the PBM market's consolidation and “vertical integration” (or self-dealing by another name) raises concerns about market power and its influence on drug pricing. With a few firms controlling a significant market share, PBMs' market power could lead to disproportionate profits, underscoring the need for regulatory measures to ensure fair pricing and competition.

As the healthcare community navigates these reforms, the focus remains on ensuring that changes in PBM operations directly benefit patients, especially those in underserved communities disproportionately affected by high drug costs.

340B Program: Addressing Challenges for Future Reforms

The 340B Drug Pricing Program, essential for providing discounted drugs to healthcare providers serving underserved communities, is at a critical juncture. Facing legal challenges and calls for reform, 340B is under scrutiny, particularly regarding its operational complexities and the definition of a 340B-eligible patient. This definition, crucial in determining who accesses discounted drugs, has been a point of contention, with legal interpretations suggesting a need for broader inclusivity, as noted in Bloomberg Law's analysis.

Advocates, including those supporting people living with HIV, recognize the program's significant impact but seek more direct patient benefits, a sentiment echoed in CANN's blog. The current model's effectiveness in providing direct patient benefits, such as reduced drug prices, is being questioned.

Efforts for greater transparency and accountability are intensifying, with state-level initiatives aiming to ensure that program savings directly benefit patients, especially those with financial barriers to medication access, as highlighted in Avalere's insights. State authority to regulate 340B, however, is still in question as Arkansas and Louisiana face lawsuits around recently passed legislation.

Amidst these challenges, 340B's commitment to aiding underserved communities remains paramount. Collaborative efforts among lawmakers, healthcare providers, and patient advocacy groups are crucial to reform the program, ensuring it continues to provide equitable access to care and addresses key issues like medical debt.

Telehealth: A Defining Year in 2024

2024 is set to be a defining year for telehealth, a sector transformed by the COVID-19 pandemic. This year will witness crucial legislative decisions that could shape the future of access to telehealth services.

At the forefront are policy decisions regarding Medicare reimbursement flexibilities for telehealth, as noted in Modern Healthcare's article. Set to expire in 2024, these flexibilities are vital for the continued viability of telehealth, particularly benefiting small practices and those in rural or underserved areas.

Another key development is the anticipated update to remote prescribing rules for controlled substances. The decisions made will crucially balance the need for accessible care with the regulation of controlled substances, impacting how telehealth can be used for medication prescribing.

As 2024 unfolds, the healthcare community faces the challenge of navigating these legislative and policy changes to maximize the benefits of telehealth in patient care and access.

Budget Battles: Critical Healthcare Advocacy Amid Congressional Challenges

The intense budget battles in Congress, underscored by proposed cuts in the House L-HHS Appropriations Bill (H.R. 5894), are central to healthcare advocacy. These cuts, amounting to $767 million, pose a significant threat to essential HIV/AIDS programs, risking the reversal of years of progress in treatment and care. These programs are not just healthcare initiatives; they are vital lifelines providing necessary medications and support to individuals living with HIV.

The Coalition on Human Needs has expressed grave concerns about potential severe cuts to non-defense discretionary appropriations (NDD) for fiscal year 2024, which could drastically impact a range of vital services. In their sign-on letter to Congressional leaders, they warn that these cuts, potentially up to 9% according to the Center on Budget and Policy Priorities, would significantly harm programs essential for public health, education, environmental protection, and more, affecting diverse communities across America. The Coalition advocates for completing the FY24 appropriations process with a bipartisan approach, emphasizing the need to protect these crucial investments that support the nation's most vulnerable populations and uphold the commitment to public health and welfare.

Any major legislative changes will be at the mercy of presidential election year politics, and the congressional balance of power will only make it harder. Issues like PBM reform, or 340B reform, and Telehealth expansion will probably receive a lot of attention via hearings and news clippings, but legislative action remains in doubt.