340B Drug Discount Program: Here’s What Patient Advocates Need to Know
The 340B Drug Discount Program for years has had little attention, aside from a few Congressional Hearings. As we cited last month in a blog, 340B program purchases has more than quadrupled in the last decade, now exceeding Medicaid’s outpatient drug sales. This growth has disturbed the bargain made between manufacturers, providers, and lawmakers in 1992, often leaving patients out of the benefit meant to be gained by the program.
Because 340B is an exceedingly nuanced payment system design, lawmakers have been reluctant to touch the issue – fearing a need to “crack” into the legislation, lacking agreement on how to proceed, and having to balance interests that are often in conflict – preferring to leave the management of issues arising around 340B to the Health Services Resources Administration (HRSA), which then has the unfortunate duty to remind lawmakers, the agency’s statutory authority is limited, and their budget is not large enough for more meaningful oversight. As administrations change, so do the perspectives on how to ensure the intent of 340B, making sure poorer patients can afford and access outpatient medications and the care required to acquire those medications, is captured in how the programs actually operates. Leaving us with the current situation of competing interpretations and interests heading to the court system to find answers and settle disputes.
Part of this program growth is driven by hospitals as a type of “covered entity”; a 2015 analysis showed the program having grown from about 600 participating in 2005 to more than 2,100 hospitals in 2014. In fact, a 2018 Government Accountability Office report found “charity care” and uncompensated care provided by hospitals receiving 340B revenue had steadily been decreasing over the years. The Affordable Care Act has something to do with that – in extending Medicaid eligibility, the Medicaid qualified population grew and as enrollment grew, so did the amount if “disproportionate share” of Medicaid patients certain hospitals served. Ultimately, this meant more hospitals qualified for the 340B Drug Pricing Program than had prior to the ACA.
Another reason for program growth is an expansion of definition of “covered entities” to include contract pharmacies – which have grown as an industry – used by federal grantees like federally qualified health centers (FQHCs) and hemophiliac clinics. Tim Horn, director of the Health Care Access team at the National Alliance of State and Territorial AIDS Directors, described why it was necessary for this expansion, in particular to Ryan White clinics, serving communities affected by and vulnerable to HIV as opposed to limiting program qualification to those pharmacies run and owned by clinics themselves, “340B contract pharmacies are vital to Ryan White and other safety net providers for a couple of important reasons: they help ensure equitable access to affordable medications by uninsured clients, including patients who might live too far from a program's in-house pharmacy, and they help programs maximize their ability to generate essential revenue on prescription fills for insured clients.”
Regardless of entity type, most patients access care through a “payer” (health care insurance provider, be they public – like Medicaid managed care organizations – or private), who play a central role in the 340B payment system design. In turn, this means “pharmacy benefit managers” (PBMs - who sometimes also own the contract pharmacies in question) also play a central role, by designating schemes for how providers are reimbursed for care they’ve provided or medications that have already been dispensed. Jeffrey Lewis, a board member of Community Access National Network and President & CEO of Legacy Health Endowment, described how some PBMs engage in discriminatory practices by paying for 340B drugs at lower rates than non-340B drugs, reducing the benefit Congress intended to give 340B hospitals and clinics:
“340B providers receive less revenue than if 340B drugs are reimbursed at normal non-340B rates. That loss of revenue results in 340B providers having less money to underwrite the cost of providing uncompensated care, including serving uninsured or underinsured patients or providing services that insurers do not reimburse. PBMs, on the other hand, retain the difference between the 340B and non-340B payment rates for themselves. This program "benefit", which was intended to go to non-profit safety net providers, ends up going to for-profit PBMs instead. In this manner, PBMs' payment policies prioritize PBMs’ for-profit interests over 340B providers' non-profit missions to support public health.”
The center of one of the most pressing actions to date is “who’s job is it to make sure the rules are being followed?” with manufacturers being the first to move – by way of seeking the ability to require entities wishing to participate in 340B to provide additional claims data. Lewis points out that in a unanimous Supreme Court decision in 2011, courts had previously interpreted covered entities as lacking authority to seek enforcement against manufacturers, so the same must be true in reverse, requiring all parties to use a dispute resolution process dictated by HRSA. Indeed, the ruling even goes so far to cite the ACA’s directive for HRSA to issue a formal “alternative dispute resolution” process. However, HRSA failed to formalize this process in a final rule until December 2020. That rule is now part of a patch work of suits from manufacturers looking to the courts for clarity, with manufacturers arguing that statutory enforcement can’t be one-sided – if manufacturers must provide these discounts, someone should be ensuring the entities receiving these discounts are actually using them for patients and HRSA, by their own admission, doesn’t have the capacity to do so. Of note, Justice Ginsburg, who pinned the 2011 ruling in Astra USA, Inc., noted HRSA’s failure to bilaterally enforce the rules did not necessarily provide for a right of action by 340B actors.
Nonetheless, 340B remains a critical source of revenue for Ryan White clinics and other federal grantees already meeting the legislative intent of the program, at least generally better than other payer and provider actors in this scheme. As a result of sustainable federal funding and legislators prioritizing public health funding, federal grantees are scrambling – and manufacturers should consider how best to not harm the “good guys” in what ever actions taken next. Indeed, NASTAD’s Tim Horn stated:
“340B program revenue will always be an important – and dynamic – supplemental funding source for our HIV care programs, particularly where Medicaid has not been expanded and where federal and state funding is both limited and inflexible. A number of factors that have real or potential impacts on 340B…are now requiring serious discussions regarding the sustainability of program revenue generation. Simply put, we're not going to end HIV as an epidemic without significant and nimble funding required to support the myriad medical and support services associated with the best possible health outcomes. 340B revenue is a substantial part of this and, absent alternative funding streams to ensure that these programs remain whole, will remain the lifeblood of HIV service delivery in the United States.”
Legacy Health Endowment’s Jeffrey Lewis agreed:
“The value and importance of the 340B program are well known. However, where there is ambiguity, it impacts both covered entities and patients. With the positive growth of covered entities to serve more people in need, Congress must take a thorough look at why 340B was created, its absolute value and tackle the tough questions where ambiguity may exist. Clarity is needed now more than ever to stop pharmaceutical companies from indiscriminately deciding whether and how to participate and prevent jeopardizing patients' lives. Similarly, Congress has an obligation to evaluate the role of PBMs and Third-Party Administrators (TPAs) operating in the 340B space and set a specific rule regarding revenue sharing. The 340B program was created to aid covered entities in serving more people in need. Unfortunately, every dollar taken by PBMs or TPAs reduces the ability of covered entities to care for more and more patients.
Clear legislative intent and rules are critical to ensuring program stability and, ultimately, safety net provider stability. Ryan White Centers, Hemophilia Centers, FQHCs, and rural hospitals as particularly vulnerable to Congressional, HRSA, and OPA ambiguity. The current and future failure to clarify the uncertainty of the 340B program jeopardizes patients and the financial stability of covered entities.”
While the finger-pointing on “who’s at fault” for an unsustainable program growth rages on and works its way through both the courts and the minds of lawmakers or who is responsible for drawing the lines in which manufacturers, providers, and payers can color inside of, the only thing clear is the population this program is meant to serve is not receiving as much benefit from the program as it should. We could say “patients” here, but that word apparently needs to be defined with regard to 340B. In the end, all stakeholders, outside of lawyered language, know exactly who has been harmed by bad actors in the 340B landscape. Everyone with power in this minefield would do well to remember that.
We invite you to download the 340B Final Report, issued by the Community Access National Network’s 340B Commission.
Modeling Navigation: Hepatitis C Toolkit for Improving Care for People Who Use Drugs
In September 2020, our friends at the National Association of State and Territorial AIDS Directors announced the launch of a new hepatitis C toolkit and navigation model to improve care for people who use drugs (PWUD) and other impacted populations. NASTAD, in partnership with the New York City Health Department, spent 8 years developing this model of care navigation and the associated toolkit and has made an informational training video available to preview the program for interested health departments, providers, and community-based organizations.
The model builds upon what’s now common knowledge: clients often need help navigating complex systems of care, an influx of information, and available support. NASTAD’s training video walks viewers (and prospective partners) through nearly every aspect of the model, from staffing needs to potential funding sources. While standard roles are as expected, including program managers and data personnel, rather than strictly relying on peers, the toolkit specifically delineates between “peer navigators” and “patient navigators”, including suggested job descriptions and distinctions on educational requirements. Notably, the peer role works to support the activities of the patient navigator role (as opposed to supporting case management work directly, as seen in many HIV peer programs). Entities considering the model should note: combining these roles may weaken the efficacy of the program and, given role descriptions, overburden staff assigned to the task. Further, for these roles to be effective, providers will need to be comfortable with an active navigator advocating for and with a client. Those same providers should also note, both navigators are designed to support positive health outcomes for clients and to work in tandem with a client’s provider, including medication adherence support, follow up with provider instructions, and to ensure appointments are attended.
NASTAD’s model envisions a comprehensive approach of assessment beginning at the time of contact (either during outreach or testing activities) and throughout the care continuum. From education to treatment preparedness, the model’s training curriculum and suggested documents prompt both types of navigators to consider their language, a client’s needs in housing, stress management, co-occurring health issues, and encourage actively linking clients to resources that are not necessarily medically based. The model supports this approach from the very design of the program – highlighting the success of (and need for) syringe services programs (SSPs), medication assisted treatment (MAT), addressing maintenance of contact with a client regardless of housing status, and instructing administrators on the necessity of a robust referral network.
The virtual training includes recognition of barriers and evaluation of a case study during COVID. NASTAD notes stigma, access to care, language access, and medication prior authorization are the most common barriers to engagement, retention, and success in care. Challenges include, as we previously noted, a COVID-associated plummet in HCV testing, changes in working hours, the need to access facilities with ever changing rules of access, and technology barriers, especially for homeless clients. Successes include easier access to treatment thanks to flexibilities in insurance approvals, more easily tracking down and following up with clients thanks to “stay-at-home” orders, and easier contact tracing.
Resources at the end of the training materials are either national or based in/from New York City and prospective partners will need to consider adding to or substituting this resource list with their own, more local resources. NASTAD encourages accessing the program’s technical assistance and capacity building assistance teams and those of partners involved in developing program materials (also found in the resources section of the materials).
This model poses an opportunity that may only be limited by the will power of funders and willingness to collaborate in an environment where community-based organizations are encouraged to be everything to everyone. Funders should take note of the extraordinary potential NASTAD’s model offers and support both entities seeking to implement it and those entities implementing partners would need to rely on in order to fulfill the wrap around nature of care and navigation the model envisions.