PhRMA submits comments on ways to refocus the 340B program

3 November 2020

In response to the Request for Input on Modernizing the 340B Drug Pricing Program issued by Representative Greg Walden and Senator Lamar Alexander, trade body Pharmaceutical Research and Manufacturers of America ( PhRMA) has outlined a number of commonsense ways policymakers can get the 340B program back on track and refocused on patients.

Nicole Longo, PhRMA director of public affairs focusing on Medicare, 340B, importation and more, has summarized the comments as follows:

Ensure the program delivers broader program accountability and transparency requirements for patients. “Currently, standards are highly variable, and in some instances woefully inadequate, across the range of providers participating in the 340B program. As a result, policymakers and stakeholders are unable to evaluate the program, quantify its benefit to patients, or objectively confirm that patients fully benefit from the program discounts. … At a minimum, all covered entities should have similar reporting requirements to ensure that vulnerable patients benefit from the program.”
Clarify which patients are eligible for the program so we can ensure those patients are in fact benefiting. “Despite this centrality of ‘patient’ to defining the program’s scope and assuring that statutory program integrity requirements are met, it has been a quarter of a century since the 340B program was created, and the patient definition has yet to be more clearly defined. As a result, there is broad consensus that the lack of specificity in the current (1996) patient definition invites abuse. … The lapse in guidance defining 340B eligible patients is glaring given the 340B statute creates an absolute prohibition on covered entities transferring or selling 340B drugs to individuals who are not patients of the covered entity. Therefore, a clear definition of ‘patient’ is a crucial element of the program and critical to the integrity and long-term sustainability of the 340B program.”
Strengthen eligibility criteria for 340B hospitals and their offsite outpatient facilities to ensure 340B discounts are going to true safety-net facilities and that child sites are subject to the same standards as their parent hospital. “Current standards are not correlated with the level of care delivered to vulnerable patients or the level of charity care at 340B hospitals. This misalignment calls into question whether the program is focused on fully benefiting low-income patients and other vulnerable patient groups. Updating eligibility metrics should account for the degree to which 340B covered entities continue to serve a meaningful and measurable safety-net function relative to typical non-340B providers.” Similarly, “the current 340B hospital ‘child site’ policy is outdated, increases costs, and drives consolidation that can negatively impact patient access to care. At a minimum, 340B hospitals should be required to report how discounts are used at each of these child sites. In addition, as policymakers consider broader restructuring of hospital 340B eligibility standards to deliver more benefit to patients, the appropriate role of child sites must be addressed.”
Examine the role of contract pharmacies in the program and whether they are in fact providing clear benefit to needy patients. “Researchers, economists, thought leaders, and Members of Congress have documented how contract pharmacy arrangements’ growth contributes to the program’s ballooning size without any accompanying guarantee of patient benefit. … Without providing a clear benefit to needy patients, as the 340B program was intended to do, the dramatic expansion of contract pharmacy arrangements into the for-profit, retail pharmacy sector represents an unreasonable and unnecessary risk to program compliance. … It is important to note that the term ‘contract pharmacy’ is not mentioned in the 340B law or in any regulations.”
Take steps to restore confidence that the program is helping patients through improved audit and program violation enforcement. “Although 340B/Medicaid duplicate discounts are statutorily prohibited, a drug with a negotiated commercial or Medicare Part D rebate can also be subject to a 340B discount due to the lack of appropriate mechanisms to identify 340B-eligible claims. As a result, manufacturers could end up paying a 340B discount and a plan / PBM rebate on the same claim. … There are no program requirements on PBMs or contract pharmacies to identify 340B claims properly, and some of the profit-driven motives previously mentioned could have unintended affordability consequences for patients.”

This article is accessible to registered users, to continue reading please register for free. A free trial will give you access to exclusive features, interviews, round-ups and commentary from the sharpest minds in the pharmaceutical and biotechnology space for a week. If you are already a registered user please login. If your trial has come to an end, you can subscribe here.

Try before you buy

Free

7 day trial access

Take a Free Trial

All the news that moves the needle in pharma and biotech
Exclusive features, podcasts, interviews, data analyses and commentary from our global network of life sciences reporters.
Receive The Pharma Letter daily news bulletin, free forever.

Become a subscriber

£820

Or £77 per month

Subscribe Now

Unfettered access to industry-leading news, commentary and analysis in pharma and biotech.
Updates from clinical trials, conferences, M&A, licensing, financing, regulation, patents & legal, executive appointments, commercial strategy and financial results.
Daily roundup of key events in pharma and biotech.
Monthly in-depth briefings on Boardroom appointments and M&A news.
Choose from a cost-effective annual package or a flexible monthly subscription

The Pharma Letter is an extremely useful and valuable Life Sciences service that brings together a daily update on performance people and products. It’s part of the key information for keeping me informed

Chairman, Sanofi Aventis UK