Regulatory and Legislative Actions Are Likely to Continue to Affect 340B Program

Decisions in the Senate will most likely affect protections for covered entities under the 340B program, according to a virtual panel at the National Association of Specialty Pharmacy 2020 Annual Meeting & Expo Virtual Experience. The panelists explained that these congressional decisions will have implications for the program over the next 2 years.

During the session, Peggy Tighe, JD, legislative counsel for Ryan White Clinics for 340B Access and principal at Powers Law Firm; Neil B. Minkoff, MD , founder of FountainHead HealthCare; and Mark Ogunsusi, JD, PharmD , associate at Powers Law Firm, discussed the regulatory and legislative actions currently affecting the 340B program as well as how the upcoming presidential election may further affect the program.

The 340B program, regulated by the Health Resources and Services Administration (HRSA), allows covered entities to stretch scarce federal resources to the furthest extent possible to provide patients in need with comprehensive services. Additionally, manufacturers that participate in Medicaid must also consent to providing outpatient drugs to covered entities at significantly reduced prices. These covered entities, defined by the 340B Public Health Service Act, include HRSAsupported health centers, Ryan White clinics, state AIDS drug assistance programs, Medicare/Medicaid disproportionate share hospitals, children’s hospitals, and other safety net providers.

Following the coronavirus disease 2019 (COVID- 19) outbreak, HRSA released a public health emergency declaration that allowed some entities, upon request and review, to immediately enroll in the 340B program, with an allowance for greater flexibility surrounding eligibility because of the pandemic. “Recently HRSA…updated its recertification and regulation requirements for covered entities,” Ogunsusi said during the panel discussion. He also noted that some of these regulations have hit certain hospitals currently struggling during the COVID-19 pandemic particularly hard.

“There [have] been regulations in respect to hospital price transparency,” Ogunsusi said. “There’s a final rule that was highly debated, and it’s the subject of current ongoing litigation with respect to payer-specific negotiated charge data that these hospitals are required to publish in a user-friendly format on their websites. Given the current global pandemic, [this regulation] is putting hospitals at a disadvantage in their abilities to provide health care to the community.”

Tighe noted that some of the Trump administration’s executive orders that affected 340B covered entities were released with less impact on any real regulatory changes to drug pricing. “This is really the first time that we’ve seen executive orders that have been almost purely political,” Tighe said. “I’m not saying all of them [are], but a couple of them relevant to drug pricing and to the 340B program [are]. There are a lot of folks out there saying that [the executive orders] are probably never going to see the light of day and they were really meant to deliver a political message to various constituents of this current administration.”

Additionally, Tighe explained that little federal legislation regarding the 340B program is currently under way. However, some bills are trying to protect 340B hospitals through the COVID-19 pandemic and keep them from losing their eligibility.

Specifically, a recent bill, the Prescription Drug Pricing Reduction Act, was brought to Congress to impose some stringent price reporting controls on the pharmaceutical sector as well as to continue some rebates from drug manufacturers. However, this bill was blocked by legislators. Tighe explained that following this barrier, the bill was abandoned in the hopes of obtaining greater success following the upcoming presidential election.

Regarding the election, Minkoff noted that although he believes much less will affect the 340B program under either winning candidate, the real changes will be in the House and the Senate.

“Whether or not the House is going to be in favor of trying to protect the covered entities under 340B, the question is going to be whether they can get the Senate to go along with it. I think that those actions will have a lot more to do with the solvency of the program and the implications to the program over the next 2 years than [with] who wins in the electoral college. So I think that it has a lot more to do with the Senate,” Minkoff said.

Additionally, Tighe noted that an administration that is more friendly to 340B covered entities may have some drawbacks, as well, such as the reinstatement of the 340B Program Omnibus Guidance, which was termed the mega-guidance. The guidance was an attempt by the HRSA to provide clarity regarding 340B program standards.

However, the 340B Program Omnibus Guidance was not very well received by any stakeholders, including manufacturers and covered entities, upon its introduction to the industry, Tighe explained. She noted that a solution may potentially be a bill that corrects “around the edges” of current program standards rather than one that makes corrections so heavy-handedly.

REFERENCE

• Tighe P, Minkoff N, Ogunsusi M. 340B drug pricing. Presented at: 2020 National Association of Specialty Pharmacy Annual Meeting & Expo Virtual Experience; September 14-18, 2020; virtual. Accessed September 16, 2020. https://nasp.6connex.com/event/ VirtualExperience/en-us#!/Lobby