Regulatory and Legislative Actions Currently Impacting the 340B Program

Protections for covered entities under the 340B program will most likely be affected by decisions in the Senate, according to a virtual panel at the National Association of Specialty Pharmacy (NASP) Annual Meeting and Expo 2020. The panelists explained that these congressional decisions will have implications on the future of the program over the next 2 years.

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

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, so that those resources can reach patients in need and provide them with comprehensive services.

Additionally, manufacturers that participate in Medicaid also must consent to providing outpatient drugs to covered entities at significantly reduced prices. These covered entities, defined by the 340B Public Health Service Act, include HRSA-supported 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) pandemic, 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 due to the pandemic.

“Recently HRSA has 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’s 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 there isn’t a lot of current federal legislation under way in regard to the 340B program. However, there are bills that are trying to protect 340B hospitals through the COVID-19 pandemic so that those hospitals don’t lose their eligibility.

Specifically, a recent bill introduced, titled the Prescription Drug Pricing Reduction Act, was brought to Congress in order 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.

In regard to the presidential election, Minkoff noted that although he believes much less will occur that will affect the 340B program under either winning candidate, the real change that will occur 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 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 340B Program Omnibus Guidance was an attempt by the HRSA to provide clarity regarding 340B program standards.

However, the 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” to current program standards rather than one that makes corrections so heavy-handedly.

REFERENCE

Tighe P, Minkoff N, Ogunsusi M. 340B Drug Pricing. Presented at: NASP Annual Meeting & Expo 2020; September 16, 2020; virtual. nasp.6connex.com/event/VirtualExperience/en-us#!/Lobby. Accessed September 16, 2020.