Greetings from the tail end of the 340B Coalition Winter Conference in San Diego, where much of the focus was on the landmark Genesis ruling from November over the definition of a 340B patient. The government let pass the Jan. 2 deadline to appeal the decision, which said a prescription does not necessarily need to originate from the covered entity to be deemed 340B eligible, leaving ambiguity to linger.
In a feisty press release, Tony Megna, CEO and general counsel of Genesis Healthcare, the winning plaintiff in that case, said “The court’s ruling is now a final declaratory judgment of a federal court and can be authoritatively used across the nation to help millions of Americans.”
While the 340B world continues to talk about this ruling — lawyers are having a field day dissecting the meaning — little appears to have changed on the ground. Remember that the judge cautioned, for what it’s worth, that his ruling applied only narrowly to Genesis, which is not exactly throwing the doors open for other entities to follow suit. And as we learned at 340B Winter, HRSA is reinforcing its standard 1996 patient definition, holding that the covered entity “maintains responsibility for care.” The wiggle room covered entities may find is the lack of language stating care that led to the prescription.
Megna also used his press release to say that “HRSA’s insistence on defining the word ‘patient’ in a manner Congress specifically rejected demonstrates federal agency rule-making authority is unmanageable as it now exists.” He also took swipes at the National Association of Health Centers (NACHC) over its alliance with Big Pharma in ASAP 340B (“Discussion to find common ground is good. Pharma’s financial support of the partnership is highly questionable,” he said), and the South Carolina Primary Health Care Association, saying that “a thorough investigation is ongoing” into what he describes as “serious allegations of misconduct regarding false allegations, the OPA audit, audit process and patient records” involving members of the group. Megna is a member of that organization’s board of directors. Oh, to be a fly on the wall in one of those meetings!
Provocative press releases aside, I expect the Genesis chatter to eventually die down unless or until someone gets an adverse finding from HRSA, which could trigger a whole new set of legal dominos.
While there are few signs that Congress is ready to take up a comprehensive 340B fix, state legislatures aren’t sitting around waiting.
Lawmakers in nine states — Arizona, Florida, Iowa, Kentucky, Missouri, Nebraska, Oklahoma, Virginia and West Virginia — have introduced legislation in the new year to prohibit drug manufacturers from setting limits on 340B contract pharmacies. Two more states — Michigan and Massachusetts — saw similar measures introduced last year (the Massachusetts bill passed the state Senate). Many more states are likely watching what happens in the court challenges the drug industry has mounted against Arkansas’ and Louisiana’s laws before making their own moves.
These proposals are in addition to the PBM anti-discrimination laws now in place in 29 states. And they contrast with the 340B reporting laws now in place in Washington, Maine and Minnesota.
Switching to Congress, it’s been a while since we last checked in on Sen. Bill Cassidy (R-La.), one of the biggest 340B opponents in the House who has been busy trying to chip away at the program.
A physician and ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Cassidy just introduced a bill that would require the government to issue a report on Medicaid and 340B use among illegal immigrants (a companion bill was introduced in the House). Cassidy has also launched a probe in which he has sought details on 340B benefits from two major health systems, two large health centers and, most recently, from the contract pharmacy companies CVS Health and Walgreens, also inquiring about their TPA services.
It’s not clear what he intends to do with any information he receives. It’s also highly unlikely these pharmacy giants will disclose any information they deem proprietary and confidential, including their dispensing fee or 340B pricing. Of note is that the chairman of the HELP Committee, Sen. Bernie Sanders (I-Vt.), doesn’t seem to be interested.
The Senate HELP Committee is controlled by Democrats, but many political observers believe control of Congress will flip in November — Republicans will regain the Senate, while Dems will take over the House. If that happens, Cassidy likely takes over HELP, and 340B will need help.
Meanwhile, Rep. Larry Bucshon, an Indiana Republican, former cardiovascular surgeon and fellow 340B foe, announced he plans to retire at the end of this session after 14 years in Congress. He recently introduced bipartisan legislation with Rep. Doris Matsui (D-Calif.) that would require HHS to undergo measures to identify supply chain issues in an attempt to mitigate drug shortages.
340B Working Table, the stealthy lobbying group consisting of South Dakota rural health system Sanford Health, amongst a few others, a health center and drugmaker Genentech, has added two more pharma members: Novo Nordisk and Eisai. They’re backing the six senators who last year asked for feedback on ways to reform the program, including resolving the contract pharmacy dispute.
What’s odd about this group is that pharma doesn’t usually play nice with covered entities or look for common ground — particularly when they seem to be winning the battle over contract pharmacies. Our best guess is they’re eager for a federal solution from Congress because they’re nervously watching what’s happening in Arkansas and Louisiana.
- Drugmakers set a new record in 2023 with 41 refunds issued to covered entities in a single year, topping the previous record of 34 in 2022. It’s another reminder that “transparency,” the drug industry’s favorite 340B buzzword, is a two-way street.
- Japanese drug manufacturer Takeda expanded the reach of its first contract pharmacy restrictions to more drugs. Takeda’s restrictions went into effect Jan. 22 and now include three cancer drugs, in addition to the nine products originally covered under its limited distribution policy.
It’s an election year and plenty of 340B developments are expected in 2024. Now is a good time to re-engage with your government affairs teams and state hospital associations to remind them of what’s at stake for 340B. Please follow 340B Matters on LinkedIn or X for content you may not find elsewhere, including this downloadable and easily shareable 340B infographic. And thanks for reading.
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