Alliance Letter to Honorable Lamar Alexander, Chairman of the Senate Health, Education, Labor and Pensions Committee

March 1, 2019

The Honorable Lamar Alexander
Chairman
Senate Health, Education, Labor and Pensions Committee
428 Senate Dirksen Office Building
Washington, DC 20510

Dear Chairman Alexander:

I am writing to you on behalf of the Hemophilia Alliance in regard to your recent letter to stakeholders soliciting policy ideas to lower health care costs and improve health outcomes. The Hemophilia Alliance is a non-profit organization comprised of hemophilia treatment centers (HTCs) across the United States that provide patients with hemophilia and other bleeding disorders with comprehensive specialized diagnostic and treatment services and clotting factor delivery programs by participating in the 340B Drug Pricing Program. Hemophilia is a rare, chronic bleeding disorder affecting about 20,000 people in the US, who require life-long infusions of high-cost clotting factor therapies to replace missing or deficient blood proteins.

Background on Hemophilia Treatment Centers and the Hemophilia Alliance

The national network of 135 federally-funded HTCs was authorized under Title V of the Social Security Act (Maternal and Child Health Services (MCH)) in 1976. HTCs receive grant funding from the HRSA MCH SPRANS program and the Centers for Disease Control and Prevention (CDC). HRSA provides $4.9 million, which is spread across the 135 HTCs in the program, allocating approximately $36,000 per center. The majority of HTCs also participate in the 340B drug discount program. As HRSA grantees, all program income generated by participation in the 340B program is required to be reinvested to support comprehensive care for all patients seen at the center in accordance with the grant.

HTCs are comprised of an integrated multi-disciplinary team of providers – hematologists, nurses, physical therapists, social workers, and pharmacists – that provide highly specialized care to assess and provide treatment for bleeding disorders and their complications, including inhibitors, liver disease and HIV/AIDS. The HTC comprehensive care model is patient-centered and trains individuals with bleeding disorders to recognize and quickly treat life-threatening internal bleeding episodes to prevent complications. Studies have shown that mortality and hospitalization rates are 40% lower for people who use HTCs than in those who do not, despite the fact that more severely affected patients are more likely to be seen in HTCs.

The Hemophilia Alliance has created Hemophilia Alliance Network Services (HANS). HANS is a way for insurers to engage with HTCs across the country in a consistent way, facilitating more efficient care to private insurers and ultimately the bleeding disorder community. Engaging directly with insurers on a case-by case-basis has produced savings that range from 15% to 30% to employers, insurers and brokers when HTCs are allowed access to the patient. This savings is on product cost alone and does not account for the better care management and lower medical costs of the patient as a result of engaging with our HTC members. This is important because the hemophilia market is heading towards being a $10 billion market; saving 30% on such a large market while supporting better outcomes is good public health policy. The bleeding disorders community also serves as a proxy for the broader group of rare disease patients, for whom orphan and specialty drugs are a growing segment of the pharmaceutical industry.

Recommendations to Reduce Costs and Improve Health Outcomes

We have a number of policy recommendations that can help achieve our shared goals of lowering costs and ensuring appropriate care for both the general population and for our vulnerable patient population living with bleeding disorders. Our recommendations fall into two main categories: 1. Needed changes in pharmacy benefit manager (PBM) and insurance practices related to drug coverage and payment polices, and 2. Promoting access to Hemophilia Treatment Centers’ comprehensive clinical and 340B program pharmacy services as the most clinically- and cost-effective means to provide care to the bleeding disorders population.

Revise Insurance and Pharmacy Benefit Managers (PBM) Policies and Practices

We are very concerned about several current practices of prescription benefit managers (PBMs) and payers, which we believe reduce competition, increase costs, and lead to sub-optimal care for patients:

1. Engaging Prescription Benefit Managers (PBMs) in “Exclusive” Arrangements

America’s health insurers are engaging and negotiating arrangements with PBMs as “exclusive” vendors for pharmacy related services at an alarming rate. These exclusive arrangements cede control of network development and limit the use of medical home specialty providers that invariably can offer more favorable arrangements to health insurers and consumers. Our HTC members not only provide exceptional clinical care that reduces medical expenses, reduces emergency room visits and coordinates overall care in an expert manner but they also provide the opportunity to lower overall clotting factor expenses for health insurers and consumers. When a health insurer signs an “exclusive” arrangement with a PBM, HTCs are eliminated from networks in favor of large mail order entities that drop ship product to patients. This is not only more expensive, it also disrupts overall care management and coordination for the bleeding disorder community.

2. PBMs Creating “Owned” Mail-Order Distribution Capability

Another emerging trend that is concerning is the creation of large specialty mail-order entities owned and operated by PBMs. In these situations, PBMs limit network participation of “external” distribution options in favor of their own system. When this happens, health insurers lose the opportunity to ensure the most cost-effective option is in place, HTCs are carved out of networks and consumers are forced use to more expensive pharmacy providers that have no linkage to their medical provider. This action feels “anti-competitive” and a violation of the insurer’s fiduciary responsibility to employers and consumers since it forces patients to higher-priced options and limits patient choice. This is especially concerning in chronically-ill populations like bleeding disorders patients, who need costly pharmacy product to live productive lives.

3. Requiring Duplicative Pharmacy Accreditation Programs

To gain contracts, payers and PBMs often require pharmacies to have multiple, redundant pharmacy certifications. This creates barriers for smaller pharmacies, like HTCs, from being in-network, since these accreditations are very expensive and time intensive. Many of these accreditation program requirements apply to commercial specialty pharmacies that dispense a variety of different products but are not relevant to HTC pharmacies that only dispense clotting factor medications for bleeding disorders. For example, commercial specialty pharmacies operate call centers and the accreditation programs require tracking of time to answer, dropped calls and other standard call center processes. HTC pharmacies do not have call centers and staff is available to answer calls and provide immediate expert pharmacy services 24/7/365. This practice seems to reduce competition by eliminating the opportunities for HTC pharmacies to participate in PBM networks. All this, without increasing quality of pharmacy services because the accreditation programs have duplicative standards. For pharmacies dispensing bleeding disorders products, it is most important that they meet the pharmacy standards of the National Hemophilia Foundation’s Medical and Scientific Advisory Council (MASAC). All HTCs meet these standards.

Promoting Access to HTC Clinical and 340B Pharmacy Services

We encourage you to consider policies that promote contracts with covered entities like HTCs – or even requiring that public payers like Medicaid offer contracts to HTCs – would help save payers a significant amount of money. This also lowers patients’ out-of-pocket costs when they are required to pay a percentage of the cost of the drug. In addition, HTCs provide significant value through an integrated multi-disciplinary model that coordinates clinical and pharmacy services. As a result, promoting HTCs can improve patient outcomes while lowering costs for payers.

One policy option could be to model a requirement to contract with HTCs off of the essential community provider policy (ECP) included in the Affordable Care Act. Rather than requiring only the qualified health plans on the ACA marketplaces to contract with ECPs, we encourage you to require all public and private payers to include HTCs in their networks for public and private payers. This policy change would lower health care costs and ensure that our patients have access to the expert providers necessary to treat their conditions.

The 340B Program is critically important to HTCs and the vulnerable patients with bleeding and clotting disorders that we serve. As part of their federal grant, all federally-funded HTCs must use any savings from the 340B program to support services for their bleeding disorders patients. An analysis of the HTC network performed in 2014 by the National Hemophilia Program Coordinating Center (NHPCC), which is funded by HRSA, found that 340B program income supported 569 full-time equivalents (FTEs) at 83 HTCs and an average of more than 5,500 telephone triage, care coordination and case management patient encounters per center. The 340B program provides significant value to HTC patients by enabling access to lower cost prescriptions that have reduced out-of-pocket spending and allowed patients to maintain insurance as well as access to medical, dental, and support services and educational programs that HTCs provide using 340B proceeds.

We oppose any policies that would reform 340B in a way that reduces the benefits for HTCs and our patients. In particular, we are very concerned about potential efforts to redefine patient eligibility so that only uninsured or low-income patients are eligible for 340B drugs. People with bleeding disorders must maintain health insurance at all times, due to the high cost of their treatments and their vulnerable health status. As a result, prohibiting 340B drugs to be used for insured patients would essentially preclude HTCs from participating in the program. Reduced 340B revenues would jeopardize care for all HTC patients that benefit from the program income that HTCs are able to generate.

Rather than implementing restrictions for 340B providers, we recommend that you consider additional positive reforms to 340B that will lower drug and health care costs overall. We also note that the pharmaceutical manufacturers of bleeding disorders treatments are all strong supporters of HTC participation in the 340B program. Examples of their letters of support may be found on our website, www.hemoalliance.org.

Conclusion

Thank you for your consideration of our policy recommendations. We would be happy to meet with you and/or the appropriate staff to discuss these issues further. Please contact me at your convenience at 215- 439-7173 or joe@hemoalliance.org.

Sincerely,

Joseph N. Pugliese

Joseph N. Pugliese
President and CEO