· Alliance Comments on Trump Administration Drug Pricing Blueprint
· House Energy and Commerce Holds Hearing on 340B and Releases More Bills
· Government Accountability Office (GAO) Releases Report on 340B Contract Pharmacies
· Reminder: What Are the Rules around Grant Funds and Use of Program Income?
HHS Secretary Alex Azar in a private meeting with GOP House lawmakers Thursday floated standardizing the 340B drug discounts offered to providers, cutting it to 20% of the list price, a lawmaker and staff who attended the meeting told Modern Healthcare. Several GOP members of the House Energy & Commerce health subcommittee who were present told Azar they would vigorously oppose holding critical access and rural hospitals to this standard, which is significantly lower than the typical 40% to 60% discount that 340B hospitals currently receive.” (Modern Healthcare). The Hemophilia Alliance also vigorously opposes the standardization of the 340B discount as it will significantly increase 340B drug prices. The 340B price for many drugs would double, which is against the President’s goal of lower drug prices.
In a recent meeting with policymakers on drug prices, HHS Secretary Alex Azar said that manufacturers wanted to lower list prices, but they were getting push back from PBMs and health plans who did not want them to lower prices. He suggested that doing away with safe harbor protections currently available in these types of arrangements would be on solution. I have another in mind.
Interestingly these opaque rebates offered by PBMs are not included in the AMP (Average Manufacturer Price) calculations of manufacturers. They totaled $57.5 billion dollars in 2015, or about 10% of the entire pharmaceutical market. Excluding this significant figure from the AMP pricing calculation does two things: it raises the 340B price offered to covered entities and it reduces the URA (unit rebate amount) paid to state Medicaid offices. I would suggest a simple, fast and effective way to lower drug prices and save taxpayers money is to include these rebates in the AMP calculation.
Optum and probably others were quick to state publicly that they would never pressure manufacturers to maintain or raise prices. They would welcome prices decreases. I did not see any statement anywhere suggesting PBMs or health plans would give up rebates related to these price decreases. Price increases seem to be related to rebates paid to PBMs and health plans. It is unlikely manufacturers would offer lower prices and keep paying the same rebate (i.e. if a drug has a price of $100 and a rebate of $20 the manufacturer nets $80. If they lower the price to $80 and the rebate remains the same, they net $60). I would prefer a shared savings model – if the price comes down $20 or 25% of the net, it would seem the rebate should come down a like percentage. I like our model better; the discounts come on the invoice and there are no rebates or sharebacks. These after the fact discounts muddy the waters.
One of the interesting things about the discussion over drug prices is the constant reference to list price. In 2002, I wrote to all of the Medicaid offices in the country questioning their use of AWP (Average Wholesale Price, aka Ain’t What’s Paid) in determining reimbursement. While states tend to use WAC now (Wholesale Acquisition Price aka What Are u Crazy), the underlying problem remains the same. If payers can simply pass on price increases to providers, patients and taxpayers prices will continue to rise. As noted in our recent letter to Secretary Azar (see below), we have a number of balanced and reasonable ideas on how to manage drug pricing and support safety net providers like hemophilia treatment centers. I welcome your thoughts on ways the Alliance and HTCs can help address this problem.
Alliance Comments on Trump Administration Drug Pricing Blueprint
By Johanna Gray
In July, the Alliance submitted two comment letters in response to the Trump Administration drug pricing blueprint:
The Alliance letter focused on HTC-specific issues. We opposed a more restrictive patient definition and reduced Medicare reimbursement for 340B providers. We supported positive changes to 340B, including finalizing the penny pricing rule, promoting contracts with HTCs as a strategy to reduce payer and patient costs, including manufacturer rebates in AMP calculations and requiring manufacturers to use the lowest calculated ceiling price for a product line rather than for each SKU. Outside of 340B policy, we also opposed the movement of hemophilia treatments from Medicare Part B to Medicare Part D and asked the Administration to maintain existing Affordable Care Act (ACA) patient protections that benefit our patients.
We also signed onto the 340B Coalition’s joint letter and worked to shape its contents. This letter discusses 340B issues more broadly and makes the case that not only does 340B not contribute to higher drug prices (the question raised in the blueprint) but that 340B plays a vital role in ensuring that safety net providers can serve their patients.
We anticipate that the Trump Administration and Congress are likely to release a number of new policies related to drug pricing in the coming weeks and months. We will continue to monitor this and advocate on behalf of HTCs and patients with bleeding disorders.
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House Energy and Commerce Holds Hearing on 340B and Releases More Bills
By Johanna Gray
On July 11th, the House Energy and Commerce Committee held another hearing on the 340B Program. During the hearing, most Members shared previously-stated positions either for or against 340B reform, nearly always focused on hospitals. For HTCs, the most concerning part of the hearing was a discussion about the patient definition, in which Rep. Chris Collins (R-NY) shared his intent to restrict the patient definition to uninsured patients only. It is a little confusing, since this is not what his draft bill would do. Rep. Buddy Carter (R-GA) also seemed interested in changing the patient definition and expressed surprise that anyone would support maintaining the 1996 patient definition since it’s so old.
The hearing notice included 15 introduced and draft bills under consideration in the Committee. We have analyzed all of the bills and most are either bills or concepts we have seen before. In general – as currently drafted – we do not see significant cause for concern for HTCs. Here are a few more details:
Nearly all of the bills apply only to hospitals. While these bills may not affect HTCs directly, we remain concerned about slippery slopes and the potential for new reporting requirements or restrictions to be expanded to more covered entities during the legislative process (some policies would be damaging if they applied to HTCs). Plus hospital-based HTCs may have to report information about their programs to their institutions depending on how the requirements are implemented. On the other hand, if the bills remain as drafted, more administrative burden for hospitals might make the HM designation more attractive, making it easier for HTCs and our patients to benefit from 340B program income.
A few of the bills that apply more broadly – such as to create a new Senate-confirmed position for Administrator of the 340B Program or to require that audits be performed according to generally-accepted government auditing standards – are neutral or positive for HTCs.
Two bills would more directly benefit HTCs. One would increase the 340B discount for non-hospital covered entities and the other includes a variety of pro-covered entity policies, including a prohibition on payers preventing patients from using covered entity pharmacies.
There is much more activity on the House side of Congress than in the Senate. Accordingly, we still believe it is unlikely that any 340B reform proposals will become law this year. That said, it is clear that Congressional interest in the issue will continue.
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Government Accountability Office (GAO) Releases Report on 340B Contract Pharmacies
By Elizabeth (Issie) Karan
On June 21st, the GAO released a report to Congress entitled, “Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement” (GAO Report). As part of its research, the GAO reviewed 30 contract pharmacy agreements (from 15 hospitals and 15 grantees); sent questionnaires to 60 covered entities; and interviewed two third-party administrators. The GAO also reviewed the OPA Information System (OPAIS) for trends. The GAO Report contains extensive statistics about the 340B Program based on OPAIS and descriptions of its qualitative research. For example, Appendix I of the GAO Report describes the fees incorporated into the contract pharmacy agreements that they reviewed. Based on its research, the GAO made seven recommendations. The Health Resources & Services Administration (HRSA) did not concur with three of the GAO Report’s recommendations as described in Appendix II.
In the report, GAO described a number of concerns about HRSA oversight of 340B:
First, The GAO does not believe that registration of contract pharmacies in the 340B Program is complete and accurate. Since covered entities are not currently required to register contract pharmacies for each clinical site, the GAO found that covered entities differed in the way they registered contract pharmacies. As a result, GAO stated that HRSA does not have complete data on the total number of contract pharmacy arrangements in the 340B program to inform its oversight efforts, including information that could be used to better target audits.
Second, the GAO Report stated that HRSA audits do not fully evaluate compliance with the 340B Program prohibition on duplicate discounts because HRSA only assesses the potential for duplicate discounts in Medicaid fee-for-service and not Medicaid managed care. This is because HRSA has not yet issued guidance on Medicaid managed care. Given the large number of Medicaid managed care claims for drugs, the GAO found this to be a significant barrier to full oversight over the 340B Program by HRSA.
The GAO found the HRSA audit process inadequate for other reasons as well. The GAO noted that HRSA does not require all the covered entities to explain the methodology they used for determining the extent of the noncompliance. As a result, GAO believes that HRSA does not know the full extent of noncompliance. In addition, GAO found that, when closing an audit, HRSA inadequately relies on each covered entity to self-attest that all audit findings have been addressed and that the entity came into compliance with 340B Program requirements.
Analysis of HTCs was a very minor part of the report. The GAO reviewed two contracts related to hemophilia products which had flat fees of $.06 and $.09 per unit of clotting factor. The GAO observed that these fees differed significantly from other contracts for other types of drugs. This was the extent of GAO’s analysis of clotting factor dispensations.
To address its concerns, the GAO Report makes seven recommendations to HRSA:
Recommendation 1: HRSA should require covered entities to register contract pharmacies for each site of the entity for which a contract exists.
Recommendation 2: HRSA should issue guidance to covered entities on the prevention of duplicate discounts under Medicaid managed care, working with CMS as HRSA deems necessary to coordinate with guidance provided to state Medicaid programs.
Recommendation 3: HRSA should incorporate an assessment of covered entities’ compliance with the prohibition on duplicate discounts, as it relates to Medicaid managed care claims, into its audit process after guidance has been issued and ensure that identified violations are rectified by the entities.
Recommendation 4: HRSA should issue guidance on the length of time covered entities must look back following an audit to identify the full scope of noncompliance identified during the audit.
Recommendation 5: HRSA should require all covered entities to specify their methodology for identifying the full scope of noncompliance identified during the audit as part of their corrective action plans, and incorporate reviews of the methodology into their audit process to ensure that entities are adequately assessing the full scope of noncompliance.
Recommendation 6: HRSA should require all covered entities to provide evidence that their corrective action plans have been successfully implemented prior to closing audits, including documentation of the results of the entities’ assessments of the full scope of noncompliance identified during each audit.
Recommendation 7: HRSA should provide more specific guidance to covered entities regarding contract pharmacy oversight, including the scope and frequency of such oversight.
HRSA disagreed with several of the findings in the GAO report, specifically Recommendations 1, 5, and 6. With regard to Recommendation 1 (which would require all covered entities to register contract pharmacies for each site of the entity for which a contract exists), HRSA noted that all contract pharmacy sites must be listed in the written contract between the parties and that HRSA audits such information. HRSA stated it will add the assumption that all contract pharmacies registered to parent sites are also registered to all child sites of the covered entity to the when evaluating risk-based targets for the FY 2019 audit cycle. With regard to Recommendation 5 (which would require more detail and documentation about resolving issues of non-compliance) and Recommendation 6 (which would require additional evidence that corrective action plans have been fully implemented prior to closing audits), HRSA noted that this would put a significant burden on covered entities and HRSA, and significantly extend the length of time it takes to close an audit.
The GAO Report will likely continue to garner attention from Congress and other stakeholders. It was the subject of a recent Energy and Commerce Hearing, and a draft House bill which would require implementation of all of the GAO Report Recommendations. The Hemophilia Alliance team will continue to monitor these and other developments in the 340B Program.
Reminder: What Are the Rules around Grant Funds and Use of Program Income?
By Elizabeth (Issie) Karan
Hemophilia Treatment Centers (HTCs) located within larger institutions often face challenges explaining why all of the revenue generated by their factor program must be spent to care for patients with bleeding and clotting disorder. As we have done in the past, the Alliance Team has put together a formal letter that HTCs can use to internally educate administrators about rules for spending program income. If you have questions or concerns or would like to set-up a call with the legal team and your organization, please contact Issie or Mike.
Payer Team Update
Payer Team Update
By Jeff Blake
The Payer Team has continued to work with Member HTCs to complete our Insurance Questionnaire. The intent of the insurance questionnaire is to gather key payer information and payer issues HTCs are encountering. In addition, the Payer Team has provided member HTCs a Patient Insurance and Clotting Factor Utilization Spreadsheet to assist HTCs in better understanding their patients’ health insurance. The data gathered has been very helpful to track payer trends and issues. The most common issue our members face is the “Self-Insured Health Plan Specialty Drug Carve Out.” This policy requires the patient to receive their clotting factor and other specialty drugs from an exclusive specialty pharmacy, often one that is owned by the Prescription Benefit Manager controlling network access and limiting HTC participation.
During the last 18 months, the Team has helped several HTCs overcome this issue with some of their patients. The Team and HTC staff have worked with Third Party Claims Administrators (TPAs), insurance brokers and consultants and directly with self-insured employers to overcome this issue. The results have been very favorable. We have been able to highlight and demonstrate the benefits and value of the HTC integrated care model and have the HTCs’ pharmacy program dispense clotting factor to their patients and save these self-insured employers 20% – 35% on factor costs.
Do you have patients with a self-insured health plan with a specialty drug carve out? Would you like to get more organized tracking your patients’ insurance and gain a better understanding of key payers and issues? Try working with a Hemophilia Alliance Team member to complete the Insurance Questionnaire and Patient Insurance and Clotting Factor Utilization Spreadsheet. Would you like to develop or update your strategic efforts with payers? Please contact one of the Hemophilia Alliance Team members to discuss how we can help you with your payer needs and issues. WE WORK FOR YOU!
Fall Members Meeting 2018
By Sean Singh
We are less than two months away from the Alliance Fall Members Meeting. We are finalizing the agenda and are working to ensure we can share the latest information with you that reflects the many changes we are seeing.
The meeting will be on September 23-25, 2018 and will be held at The Cosmopolitan of Las Vegas, 3708 Las Vegas Blvd. South, Las Vegas NV 89109. We have two full days of presentations on Monday September 24th and Tuesday September 25th. The meeting will end at 5 pm on Tuesday September 25th. You can register here.
We have added more rooms and the block rate is available on Saturday 9/22 and Tuesday 9/25 based on availability. If you have not yet made a hotel reservation, please do so at your earliest convenience. If you are having trouble making a reservation, please let me know. We are in contact with the hotel to try and accommodate everyone.
, Board Chair, will provide an update on how the Alliance is achieving the goals of its 2018 strategic plan
Joe Pugliese, President and CEO, will provide a broad overview of Alliance activities, including an update on our manufacturer contracts and an analysis of Hemlibra and other new products
George Oestreich, Government Payer Consultant, will provide an update about Medicaid state plan amendments and a look ahead at potential changes coming in 2019
Mark Plencner and Jeff Amond, Directors of Payer Relations, will discuss examples of single case payer agreements and how members and the Alliance can work together on payer issues
Jeff Blake, SVP of Payer Relations and Michelle Rice, SVP, External Affairs, NHF, will discuss how NHF and the Alliance are working together to keep HTCs in network for clinical and pharmacy benefits
Ellen Riker and Johanna Gray, Advocacy Consultants, will provide a Washington Update and share the latest information about Trump Administration and Congressional actions related to 340B reform, the Affordable Care Act and drug pricing
Nancy Durben and David Oleson, Physical Therapists at Oregon Hemophilia Center, will discuss clinical uses of ultrasound in an HTC and the financial and logistical hurdles of incorporating ultrasound into an HTC setting
Jennifer Roberts, CPhT, 340B Compliance Officer and Care Coordinator at Hemostasis and Thrombosis Center of Nevada, will discuss the steps involved in launching a new independent HTC
Stacey Croteau, M.D, Associate Director – Boston HTC, will discuss new products and the effects of Hemlibra on the market
Sean Singh, SVP, Marketing and Operations, will discuss how the Alliance can help HTC promote their services and tools the Alliance uses to keep in touch with it members
Michael Glomb, Legal Counsel, will provide an interactive dialogue of Program Income. This session will be from 3-5 PM on Tuesday, September 25th – so be sure to book your flight accordingly to be able to attend. Members can submit questions ahead of time to have them discussed during the session – please submit to firstname.lastname@example.org.
Talking to the media – How to speak about your 340B program when the media comes around.
Best practice – A look at an HTC and what they are doing to enhance patient care.
Manufacturing partners – Our partners will present on timely topics.
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Have you been to the Hemophilia Alliance website lately?
By Sean Singh
Have you browsed our news tab or logged into the member’s section to see the large library of presentations, meeting materials, legal briefs and more? We continue to update the library. It is a great resource for to help orient new team members on 340B and a refreshed for seasoned HTC staff.
The website provides information on a variety of topics:
Audit / Compliance
Forms & Surveys
Government / Advocacy
Marketing & Presentation Tools
We also have 15 short informational videos on the value of a 340B program for an HTC and testimonial on how they help patients.
Here is one entitled: What is a 340B Program within an HTC? It provides a detailed description of what a 340B program is and describes the federal support and recognition of HTCs as a Center of Excellence. The video explains how HTCs provide integrated pharmacy and clinical care.
Notes from the Community
Cincinnati Children’s Guidebook for the Home Treatment of Bleeding Disorders Updated
The Hemophilia Alliance Foundation recently supported grant funding to update the Cincinnati Children’s Hospital’s guidebook for the home treatment of bleeding disorders. The former guidebook was over 15 years old and much of the information was out of date. In addition, the information was not written at an appropriate health literacy level for patients and families. The new guidebook offers a step-by step guide to home factor treatment. It also contains sections on both port and peripheral infusions as well as information on using a specialty pharmacy and maintaining bleeding logs. You can link to the handbook by clicking here. A non-branded, editable version of the handbook can be found in the members section of the Hemophilia Alliance’s website if your center is interested in customizing the information for your own use. Spanish and Arabic versions of the guidebook are also available for your reference.
Members of the Cincinnati Children’s Hemophilia Team
From the left:
Lisa Littner, LISW-S, Hemophilia Grants Manager
Elyse Higgins, Graphic Designer
Ann Otte, MSN, RN Treatment Nurse
Chris Roedersheimer, RN, BSN, CPN- Hemophilia Nurse Care Manager
Nancy Dodson, RN, BSN, CPN- Hemophilia Nurse Care Manager
Kristy Topolewski, Marketing
Dr. Cristina Tarango, Hemophilia Treatment Center Medical Director
Team Alliance Contact Information
We work for you! Please don’t hesitate to contact any of us with any questions or concerns: