Legal Update, September 2020

Legal Update
340B Program Developments: The Latest
By Elizabeth "Issie" Karan 

The 340B Program has had an eventful Summer 2020 and Fall 2020 looks much the same. Over the summer, manufacturers took steps to procure extensive pharmacy claims data from covered entities (CEs) for all payers, and to curtail use of contract pharmacies in the 340B Program. This month proposals have surfaced to change the 340B Program from a front-end discount to a back-end rebate. Kalderos, a “prescription drug information technology” company who has partnered in the past with manufacturers to identify duplicate discounts in Medicaid, announced at the beginning of September that it is launching a platform called 340B Pay “to facilitate 340B discounts via a rebate.”

On a webinar on September 11, Kalderos indicated that their program would operate on an NDC-by-NDC basis at the discretion of the manufacturers. Kalderos also stated that if a manufacturer decides to use 340B Pay for a given NDC, then 340B benefits will only be offered as a back-end rebate and covered entities would not be eligible for an upfront discount on the price of the product. Kalderos has started soliciting CEs to sign-up for 340B Pay although they have not indicated which manufacturers or products are participating in the program. Kalderos also said that they have worked with HHS extensively in designing the program but did not indicate that they had received formal approvals from the government.

The Hemophilia Alliance (HA) has significant concerns with utilizing rebates instead of discounts in the 340B Program. Specifically, shifting to a rebate system would disrupt HTCs’ existing cash flow and delay utilizing 340B Program benefits to care for people with bleeding and clotting disorders. Since the late 1990’s, AIDS Drugs Assistance Programs (ADAPs) have utilized a rebate system to obtain 340B Program benefits. However, HHS implemented the ADAP rebate program with a comment process for stakeholders. We remain skeptical that manufacturers could lawfully move the 340B Program to a rebate system without further opportunity for impacted parties to comment.

HA has been working in coalition with other CEs on both congressional and administrative advocacy related to the 340B Program. HA joined with other members of the 340B Coalition in sending a letter to Secretary Azar asking him to investigate the actions of manufacturers. HA also endorsed a letter that Senator Blumenthal (D-CT) sent along with 21 other Democratic Senators to PhRMA CEO opposing the contract pharmacy restrictions and burdensome data requests. Last week, more than half of the members of the House joined together to send a bipartisan letter to Secretary Azar requesting that “immediate action is taken to ensure covered entities continue to receive crucial 340B drug discount.” The letter comes less than two weeks after House Democratic leaders of the House Energy & Commerce Committee made a similar request. HRSA recently made public a letter it sent to Eli Lilly regarding its plans to restrict access to 340B drugs to contract pharmacies, where it cautions the company about the risks of the program and states that HRSA is still evaluating whether manufacturers have violated the 340B statute and whether sanctions may apply.

HA will continue to monitor developments, work with coalition partners on advocacy and defense of the 340B Program and communicate directly with manufacturing partners.

Also in this Issue…

Notes from Joe
· Continued Opportunities and Threats Facing HTCs

Payer Update
· Know Your Patients and their Insurance Status

Alliance Update
· Alliance Seeking Board Nominations
· Join Our Growing Hemophilia Alliance Team
· 2021 Meeting Schedule

Notes from the Community
· CDC Awards Cooperative Agreements to Bleeding Disorders Organizations
· Hemophilia Alliance Foundation Poster at NHF’s BDC Shows Impact of Grants
· NHF Seeks Input for Blue Sky Strategic Plan