The 340B Drug Pricing Program makes it possible for Community Health Center patients to afford life-saving medications and is an an essential source of support for health centers to stretch increasingly scarce federal resources and reinvest in patient care. Over the course of the past few years, while health centers have been fighting COVID-19, the program has been under attack from multiple fronts.
The 340B program was established by a bipartisan act of Congress in 1992, via Section 340B of the Public Health Service Act. It requires pharmaceutical manufacturers participating in Medicaid to provide covered outpatient drugs at a discounted price to covered entities (CE). Eligible safety-net healthcare providers can enroll in the 340B program to become a CE and receive these discounted rates. There is a two-pronged approach: (1) A CE may provide uninsured or underinsured patients with a significant discount on their medications. (2) For insured patients, a CE can bill the insurance and the savings generated will be reinvested into patient care.
Middlemen Disrupt 340B Program Intentions
There have been discriminatory actions against 340B CEs and their contract pharmacies which negate the purpose of the 340B program. Some commercial insurances and pharmacy benefit managers (PBMs) are paying less to 340B CEs and their contract pharmacies for 340B drugs, imposing additional requirements on a 340B drug claim, and/or refusing to contract with a CE or contract pharmacy solely because it provides 340B drugs. These actions take away from the intentions of the 340B program as they pickpocket savings that should be invested back into patients, create additional workloads that take away from time allotted to direct patient care, and make it more difficult to have pharmacies in easily accessible locations for patients.
Currently, there are some states that have passed laws to prohibit these discriminatory actions against 340B CEs and their contract pharmacies. However, these laws only apply to Medicaid and some commercial insurance plans as they are at the state level. That is why federal legislation is necessary to protect the program across the nation and to be applicable to all insurance plans.
Preserving Rules Ordered for The Entities Covered Through 340B Act of 2021 – PROTECT 340B Act (H.R. 4390)
According to the bill, The PROTECT 340B Act of 2021 was created to amend title XXVII of the Public Health Service Act to “ensure the equitable treatment of covered entities and pharmacies participating in the 340B drug discount program, and for other purposes.” The PROTECT 340B Act of 2021 was introduced by Representative David McKinley (R-WV) and Representative Abigail Spanberger (D-VA) on July 9, 2021. The bill was referred to the Committee on Energy and Commerce where it remains today awaiting discussion.
The purpose of the legislation is to prohibit discriminatory actions against 340B covered entities and their pharmacies, introduce civil monetary penalties for any PBM that violates the protections, and require the Department of Health and Human Services (HHS) to contract with a neutral third-party entity to review claims from state Medicaid agencies and covered entities to prevent Medicaid duplicate discounts. This legislation would prevent payers from:
- Providing lower reimbursement rates, imposing special terms or conditions (chargebacks, “clawbacks”, increased frequency in audits or inventory management, implementing requirements to participate in preferred pharmacy networks).
- Interfering with an individual patient’s choice for a 340B drug.
- Requiring identification of 340B drugs.
- Refusing to contract with a CE or contract pharmacy for reasons other than those applied equally to non-340B entities.
These approaches undertaken by for-profit intermediary PBMs are analogous to PBMs “pick-pocketing” the 340B savings away from the covered entities and vulnerable patients. Although CEs are required to use 340B savings to reinvest into patient care, it is not a requirement of insurance plans and PBMs.
How to Powerfully Promote PROTECT 340B
Advocacy efforts should be focused on encouraging members of the House to co-sponsor the bipartisan bill. If your representative is not a co-sponsor of the bill, consider reaching out to tell them about this pick-pocketing issue and how it affects patients. You can consider reaching out by setting up a meeting, speaking on the phone, or sending an email or letter.
Impact of Health Centers’ 340B Savings (NACHC, May 2021)
Ari Wagner, PharmD, is a PGY-2 ambulatory care pharmacy resident at The Ohio State University College of Pharmacy and practices at PrimaryOne Health, the oldest and largest Community Health Center in central Ohio.