340B Update, Response, and Strategy
Community health centers (CHCs) are eligible to participate in the 340B drug discount program as “covered entities.” The 340B program requires drug manufacturers who participate in Medicaid and Medicare to provide discounts on the price of outpatient pharmaceuticals purchased by “safety-net” providers, such as CHCs. The 340B program is central to CHCs’ abilities to offer affordable pharmaceuticals to their patients who are uninsured or underinsured. By reducing how much CHCs would otherwise spend on drugs, it frees up other funds to support critical services like expanding weekend clinic hours and after-hours coverage, dietary counseling, and additional staffing to support the array of health and social needs of their patients. Maintaining access to needed health care services - particularly during the coronavirus pandemic is more important than ever.
However, since July 2020, multiple drug manufacturers have taken actions that will significantly reduce CHCs’ access to 340B-priced drugs. To date, the Federal Department of Health and Human Services (HHS), which oversees the 340B program, has failed to penalize manufacturers, even though CPCA believes it is within their statutory authority to do so.
Manufacturers have taken the following actions:
Refusing to allow 340B-priced drugs to be shipped to “contract pharmacies” where they will then be dispensed on behalf of the CHC to eligible patients.
Demanding that CHCs and other providers provide them with extensive data and conditioning access to drugs at 340B pricing on the provision of that data. These data requests are inappropriate, onerous, legally problematic, and – most importantly -- will be used to deprive CHCs of the 340B savings provided to them by statute.
Replacing upfront discounts with post-sale rebates, which will be dispensed by a private third-party only after it gets the data needed to deprive the CHCs of its 340B savings.
CPCA’s Response
In response, CPCA has worked in close coordination with the National Association of Community Health Centers (NACHC) to develop resources, like factsheets and talking points, to help CHCs advocate in support of the 340B program. Below, please find details regarding advocacy efforts in support of the 340B program.
340B Congressional Advocacy: NACHC worked with members of Congress to circulate five congressional sign-on letters addressed to PHARMA, Health and Human Services (HHS) Agency Secretary Azar, and Kalderos (a company that manages a 340B platform for drug manufacturers) in addition to “Dear Colleague Letters.” Thanks to advocacy efforts by member CHCs and consortia we were able to get a number of California’s congressional representatives to sign on.
HHS Engagement Efforts: In partnership with NACHC, CPCA coordinated advocacy efforts that were geared towards contacting Secretary Azar to express the importance of the 340B program to CHCs and their patients. In addition, NACHC met with HHS to address misconceptions that the Trump Administration alluded to in their executive order regarding 340B priced epi-pens and insulin, where they claimed CHCs were not passing down 340B savings to patients when in fact they were.
340B Public Comment Engagement: CPCA helped to engage CHCs in submitting public comments in response to the epi-pen & insulin executive order. Separately, CPCA also encouraged CHCs to submit comments to Congress in response to their request to obtain stakeholder input in how to improve the 340B program. CPCA worked with NACHC to produce template letters and FAQs to help CHCs engage in these asks.
Outreach Efforts to Manufacturers: CPCA worked alongside NACHC to develop resources, such as FAQs and legal analysis, that CHCs could use when composing their responses to manufacturers request for 340B data and /or their threats against contract pharmacies. CPCA and NACHC also sent letters to the manufacturers restating CHC concerns.
Media Engagement: CPCA coordinated efforts to engage the media on 340B issues, particularly to highlight the impacts of manufacturer threats to CHCs. We are proud to say that we had an article published by the 340B Report and have had success in engaging Politico on 340B issues affecting California CHCs.
Legal Strategy: CPCA is working in close coordination with NACHC to develop a legal strategy in response to actions recently taken by manufacturers and Kalderos. In mid-October, NACHC submitted a lawsuit requesting that HHS use their enforcement authority to stop the actions by manufacturers. CPCA will be tackling the ‘discount to rebate’ issue created by Kalderos’ new platform, 340B Pay.
NACHC & CPCA Co-Hosted a Twitter Chat: At the end of October CPCA worked with NACHC to coordinate a Twitter Chat event where CHCs, Primary Care Associations and CHC allies were asked to share how the 340B program benefits their CHC and patients. The event was a huge success with the #Protect340B being retweeted more than 25,000 times.