July 30, 2015 – Curant Health President and CEO, Patrick Dunham, in MedCity News – In my role as CEO of one of the nation’s largest independent 340B specialty pharmacies, I found the past six months leading up to the 340B Coalition Summer 2015 Conference were much quieter than in the past. Is the healthcare industry getting tired of bashing the federally administered 340B drug programs or is it something more positive?

340B done right has significant, measurable, positive impacts that improve outcomes and lives for hundreds of thousands of uninsured and underinsured Americans suffering from HIV, hepatitis C and other difficult to treat, chronic illnesses.

The 2015 340B Coalition Summer Conference highlighted many of these instances and generated the first confirmation of pending new omnibus guidance for the program from the Health Resources and Services Administration (HRSA – the federal administrative body for the 340B program) that I have heard from the organization directly. The following are the top 340B program insights I gained from three days in Washington, DC in early July.

  1. An appropriate spending level. Between 1.5 and 3 percent of all drug purchases made in America are made through 340B. In 2013, CMS estimated total U.S. prescription drug spending at $271 billion. For the same year, the Medicare Payment Advisory Commission pegged 340B spending on prescription medications at $7 billion. I believe this to be an entirely reasonable proportion for the country and our pharmaceutical manufacturer partners to provide discounts to our uninsured and underinsured fellow Americans.
  2. Validated positive outcomes. 340B covered entities continue to do great things for patients validating the program’s value. Mary Elizabeth Marr, CEO of Thrive Alabama, a Ryan White grantee and 340B covered entity since 2001, discussed how savings from the 340B program have allowed Thrive Alabama to increase both the number of patients served and co-pay assistance provided. She also presented data demonstrating that viral load suppression among their HIV patients has improved by 25 percent (from 54.7 percent to 79.7 percent in the past six years for VL <= 48). More than ever results of 340B done right continue to improve outcomes, lives and reduce the overall healthcare spend for chronically ill patients, the 20 percent of the population that accounts for 80 percent of U.S. healthcare spending.
  3. Improved oversight and additional guidance coming soon. Michelle Herzog, deputy director of the Office of Pharmacy Affairs said that since 2012, HRSA has completed 363 onsite audits of 340B covered entities encompassing over 4,000 facilities and sub-grantees and 9,000 contract pharmacy locations. The 340B program is demonstrating much better oversight than it has ever had.

Dr. Herzog also stated that HRSA plans on issuing omnibus guidance that touches all aspects of the 340B program later this year, something concerned parties have been seeking for years. We expect this to included needed guidance across all aspects including Medicaid rebates, patient definition, contract pharmacies and more. This was the first time I have heard this directly from a top HRSA representative and was a welcome piece of news.

  1. Pharma manufacturers are on-board with the majority of grantees. Pharmaceutical manufacturers see the need for the program and recognize the great work by the majority of HRSA grantees and covered entities. The pharma representatives who I spoke with see the need the benefits and the value for primary care that 340B provides, including Ryan White clinics acting as primary care. When patients know their physicians and maintain long-term, trusting relationships with them, the program works efficiently, as intended, and with resounding support of the pharmaceutical manufacturers whose discounts on life-changing medication therapies provide savings to the covered entities.

A note on pricing parity on hepatitis C therapies. In light of recently negotiated deals between PBMs and manufacturers of curative hepatitis C drugs, which reduce the price of those therapies by 40 percent, pricing for these therapies is essentially the same between the commercial market and 340B drug programs. Is this a sign of things to come as more high priced specialty drugs come to market in the near future?

Moving forward – the need for Medicaid payment clarification. Moving forward the top 340B program element that needs to improve is Managed Medicaid clarification regarding duplicate discount avoidance. There are 50 state departments of health and 50 ways of administering 340B and Managed Medicaid. There no single source of information providing oversight and 340B compliance assurance for contract pharmacies. We hope for a more streamlined process as the burden of administration shifts to the Managed Medicaid Payers.

Patrick Dunham

Patrick Dunham has served as Curant Health’s chairman, chief executive and president since co-founding the company in May of 2000. Under Patrick’s leadership, Curant Health has created an integrated care delivery model providing true patient medication management. His vast knowledge of healthcare information technology led to the creation of MedPlan™,

a highly effective electronic medical record keeping system at Curant Health. On LinkedIn