Pharmacy News

Proposed Changes to 340B Program Alarm Pharmacy Chiefs

[January 1, 2016, AJHP News]

Kate Traynor

BETHESDA, MD 09 Dec 2015—Pharmacy directors say that recent proposals for changes to the 340B Drug Pricing Program are shortsighted and will lead to adverse outcomes for patients.

"This would be a major setback," said Bob Ripley, vice president and chief pharmacy officer tor Trinity Health in Livonia, Michigan.

Ripley made the comment during a November 19 American Hospital Association (AHA) policy briefing in Washington, D.C. Two other pharmacists—David Neu, executive director of pharmacy for Saint Thomas Health in Nashville, Tennessee, and Raja Zeitany, vice president and chief pharmacy officer for Seattle-based Providence Health & Services—were also speakers on the panel.

The federal 340B Drug Pricing Program provides discounted drug prices on covered drugs to participating hospitals and other eligible entities. Briefing participants said they use savings achieved through participation in the 340B program to fund clinical pharmacy services, anticoagulation clinics, charitable care, medication assistance programs, and other activities that improve patient care.

The AHA briefing was held to highlight potential adverse effects of policies proposed by the Health Resources and Services Administration (HRSA) in an "omnibus guidance document" on the 340B program that the agency released as a proposal on August 28.

The briefing's participants expressed three main objections to the proposed guidance: Discharge prescriptions would no longer qualify for 340B discounts, drugs administered during infusion service–only patient visits also would not qualify, and only patients whose healthcare provider is directly employed by or under contract to a hospital capable of billing on the provider's behalf would be what HRSA calls "a patient of the covered entity for 340B Program purposes."

Discharge prescriptions. The proposed guidance, which includes a revised definition of a 340B-eligible patient, would require that each medication be prescribed or ordered in association with an outpatient care episode. This would seemingly prevent discharge prescriptions from being filled at the 340B price.

"We . . . pass on our 340B savings to our patients," Neu said—and that includes discharge prescriptions that are filled for patients leaving the hospital.

He said that for his health system, a patient who now pays $16 for a 340B-eligible diabetes medication prescribed at discharge would, under the proposed guidance, pay $288 for the same drug filled at the same 340B-participating pharmacy. He predicted that the high cost would deter patients from initiating therapy, leading to eventual rehospitalization and increased overall healthcare costs.

"The impact of this would be tremendous . . . if those discharge prescriptions cannot be provided at a reasonable cost," Zeitany concurred. He noted that medication adherence is a long-standing problem and that providing discharge prescriptions is one way to improve adherence.

Ripley said discharge prescriptions in his health system "ensure that there are no gaps in care," and he said evidence shows that the practice reduces 30-day hospital readmission rates.

If HRSA implements this portion of the guidance, he said, "it will decrease prescription volume by as much as 50%" and result in increased costs overall for the health system.

Infusion orders. The proposed guidance states that having a provider–patient encounter is a necessary element of each episode of care between an eligible patient and a hospital or other 340B covered entity. But the proposed guidance also specifies that the administration of an infusion drug alone does not constitute such an encounter, and the recipient of the infusion would not qualify as a 340B patient.

Ripley emphasized that each administration of an infusion includes "a whole host of services" as part of the package of care, whether the infusion occurs at a hospital or an outpatient site.

He noted that if rural infusion centers are forced to close or deny services because their patients do not meet the proposed 340B eligibility requirements, those patients might be forced to forgo treatments or receive them as inpatients.

Employer relationship. According to the proposed guidance, healthcare providers who have credentials at a 340B-participating hospital but are not direct employees or contract workers would not be considered 340B-eligible providers. Thus, these providers' patients would not be eligible to receive drugs purchased through the 340B program.

Neu said 35% of healthcare providers at his health system are direct hospital employees and 35% work under contract. The remaining 30%, he said, would not have the necessary provider–patient relationship to participate in the 340B program under the proposed guidance, although they do now.

He said the proposed change would mean, for example, that people seeking care in the emergency department would qualify as 340B patients one day but not another solely on the basis of who is on duty at the time of the visit. The availability of 340B discounts would likewise depend on who is on duty to write the prescription.

Directly employing all physicians or negotiating contracts with them, Neu said, would "require a major restructuring of physician and hospital contracts [and incur] major costs."

Joseph Hill, director of government relations for ASHP, said ASHP and AHA share the concerns raised by the speakers. He said the two organizations often work together on issues related to the 340B program.

Hill speculated that HRSA's response to comments from ASHP, AHA, and others will be influenced by the proposed guidance's effects on small and rural hospitals.

"If these changes threaten the health of the facility and that is communicated to HRSA, I would say there is a better chance of them changing their stance," Hill said.

HRSA did not state in the omnibus guidance when the agency intends to finalize the proposed changes to the 340B program.


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