340B Insider – August 2019









    Welcome to the August edition of RxStrategies’ 340B Insider, a concise communication to provide a quick highlight of updates from RxStrategies’ view. Visit our website to read more.







    It was great to connect with so many of our clients and industry leaders during the 340B Coalition Summer Conference in Washington D.C. and discuss the dynamic 340B marketplace, recent trends, and risks.

    In addition to being a Pinnacle Leader Sponsor of the conference, RxStrategies experts presented with other industry leaders during a panel discussion of 340B program best practices and shared tools to assist in avoiding duplicate discounts. Rhodie Smith, RxS Vice President – Contract Pharmacy Sales, provided deeper insight into the following:

    • Tactics that will prevent duplicate discounts
    • How to prevent diversion
    • How and what to maintain for auditable records
    • Internal 340B Self Audits
    • Reinvestment of 340B Savings to Uninsured Patients

    Click here to download a copy of the presentation.

    Also, Jonathan Ghenn, Vice President of Enterprise Sales, and Rhodie Smith presented to Covered Entities regarding, “Mastering 340B Program Administration.”  The interactive discussion of advanced system capabilities included:

    • Optimization of your drug spend beyond just 340B with real-time purchase decision support
    • Increasing Specialty Pharmacy capture rate
    • Automation of routine tasks and reporting
    • Real-time sliding fee program development

    Thank you to those who were able to stop by our booth or visit with the RxStrategies team between sessions. We appreciated the opportunity to discuss key 340B industry trends and share current best practice approaches.

    Contact us to discuss how our team can support your 340B program.





    Read below for recent news from 340B Health.


    Several proposed bills designed to tackle high drug costs have started moving through the legislative process on Capitol Hill. While the proposed legislation doesn’t currently include any direct 340B program provisions, at least one lawmaker has expressed a desire that they be added to later versions of the measures before coming up for votes.

    Most of the drug pricing action in Congress so far has occurred in the U.S. Senate, where committees have approved their own legislative packages.

    • The Senate Health, Education, Labor, and Pensions (HELP) Committee on June 26 approved the Lower Health Care Costs Act, which contains a section on drug pricing with provisions to encourage access to lower-priced generic drugs and biologics.
    • The Senate Finance Committee on July 25 approved The Prescription Drug Pricing Reduction Act (PDPRA) of 2019, which aims to reduce drug prices across several federal health care programs (see further details below).

    The recent developments are prime examples of how 340B continues to receive attention from lawmakers as part of the broader drug pricing debate. Senate leadership will consider taking up the committee-approved bills for floor consideration this fall, during which time more amendments could be considered. House leadership plans to unveil its own drug pricing package in September. The debate offers the opportunity to educate more lawmakers about the 340B program and explain why it should be preserved amid potential drug pricing reforms.



    The Centers for Medicare & Medicaid Services (CMS) has issued a proposed Medicare payment rule for the 2020 calendar year that would extend deep payment reductions for 340B hospitals that a federal court has twice deemed unlawful.

    The 2020 Medicare outpatient prospective payment system (OPPS) proposed rule released on July 29 would continue a nearly 30 percent rate reduction in Part B drug payments to many 340B hospitals. A federal judge has ruled that the Dept. of Health and Human Services (HHS) exceeded its authority when it imposed those cuts in 2018 and again when it extended them into 2019. But the administration is appealing those rulings, so the cuts remain in effect. If the government finalizes the reduced payment rates for 2020, hospitals again would have to turn to the courts to ask for them to be blocked.

    The proposed rule acknowledges the ongoing court battle and the possibility that the government will lose the case on appeal. The administration is, therefore, soliciting comments on a possible alternative payment rate to 340B hospitals should the appeals court rule against the cuts. That alternative rate of average sales price plus three percent (ASP + 3%) would be much higher than the current rate (ASP – 22.5%) but still below what is paid to non-340Bhospitals (ASP + 6%).

    CMS also is asking for comments on how the 2018 and 2019 cuts should be remedied in the event the court orders HHS to pay back affected 340B hospitals.

    For more information about all these potential issues, please read 340B Health’s in-depth analysis of the proposed OPPS rule.

    Read the proposed rule Fact Sheet from CMS>>



    The Dept. of Health and Human Services (HHS) and a group of hospitals suing the administration over Medicare pay cuts to many 340B hospitals have both asked a federal appeals court to expedite its consideration of the case.

    The American Hospital Association, Association of American Medical Colleges, America’s Essential Hospitals, and three 340B hospital plaintiffs filed the original lawsuit against Medicare 340B cuts imposed in 2018 and 2019. That suit led to rulings from a lower court stating the cuts were unauthorized, but HHS is appealing the decisions to the U.S. Court of Appeals for the D.C. Circuit.

    In a July 24 filing, the hospital groups asked the court to set a briefing schedule, hold oral arguments, and issue an opinion on an expedited basis. HHS agreed with the motion, which proposed that the first brief be filed on Sept. 3 and the final brief on Oct. 11. If the court accepts the motion, it is unclear when the judges would schedule arguments after receiving briefs or when they would issue a decision once they had heard from both sides.

    Part of the urgency surrounding the case involves proposed 2020 Medicare pay rates that would continue the 340B cuts into 2020. The parties want the case resolved prior to when HHS finalizes those cuts, typically in early November. However, it is uncertain whether the appeals court will act in advance of that deadline.

    Contact Amanda Nagrotsky at 340B Health for more information.



    A key Senate committee has approved drug pricing legislation without considering a proposed amendment that would have imposed new claims reporting requirements on 340B hospitals. The amendment could, however, resurface when the full Senate is expected to take up the bill this fall.

    The Senate Finance Committee on July 25 passed the “Prescription Drug Pricing Reduction Act (PDPRA) of 2019” following a legislative markup of the bill. The legislation aims to reduce drug prices across several federal health care programs, including Medicare Part B, Medicare Part D, and Medicaid.

    During the markup, Sen. Bill Cassidy (R-La.) offered and immediately withdrew an amendment that would have required 340B hospitals to use a modifier when billing Medicare or Medicaid to identify 340B drugs that should be excluded from rebates manufacturers are required to pay 340B Health activated member hospitals in opposition to the amendment because of numerous concerns about its implications for 340B hospitals. In withdrawing the amendment, Sen. Cassidy said he hopes the Senate will take up his provisions when they consider the PDPRA on the floor.

    Although the 340B amendment was not considered, the committee’s bill contains provisions with potential implications for 340B. The bill would require drug manufacturers to pay rebates to Medicare if the prices of their medications rise quicker than inflation. By imposing such an “inflation penalty” on drugs covered by Medicare Part B and Part D, the legislation aims to curb price increases and save patients money. Both Medicaid and the 340B program already contain similar provisions.

    The committee-approved version of the bill would exclude 340B drugs from the Part B rebate structure so manufacturers would not pay both a 340B discount and a rebate on the same drug. But the bill does not specify whether a 340B exclusion also would apply to Medicare Part D prescriptions.

    Download the Final Description of the Chairman’s Mark – The PDPRA 20109>>



    Oregon last month became the fifth state to enact legislation prohibiting payment discrimination against covered entities based on their participation in the 340B program.

    Gov. Kate Brown (D) on July 16 signed into law Oregon House Bill 2185, which had passed unanimously in both chambers of the state legislature. The law, which will take effect Jan. 1, 2020, prohibits pharmacy benefit managers (PBMs) registered to conduct business in the state from reimbursing a 340B pharmacy differently than any other network pharmacy-based on 340B status. The statute is similar to those enacted in Minnesota, Montana, South Dakota, and West Virginia.



    RxStrategies met with the 340B Health legislative team to agree upon key 340B talking points used during the recent 340B Capitol Hill Fly-In meetings held July 17-18 in Washington, D.C.

    RxStrategies encourages the use of the materials from 340B Health to support your ongoing communication efforts.

    Contact us if you have any questions or if we can assist in any way.



    Join the RxS team at the following conferences: 

    APHCA Conference
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    Health Connect Partners
    Oct. 28-30 | Kansas City, KS
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    ASHP Midyear Clinical Meeting
    Dec. 9-11 | Las Vegas, NV
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