September 340B Insider

    RxStrategies Updates

    RxStrategies is pleased to introduce the newest member of our team. Rhodie Smith has joined the RxS team as National Sales Manager. Rhodie brings over eight years of experience working with the 340B program, as well as extensive knowledge of PBMs and health care. He began his tenure with RxS on Sept. 1, 2014 and resides in the Atlanta area. Read the full news release, “RxStrategies, Inc. Names Rhodie Smith National Sales Manager.”

    Oregon to Restrict Access to Costly Hepatitis Medicine

    For the Associated Press, Jonathan Cooper reported on July 31, the Oregon Medicaid committee “significantly” cut access to Sovaldi (Sofosbuvir), the costly hepatitis C treatment from Gilead Sciences, Inc. The AP noted that medical experts on Oregon’s pharmaceutical review committee “question whether the drug is worth the price tag, and officials worry it would break the bank.” They argued that if the state were to treat all Medicaid patients suffering from hepatitis C, the cost would amount to “almost as much as last year’s entire drug bill.”

    Illinois Implements Strict Criteria for Administering Sofosbuvir

    Ed Silverman withThe Wall Street Journal reported Aug. 3, 2014 that the per-patient cost of the Sovaldi hepatitis C treatment of more than $84,000 is leaving state Medicaid programs with difficult choices. The Journal noted that officials in Illinois have implemented a set of 25 criteria for using the treatment, including treating only patients with the most advanced stage of liver disease and limiting treatments for patients with a history of drug use and alcohol abuse. The Journal interviewed Dr. Arvind Goyal, medical director for the Illinois Department of Health Care and Family Services, about the process.

    Margot Sanger-Katz wrote in the New York Times “The Upshot” blog on Aug. 2, 2014 that the cost of the drug has prompted lawmakers to begin “a joint investigation into how its maker, Gilead Sciences, settled on its price.” Sanger-Katz wrote, “But maybe we are looking at the costs of Sovaldi in the wrong way. One reason it is causing such angst among insurers and state Medicaid officials is that treatment costs are coming all at once.” Unlike drugs for other chronic conditions, “for which treatment continues over many years, Sovaldi can cure most patients’ hepatitis in just a few weeks, with the bill soon to follow.” Sanger-Katz wrote, “Think about AIDS treatment as paying a mortgage. Sovaldi is like buying a house with cash.”

    HRSA Expectation on Orphan Drug Ruling

    The Department of Health and Human Services (HHS) issued an interpretive rule on July 21, 2014, which interprets section 340B(e) of the Public Health Service Act (PHSA) as excluding from the 340B Drug Pricing Program (340B program) drugs that are transferred, prescribed, sold, or otherwise used for the orphan drug-designated rare condition or disease. It clarified that Section 340B(e) of the PHSA does not exclude from the 340B program drugs that are transferred, prescribed, sold, or otherwise used for conditions or diseases other than that for which the drug was designated.

    The Orphan Drug Interpretive Rule issued by the Health Resources Services Administration (HRSA) is not binding on manufacturers and covered entities. However, the statute itself is binding on manufacturers and covered entities and does establish binding norms and requirements. A manufacturer’s or covered entity’s failure to comply with the statutory requirements could subject a manufacturer or covered entity to an enforcement action by HRSA, which could include refunds to covered entities in the case of overcharges, as well as termination of a manufacturer’s pharmaceutical pricing agreement (PPA). In deciding whether, and in what circumstances, to take enforcement action, HRSA will inevitably be required to interpret the statute. In accordance with the Administrative Procedure Act, HRSA has provided its interpretation of the statute to stakeholders in the 340B community by issuing the Orphan Drug Interpretive Rule.

    Manufacturers’ Response

    According to Apexus, the federal-awarded 340B prime vendor, there are at least five manufacturers (Amgen, American Regent, Astellas, Aptella and Fresenius) that have communicated they will be providing 340B prices on orphan drugs when used for the non-orphan indication. The majority of manufacturers have declined to sell drugs at 340B prices to the affected entities. A much larger list of manufacturers have either provided documentation to wholesalers of their decision not to honor such sales or are currently denying all chargebacks on 340B sales of their orphan drugs to these entities. Many manufacturers have yet to make a final decision and are in the process of consulting with their internal and external legal councils on the matter.

    Wholesalers’ Response

    The wholesalers are aware of HRSA’s interpretation and challenged, due to their desire to support their hospital customers, while they must support and respect the independent decisions of each manufacturer. The wholesalers are currently at risk of chargeback denials, and financial losses, on 340B sales, as each manufacturer works through the process of making the decision on whether to offer 340B prices on their orphan drugs to these entities separately. Some wholesalers have taken a more conservative financial position in not extending 340B pricing to the entities, unless notified by the manufacturer that they agree to honor such sales. The market is expected to be inconsistent as manufacturers and wholesalers work through the issues. The orphan drug issue only impacts critical-access hospitals, sole-community hospitals and rural-referral centers.  FQHCs, FQHC-LAs and DSHs are not impacted. For additional information and concerns regarding the orphan drug ruling, forward questions to

    Longtime Advocate for Community Health Centers and Parkland Health Leader Dr. Ron Anderson Dead at 68

    By Beth Kutscher
    Posted: Sept. 12, 2014 – 4:15 pm ET
    Modern Healthcare

    Dr. Ron Anderson, the longtime leader of Parkland Health & Hospital System, who was remembered for his efforts to expand healthcare access to underserved communities, died September 11, 2014 from cancer. He was 68, the Dallas-based system said on its website.

    Anderson was named Parkland’s president and CEO in 1982 and served in that role for 29 years. He previously was medical director of Parkland’s emergency room and outpatient clinic and led the internal medicine division at the University of Texas Southwestern Medical Center.

    Anderson was known for speaking out against “patient dumping”—or transferring medically unstable, uninsured patients from private to public hospitals. Those efforts led to Texas banning the practice in 1986.

    Driven by a vision that everyone should have access to healthcare regardless of ability to pay, Anderson helped develop a network of health centers, primarily in low-income communities, which formed the basis of Parkland’s Community Oriented Primary Care program. The safety net hospital won a number of awards for its community-based programs and, in 2004, the American Hospital Association bestowed Anderson with its Award of Honor for his efforts.

    Parkland will rename the clinic on its new hospital campus, which will open next year, the Ron J. Anderson, MD Clinic. It also established a fund in his honor.

    Health Center Expanded Services Awards Announced

    On September 12, 2014, Health and Human Services Secretary Sylvia M. Burwell announced Health Center Expanded Services awards of $295 million for 1,195 health centers. The Expanded Services awardees are expected to increase access to comprehensive primary care services by hiring an estimated 4,750 new staff, including new health care providers, staying open for longer hours, and expanding the care they provide to include new services such as oral health, behavioral health, pharmacy and vision services.

    Read the press release for more information.

    View the list of award winners by state

    ACA open enrollment for 2015 causing anxiety for plans, providers

    By Paul Demko
    Sept. 13, 2014 – 12:01 am ET
    Modern Healthcare

    During the 2014 open enrollment for Obamacare coverage, Mary Denson, 21, a student at Columbia (Mo.) College, qualified for a federal premium subsidy that reduced her premium contribution for buying health insurance to less than $20 a month.

    But she fears that when she renews her coverage for 2015, she won’t have enough income from her nanny job to reach the subsidy income threshold of 100% of the federal poverty level and continue qualifying for premium tax credits. She isn’t eligible for Medicaid, because Missouri hasn’t expanded that program for low-income adults. Denson says she’s considering looking for another job to reach the $11,670 income threshold, but worries she may have to drop classes. Without the subsidy, her coverage would cost nearly $400 a month, far more than she can afford.

    “I’m just going to have to re-apply and pretty much hope that I make the cut again,” Denson said.


    Reminder: Open Enrollment for New 340B sites and Contract Pharmacies is Oct. 1-15, 2015. Eligibility to begin Jan. 1, 2015.