S.2312 would establish onerous and unnecessarily intrusive reporting requirements that stand in stark contrast to the lack of transparency into the pricing practices by manufacturers

  • S.2312, “HELP” Act, was introduced by Senator Cassidy (R-LA) on January 16, 2018.
  • Even though most of S.2312’s transparency requirements do not apply directly to Ryan White clinics (RWCs), they would set a troubling precedent of extracting and publicizing private information that goes well beyond the reporting requirements applicable to RWCs under their grants and subgrants.
  • RWC-340B supports transparency within the 340B program but the proposed reporting requirements are intrusive and unfair compared to the meager disclosure requirements applicable to manufacturers.
  • S.2312’s requirements stand in stark contrast to manufacturers’ complete freedom to hide their pricing information from the public. In 1990, Congress acquiesced to manufacturer demands to adopt an industry-specific law that keeps their drugs’ average price and best price in the marketplace completely hidden from public scrutiny.
  • The blatant imbalance in transparency requirements applicable to covered entities versus manufacturers would be exacerbated by S.2312, even though such lack of parity is patently unfair and must be rectified.

S.2312 reflects a misunderstanding of the 340B program’s purpose which could result in a narrowing of the 340B program’s size and scope.

  • The 340B program is critically important to RWCs because it gives RWCs the resources to fill the gaps in care that otherwise prevent people diagnosed with HIV/AIDS from achieving viral suppression.
    • RWCs deserve to participate in the 340B program because they offer patient-focused comprehensive care and specialized services for people living with HIV/AIDS that are not otherwise available in their communities.
    • Many of the services provided by RWCs – including testing, linkage to care, retention in care, medication adherence, case management, and arranging for transportation and housing – are unreimbursed or under-reimbursed by payers, though these services most directly reduce viral loads and control the epidemic from spreading.
  • S.2312’s reporting requirements – by focusing on charity care and demanding utilization data that overstates the benefit of the 340B program – reflect a much narrower understanding of how providers should qualify for the program and how the program should be used.
    • Many RWCs would be disqualified from the program if charity care is used as a primary basis for covered entity eligibility. And many of their patients would be disqualified if such data is used for assessing patient eligibility.  Data gathering geared toward limiting the number of safety net providers or eligible patients in the 340B program would inevitably result in significant reductions in program savings, increased costs for safety net providers, and decreased patient care.
    • The benefit of participating in the program is the savings resulting from purchasing covered outpatient drugs at a 340B price rather than a higher non-340B price. S.2312 overstates the benefit by requesting information about reimbursement that the covered entity would have received irrespective of its 340B status, rather than savings data which is the difference between 340B and non-340B drug costs.
    • Collection and publication of such misleading data would only provide ammunition to critics who claim that the program is too big and should be downsized.

Enactment of S.2312 would accelerate discriminatory reimbursement by pharmacy benefit managers and other payors, undermining the purpose of the 340B program

  • Pharmacy benefit managers, managed care plans and other third party payers are increasingly usurping the benefit of the 340B program from covered entities by reimbursing 340B drugs well below the payers’ non-340B rates and by establishing other discriminatory terms in their pharmacy participation agreements.
  • S.2312’s billing modifier requirements would provide payers with the claims-level data they need to expand and institutionalize this practice of misappropriating 340B savings and revenue to the detriment of all covered entities, including RWCs and their patients.
  • Unless enactment of these new billing modifier requirements is accompanied by a statutory prohibition against reduced reimbursement and other discriminatory practices by payers, RWC-340B must strongly oppose such requirements.

The two-year retroactive moratorium on new hospital sites would limit necessary resources and interfere with the continuum of care needed by the HIV population

  • RWCs have referral relationships and other kinds of partnerships with 340B hospitals as a way to provide continuous care to people living with HIV/AIDS.
  • By freezing enrollment of new hospitals and new hospital sites, even temporarily, S. 2312 will shrink hospital resources to care for the HIV/AIDS population at a time when drug prices are continuing to rise.
  • Such action will deprive both hospitals and RWCs from the best means available to control increasing drug costs – the 340B program. Ultimately, a freeze would harm patients by shifting the burden of care from hospitals to RWCs.
  • Congressional intervention of this nature sets a dangerous precedent and raises the question of whether RWCs will be the next category of safety net providers to face a freeze.

For further information, contact Peggy Tighe at Peggy.Tighe@PowersLaw.com or visit RWC340B.org.