The issue also prompted the trade group to contact Express Scripts last year with an offer: If the company formally agreed not to engage in the reduced reimbursement practice, the safety net hospitals would withdraw plans to publicly oppose the deal with Medco, according to a Dec. 2 letter that Express Scripts sent to Sens. Orrin Hatch (R-Utah) and Charles Grassley (R-Iowa).
Express Scripts wrote that it would “never agree” to back away from “routine contract negotiations which result in greater retail pharmacy discounts on behalf of our clients, including the federal government through the Medicare Part D program.”
Greg Doggett, the SNHPA's associate counsel, confirmed that the trade group had contacted Express Scripts with concerns about potential reimbursement rate reductions. He said the association also contacted the Health Resources and Services Administration, the HHS division that oversees the 340B program, in August about Argus Health Systems' use of a contract addendum that limited reimbursement for 340B drugs. Argus provides information management services to PBMs, managed-care organizations and drug manufacturers. A similar letter, Doggett said, was sent last September to OptumRx, the PBM subsidiary of UnitedHealth Group. William von Oehsen, the association's general counsel, said safety net hospitals are “very, very concerned that this trend will eviscerate the program.”
The number of covered entities participating in the program has nearly doubled over the last decade, from 8,605 in 2001 to 16,572 in 2011, according to the GAO. The number of participating hospitals rose from 591 in 2005 to 1,673 in 2011, with disproportionate-share hospitals now purchasing 75% of all 340B drugs, the GAO found.
The Patient Protection and Affordable Care Act expanded 340B eligibility to include critical-access hospitals, free-standing cancer hospitals, rural referral centers and sole community hospitals. Also in 2010, HRSA issued guidance that allows covered entities to contract with more than one pharmacy. The GAO noted that “some stakeholders we interviewed, such as drug manufacturers, have questioned whether all of these hospitals are in need of a discount drug program.”
Increased participation in the program has triggered concern with some lawmakers.
Last week, Rep. Joe Pitts (R-Pa.) and Sens. Michael Enzi (R-Wyo.), Grassley and Hatch requested information from the Biotechnology Industry Organization, the Pharmaceutical Research and Manufacturers of America, SNHPA and Apexus, the company that manages the 340B prime vendor program. The letters cite the GAO's assessment of federal oversight of the program as “inadequate” and overly reliant on “self-policing.”