Hospital and pharma jockeying over 340B puts lawmakers into a tight spot

A late-December protest of U.S. Rep. Scott Peters' district office in San Diego by AIDS groups morphed into an ongoing advertising campaign against the California Democratic congressman in what has become the most public battle in the intense lobbying war over 340B.

This war, mounted by Big Pharma and hospitals affected by the $1.6 billion annual cut the HHS has imposed on 340B hospitals, has left lawmakers who want to have a voice in 340B policy struggling to strike a balance between the two groups' interests. Moreover, there is not complete agreement within the hospital industry as to how Congress should proceed on 340B.

The representatives are shifting their own strategies as they vie for a role in the 340B legislation expected in March out of the House Energy & Commerce Committee.

In a conversation with Modern Healthcare, Peters dismissed the campaign against him by the AIDS Health Foundation him as irrelevant to his proposed legislation.

"If they come and picket, we can explain the moratorium doesn't affect their facilities," Peters said, adding that when he spoke to Weinstein and his group they framed "any reform" as "an attack on the program."

"I just have to deal with that kind of attitude," he said, adding that for him the issue is one of "accountability."

The San Diego radio and television ad campaign, launched by Michael Weinstein of Southern California's AIDS Health Foundation, started after Peters signed on to a bill by his Republican colleague Rep. Larry Bucshon (R-Ind.) that puts a two-year moratorium on new hospitals enrolling in 340B and raises reporting requirements for those that already are, with some exceptions for entities like HIV/AIDS clinics and rural stand-alone hospitals.

The bill was released with little fanfare on Dec. 21, the day Congress recessed for the year. Days later AIDS activists picketed Peters' office.

Weinstein, who also backed a 2016 California ballot initiative on drug pricing, frames the battle as an opposition to Big Pharma, and he's committed to it even though the Bucshon-Peters bill doesn't hit HIV/AIDS patients directly.

"340B represents 2.8% of the total drug market," Weinstein said. "The whole campaign against 340B is being waged, engineered, planned by Pharma, and so the people who are backing these changes are doing the bidding of Pharma. This program is not broken, it's not in need of repair, it's not without oversight, it's a solution looking for a problem."

Weinstein notes that Peters is the only Democrat of the Energy & Commerce Committee he has spoken with who supports this change to the program.

The AIDS Health Foundation's intense campaign hasn't driven Peters, whose San Diego district includes Sorrento Valley—home to biotechnology headquarters like Arena Pharmaceuticals—out of his co-sponsor's slot on the Bucshon bill.

Still, nearly a month into the group's constant running of ads against him, Peters added his name to an entirely different 340B bill by Rep. David McKinley (R-W.V.). This legislation would essentially block the HHS Medicare cuts to 340B hospitals. In a way this wasn't a departure from his agenda: He had already signed on to a letter from Dec. 20—the day before he and Bucshon released their bill—that asked House leadership to put a moratorium on these cuts before they went into effect Jan. 1.

So Peters framed his new support for the McKinley effort as a continuation of his past resistance to the HHS cuts.

Peters also framed his co-sponsorship of the Bucshon bill as an opportunity to improve it for hospitals. For example, he said, he felt that Bucshon's original idea of a five-year moratorium on hospitals entering the 340B program was too harsh and so he was able to reduce it to a two-year moratorium instead.

"I wanted to hit the pause button, and make sure the benefits are going to the right people," Peters said.

But Peters' decision to add his name to the McKinley bill shows a recent shift in how House lawmakers are handling the 340B issue as they try to balance demands of two powerful industry groups.

Peters, for example, wants the McKinley bill that blocks the HHS cuts to ride along with the Bucshon bill, which committee lawmakers say is likely to be included in the packet of legislation due out of the E&C Committee.

Along with transparency measures and reporting requirements, this package of bills will include a "patient definition" measure by Rep. Chris Collins (R-N.Y.) that would limit which individuals qualify for the 340B drug discount.