The View From the Nation’s Capital

Guest Contributor: Ted Slafsky
October 16, 2019

AIR340B Quietly Steps Up Advocacy Efforts

For those who have been involved in 340B advocacy for a while, you will likely have heard of AIR340B. The Alliance for Integrity and Reform of 340B (AIR340B) was launched by the pharmaceutical industry in 2013. Its members include the trade groups PhRMA and BIO, various drug manufacturers, for-profit oncology practices and industry-funded patient and consumer groups. The organization has been run by an influential lobbying and public relations firm in D.C. called Venn Strategies, although it appears that another public affairs firm has recently taken over the account.

Debate Over 340B’s Purpose
AIR340B’s primary goal is to redefine 340B as a program that “directly supports access to outpatient prescription medicines for uninsured indigent patients.” While this mission echoes PhRMA’s long- term goal of significantly narrowing 340B’s scope, it directly contradicts the original intent of the 340B program, which is to enable covered entities “to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” 340B advocates have strongly pushed back against efforts to limit the program to certain patient populations, arguing that, if they weren’t able to acquire drug discounts on all of their outpatient drugs, they wouldn’t have the savings to cover the cost of providing vital health care services to low-income and other vulnerable patient populations. The340B program helps to fund services such as free or low-cost medications, medication management, health counseling, transportation and more.

AIR340B’s Role
AIR340B has a significant social media presence and also hosts its annual National Leadership Summit in Washington, D.C. each spring. The event has regularly featured speeches from members of Congress and industry-funded consultants pushing for 340B restrictions. Among the regulars has been Rep. Chris Collins, a leading 340B critic who recently resigned from Congress after pleading guilty to insider trading. At the same time Rep. Collins was sponsoring legislation that would significantly restrict 340B access, he was the largest investor in a pharmaceutical company and served on its board. Collins acknowledged earlier this month that he had tipped off his son to a failed drug trial and lied to federal investigators. He is awaiting sentencing of up to 57 months in prison.

While AIR340B seemed to be laying low lately, the group has started to reach out again to HRSA grantees — including federally-qualified health centers — to encourage them to lobby Congress to “fix the 340B program.” The effort is led by global communications firm Allison+Partners (PhRMA is one of their clients). In its outreach, AIR340B has been attempting to make the case that the program is rife with abuse and that 340B hospitals are to blame. In their communications, they say “due to abuses, [340B] has actually caused prescription drug costs to increase.” They also argue that “in light of (insurance) coverage gains since 340B was enacted, the program should be refocused on patient access.”

AIR340B’s tactics are not new. The pharmaceutical industry has been trying to create division between 340B hospitals (the program’s largest purchaser of pharmaceuticals) and the grantees for many years. But what is interesting is that after a time when AIR340B activity had seemed to dissipate, the group is relaunching its grassroots and public relations efforts. So far, the 340B provider community has remained united in opposing “reform.” They realize that the pharmaceutical industry’s ultimate goal is to fundamentally change how 340B works.  

New Messaging Aimed at Narrowing Program Scope
Just recently, AIR340B unveiled a fancy new infographic that lays out three steps it says will “get the program back on track”:

  1. Define a 340B eligible patient: Today, lax program requirements have allowed some hospitals to game the program and claim discounts for medicines given to patients that weren’t even treated at a 340B facility. Clarifying the definition of a 340B-eligible patient will help ensure 340B DSH hospitals are using the program to help needy patients.
  2. Transparency for 340B DSH Hospitals: Unlike federal grantees that are required to report how they use 340B to support the patients they serve, participating DSH hospitals face no reporting requirements. As a result, there is no way for the Administration to know if these hospitals are using the program appropriately. Reporting requirements are needed to provide a line of sight into hospital use of the program and to ensure 340B discounts are targeted to facilities serving vulnerable communities.
  3. Restrict Contract Pharmacy Arrangements: While the program was created to support non-profit entities, for-profit retail pharmacies like Walgreens and CVS have flooded the program and are able to split some of the profit with hospitals. Policymakers should re-evaluate the role of contract pharmacies and determine if their participation is helping patients.

Expected Impact
With a divided Congress, the chance of these proposed program changes becoming law remains doubtful. I suspect that AIR340B is hoping the Trump Administration will tackle these issues through the regulatory process. If the Administration moves forward on its own, I expect even more unity among 340B stakeholders in opposition to these measures. This is particularly the case when it comes to the definition of patient and the contract pharmacy program. The 340B community is quite concerned about efforts that would limit which patients qualify for the program. In addition, 340B covered entities have found partnerships with contract pharmacies to be mostly a win-win. Through contract pharmacies, patients are able to conveniently access medicines closer to home – and as a result, the contract pharmacy program allows covered entities to leverage the 340B program to offset losses from uncompensated care and services.

Even additional reporting requirements for hospitals may not get much traction from HRSA grantees. Hospitals have pointed out that they are already subject to significant government reporting requirements on their commitment to low-income, uninsured and underinsured patients, as well as the greater community. If more detailed and time-consuming reporting requirements are placed on hospitals, it’s easy to imagine these same requirements might eventually be expanded to health centers, Ryan White clinics and other grantees.

It will be interesting to watch how this plays out, and stakeholders should continue to monitor the situation. However, if covered entities stay vigilant and remain as highly engaged in advocacy as they are today, I expect the pharmaceutical industry’s plan to divide the 340B community will be an exercise in futility.


Other “View From the Nation’s Capital” Posts from Mr. Slafsky:

Recent 340B Developments of Interest – September 2019
Key Takeaways from the 340B Coalition Summer Conference – August 2019
Clearing Off the Desk – Part 2 – June 2019
A Welcome Addition to the 340B Debate – May 2019
Clearing Off the Desk – April 2019
Be Vigilant on State 340B Activity – March 2019

Ted Slafsky, a leading pharmaceutical policy thought leader, is Publisher & CEO of 340B Report, the first and only independent news service covering the federal 340B drug pricing program.  He is also Founder & Principal of Wexford Solutions, a Washington, D.C. based firm that provides government relations, communications, and business development services. You can follow Mr. Slafsky on Twitter at @tslafsky or reach him at [email protected] or (703) 517-1325.


About 340B Report:

340B Report is the only independent news service that provides breaking news and analysis about the federal 340B Drug Pricing Program. We follow all 340B program developments big and small—in federal government agencies, Congress, courts, the states, associations, the private sector, academia, and more.