The View From the Nation’s Capital

More States Embrace 340B Program as a Win-Win for Taxpayers, Patients and the General Public

Since I started my column earlier this year, I have written a number of pieces on the unprecedented attention that the 340B program is facing in state capitols. One of the more exciting developments is the growing interest among states to partner with 340B covered entities to lower costs and improve health outcomes for incarcerated populations.

Correctional partnerships reduce costs and improve care
State policymakers have focused a great deal of attention on figuring out ways to leverage the 340B program to improve care and lower drug costs for state prison populations. The National Governors Association and Pew Charitable Trusts have both recently published reports encouraging states to explore these partnerships. At least 17 state correctional facilities currently partner with 340B providers for purchasing and providing care to inmates. The states have generally restricted use to individuals with highly complex and expensive therapies, such as those who have contracted HIV/AIDS, the Hepatitis C virus (HCV), or hemophilia. However, there is a growing interest in expanding this care model to other inmates.

Texas, one of the forerunners in 340B collaboration, has reduced drug costs by 60 percent over the past five years, according to Pew. The state credits its 340B partnership with UTMB Galveston, a teaching hospital, for keeping drug spending on the incarcerated at levels significantly below national averages. At the same time, the state has met or exceeded the chronic disease quality measures used by health insurers.

North Carolina takes legislative action on 340B
This summer, North Carolina enacted bipartisan legislation that puts the state at the forefront of tackling not only HIV and HCV but also other expensive diseases, including cancer, cardiovascular disease, COPD, epilepsy, mental health, multiple sclerosis and rheumatology.

On July 19, Governor Roy Cooper signed the Inmate Health Care and 340B Program (H106) into law. The bill, which received strong support from both the Republican-controlled legislature and the Democratic governor and lawmakers, has three components:

1. Expand 340B discounts to the STD population. The Department of Public Safety (DPS) will partner with North Carolina’s Health Department to enroll in 340B as a sexually transmitted disease (STD) sub-grantee and use the program to purchase medications, including HIV and HVC drugs, for the STD inmate population. This move is anticipated to generate $8.25 to $8.5 million in annual savings. According to an analysis by Powers Law, which was hired by the North Carolina legislature to provide recommendations on how to implement a partnership, access to 340B savings on HCV medications will likely be even more financially impactful in light of recent class-action litigation.
2. Partner with 340B health system(s) to serve non-HIV/HCV inmates. DPS is issuing a request for proposal (RFP) for a partnership with one or more 340B hospitals to serve non-HIV/HCV populations. DPS is requesting that the hospitals provide both hospital specialty care and 340B pharmacy services to the target population. The correctional partnership could be based on a telemedicine model, a visiting professional model, or some other partnership model that is currently being used in other states. The RFP process would incentivize bidding hospitals to pass much of their 340B discounts to the state to win the bid, which should generate significant savings.
3. Partner with UNC Health Care to receive 340B savings on non-HIV/HCV drugs. UNC Health Care is the state-owned health system, and University of North Carolina physicians see inmates at UNC locations for specialty care. For retail prescriptions written by a DPS physician following a consult with a UNC physician, the law directs that the prescribing authority be shifted from the DPS provider to a UNC provider “in a manner that improves or maintains quality and continuity of care.” Shifting the prescribing authority for these medications would generate additional 340B savings as a result of treatment that is currently being provided at 340B-registered UNC sites. Although a savings estimate is not available, lawmakers believe the savings could be significant for high-cost medications. Additionally, they believe it will improve the quality of care since the UNC specialist will assume primary responsibility for the inmate’s condition while still accommodating the important role of the primary care physician in coordinating the patient’s overall health.

Strong momentum for collaboration
Although there have been some objections over the years from the pharmaceutical industry to apply 340B discounts to the incarcerated, the public health and cost benefits of these arrangements are taking precedence. As state and local governments grapple with providing high-quality care at a low cost, expect to see more of these partnerships. As long as they are carefully structured to abide by the law and are developed in a way that is a win-win for all parties, these opportunities are worth exploring for other states and covered entities, as well.

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

AIR340B Quietly Steps Up Advocacy Efforts – October 2019
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