We’ve noticed that Eli Lilly and Co. has been taking pot shots at the 340B program calling for more oversight and transparency.
This from a company that agreed to plead guilty and pay $1.4 billion for promoting its antipsychotic drug Zyprexa for uses not approved by the Food and Drug Administration including marketing it to elderly patients with dementia. Health care providers serving the poor received $750,000 as part of a related False Claims Act settlement and Lilly is still operating under a Corporate Integrity Agreement with the feds as part of the deal. Two years ago, the company paid $29 million to settle Security and Exchange Commission charges that its subsidiaries bribed government officials in Russia, Brazil, China, and Poland to win millions of dollars of business. A parallel Justice Department investigation is ongoing.
Meanwhile, Lilly executives have been recruiting other drug companies to join the industry-funded AIR 340B campaign. When SNHPA and other 340B provider groups recently called upon HHS Secretary Sebelius to move forward with long-awaited steps to increase transparency such as posting 340B prices and requiring manufacturers to explain how an overcharge occurred, AIR 340B described the recommendations as “a distraction.”
And if that isn’t enough, Eli Lilly devoted much of World Cancer Day (Feb. 4) to make offensive and unfounded comments on 340B and patient care.
Shame on Lilly.
Shame on AIR 340B.
To view a full list of AIR 340B members, click here.
Iowa 340B hospital Hancock County Health System was profiled by their local news station. The focus was patient access to medication through 340B. Click the video below to view the segment.
Perhaps the most misreported number in the 340B debate is the number of pharmacies that have contracts with 340B healthcare providers. That number currently stands at 13,833.
The confusion comes from the way the Office of Pharmacy Affairs tracks contract pharmacies in its database. Instead of listing these brick-and-mortar stores only once, the agency counts the number of contracts between a 340B provider and a pharmacy. The confusion? The database often includes multiple contracts between a single pharmacy and different divisions of a hospital or between one pharmacy and multiple healthcare centers – so these same pharmacies are listed multiple times. The system also keeps pharmacies on the list that have terminated their contract with a 340B provider.
To unaware observers – and our critics who know better – the system leads to massive over counting of 340B contract pharmacies. Remove the pharmacies listed more than once, scrub the ones that have been terminated and you get 13,833. We will update this number as new data becomes available from OPA.
Why is this important? Because the growth in the number of 340B contract pharmacies is far lower than Big Pharma wants you to believe. According to the Health Resources and Services Administration, 82 percent of 340B providers dispense outpatient medicines through an in-house pharmacy. Of the remainder, 75 percent use fewer than five contract pharmacy arrangements.
U.S. hospitals provided a record-high $45.9 billion in unreimbursed care to indigent and underinsured patients in 2012, an 11.7 percent increase over 2011, according to a new American Hospital Association (AHA) report. The uncompensated care total includes charity care and bad debt but excludes Medicaid and Medicare underpayment. 340B hospitals provide 62 percent of all hospital uncompensated care in America, AHA noted last month in an infographic about the 340B program.
Hospitals have provided $347.7 billion in unreimbursed care since 2003, AHA says. Bad debt and charity care accounted for 6.1 percent of total hospital expenses in 2012, the highest such percentage in a decade.
Congress created the 340B program to help safety-net health care providers cope with the cost of uncompensated care. Hospital unreimbursed care has risen from $14.7 billion in 1992, the year that 340B was established, to $45.9 billion in 2012. Total U.S. spending on prescription drugs skyrocketed during the same period, from $47 billion to $326 billion.
Americans taking high-cost medications are finding that mid- to lower-tier health plans offered through the new insurance exchanges often don’t cover their prescriptions adequately. Many could end up underinsured, making the 340B program even more critical to keeping them healthy.
Critics contend that insurance carriers are purposefully designing plans with weak pharmacy benefits for patients with expensive conditions like AIDS, cancer, and multiple sclerosis to discourage sign ups. Insurers say their products meet all federal requirements, but that’s cold comfort to patients who have no way to cover the high co-insurance rates that these plans set.
The Wall Street Journal reports on a letter sent by 31 HIV/AIDS organizations to Secretary of Health and Human Services Kathleen Sebelius noting “disturbing trends” and “egregious cost-sharing designs.”
For example, the group says that Aetna requires Florida patients to cover half of drug costs, after the deductible. Humana’s list of covered HIV drugs in Florida and Alabama lists just six HIV medicines and also includes a 50-percent copay.
“The easiest way [for insurers] to identify a core group of people that is going to cost you a lot of money is to look at the medicines they need and the easiest way to make your plan less appealing is to put limitations on these products,” Marc Boutin, executive vice president of the National Health Council, told The Washington Post.
Another problem: The law is so new, it’s unclear exactly what constitutes discrimination by an insurer.
“You are not supposed to design policies that discriminate, but what does it mean for a plan to be discriminatory? We don’t know that yet,” Kevin Lucia, a research professor at the Center on Health Insurance Reforms at Georgetown University told the WSJ.
The American Hospital Association has designed an informative 340B infographic that puts the program’s benefits and vital statistics on one page. This is an outstanding illustration and we encourage you to pass it along to others.
Among the highlights:
- 66: Percentage of all uncompensated care provided by 340B hospitals
- 1.6 to 3.2: Billions of dollars per year in savings for 340B providers to fund services
- 46: Percentage of U.S. counties that are home to a 340B provider
- 2: Percentage of U.S. annual drug sales made through 340B
For more information about this graphic, see the American Hospital Association website.
It’s worth remembering that Congress created the 340B program more than 20 years ago to require highly profitable drug manufacturers to provide safety-net hospitals and clinics with discounted pricing on outpatient medications. In turn, the hospitals and clinics pass on a price break to low-income patients and other vulnerable populations.
Congress also intended for these healthcare providers to buy medicine at a discount, bill insurance companies for it at market rates, and then use the savings to improve and expand primary care and more complex and expensive treatment for cancer, AIDS, diabetes, and other diseases and conditions. The program is critical to health care providers serving a high-volume of care to low-income, uninsured and undersinsured patients.
Critics complain that the program is too big and that providers in the program are “profiting” from 340B. But in truth, 340B helps keep these safety net institutions running and enables patients to get care in their communities. Take for instance, the small town of Greensburg, IN. Recently, the local Decatur County Memorial Hospital had to lay off 10 percent of its workforce. Administrators are now looking to 340B savings to help keep the doors open and ensure that their patients can continue to get the hiqh-quality health care they deserve.
Similar critical-access hospitals as well larger urban and community hospitals are facing steep cutbacks under the Affordable Care Act, making the 340B program crucial to maintaining healthcare services in their communities.
Read our op-ed here.
It doesn’t pass the smell test when your critics demanding integrity have once again coughed up millions to settle a massive Medicaid billing fraud suit.
Alliance for Integrity and Reform of 340B (AIR340B) members Eli Lilly and Baxter Healthcare have together returned $2.9 million to the state of Louisiana for allegedly overcharging the state’s Medicaid program. The final phase of the three-year investigation was announced Monday by the state’s attorney general, Buddy Caldwell. More than 53 pharmaceutical companies agreed pay back a total $238 million.
“These companies took advantage of the state and its taxpayers by fraudulently over-pricing and marketing prescription drugs, thereby forcing the state’s Medicaid program to grossly over-pay for those prescriptions,” said Caldwell. See the full dishonor roll here.
Johnson & Johnson—whose Janssen unit is an AIR340B member— previously paid Louisiana $10 million to settle its portion of the state’s Medicaid fraud suit. Earlier this month, it paid the federal and state governments $2.2 billion to settle a slew of civil and criminal claims, mainly over the illegal marketing of its antipsychotic Risperdal and several other medicines. And, less than a week earlier, J&J was accused in California of cheating on 340B discounts for AIDS drugs.