Powers Principal Bill von Oehsen and Jeffrey Lewis of Legacy Health Endowment published a white paper recently that discusses the intersection of the 340B program and pharmacy benefit managers (PBMs).
The purpose of the 340B program is to provide relief to safety net hospitals and clinics from high drug prices by requiring drug manufacturers to offer significant discounts on outpatient drugs when selling to such providers. Recently, however, PBMs have been usurping the benefit of the program by cutting reimbursement on 340B drugs, which essentially transfers the 340B discount from safety net providers to for-profit payers. The paper provides an overview of how the PBM industry intersects with the 340B program and how legislation is needed to protect the program from discriminatory contracting practices by PBMs in the areas of reimbursement, claims identification, network participation and patient choice. The paper begins with a brief description of PBMs and then analyzes both how PBMs are affecting the 340B program and how the 340B safety net community has engaged in advocacy to protect against discriminatory contracting by PBMs.
The paper is the first in a series of white papers that will be published over the next year that will explore the intricacies of the 340B program, how the program is being used to advance public health and to save taxpayer dollars, and recommendations that elected officials could consider to improve the program.
Bill von Oehsen has extensive experience in general health law, legislation and policy, especially in the areas of pharmaceutical pricing, food and drug law, materials management, managed care and third party reimbursement. He has more than 27 years of experience on pharmaceutical pricing and reimbursement matters, including the 340B drug discount program, the Medicaid drug rebate program, Medicare Part D, Robinson-Patman, and state Medicaid and pharmacy laws. In addition to representing safety-net providers participating in the 340B program, Bill provides guidance to pharmacies, pharmacy-related vendors and consultants, states, local governments, and other healthcare entities in their efforts to improve access to pharmaceutical care and to ensure compliance with drug pricing laws.