grey arrow to go to previous Omnicell webpage or forward to next Omnicell pageBack to Blog

August 17, 2022

In the Face of Resistance, 340B Coalition Summer Conference Proves Program’s Worth

Jeff Spencer
Senior Director, 340B Sales and Account Management

I was excited to join nearly 1,900 pharmacy leaders from Covered Entities (CEs), as well as government officials and solution providers at the 2022 340B Coalition Summer Conference in National Harbor Maryland, earlier this month. The event provided 340B stakeholders with the opportunity to attend educational sessions and network with peers to address program challenges and exchange insights, ideas, and success stories. The 2022 conference also marked the 30-year anniversary of the 340B Drug Pricing Program, which since 1992 has required pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted rates to healthcare organizations serving vulnerable communities. While the program’s storied history gave conference attendees much to celebrate, the conference also served to shine a spotlight on the challenges currently facing 340B. The following are some key takeaways from the conference.

Pharma restrictions, midterm elections cause stress for CEs

The size and scope of the 340B program has increased significantly since it was enacted 30 years ago. According to recent data from IQVIA, 340B program sales grew 15.9% in 2021, reaching $93.6 billion versus total pharmaceutical sales of $668.3 billion.

While beneficial for CEs, the growth of 340B has not been popular with pharmaceutical manufacturers who see program sales accounting for a greater share of revenue and the associated federally enforced discounts eating into profit margins. To date, we've seen 18 pharmaceutical manufacturers, including Johnson & Johnson, Novartis, and Merck, impose unilateral restrictions on 340B discounts when drugs are dispensed at community pharmacies.

According to 340B Health, these actions are in violation of the 340B statute, which states that manufacturers must provide 340B pricing on any eligible drug to any eligible CE regardless of how the CE intends to dispense the drug. These restrictions are also causing hardships for CEs and 340B program administrators.

During an Omnicell-hosted View from Capitol Hill Luncheon and Panel Discussion, Cathy White, 340B Pharmacy Financial Analyst at Cone Health, explained how manufacturer restrictions have impacted her organization.

“When the first wave of pricing restrictions occurred, we were able to weather the storm,” said White. “However, this is becoming more difficult as restrictions increase. This year our 340B program is operating at a loss as a direct result of the discount restrictions imposed by pharmaceutical manufacturers.”

The panel of 340B experts also discussed the impact the upcoming midterm elections could have on the program. The overall sentiment is that if the GOP gains control of the House and/or Senate as expected in November, Congress could look to shrink the overall scope of the 340B program.

Inflation Reduction Act may further disrupt 340B

Another focus of discussion during the conference was the Inflation Reduction Act, (IRA) — specifically the potential downstream Impact of drug pricing reform measures in the Act that will allow Medicare to negotiate with pharmaceutical manufacturers for lower prescription drug prices. While the Act is likely to affect the size of 340B savings for some drugs, the full extent of these effects is dependent on multiple, complex factors that are difficult to predict.

For example, some believe the value of the 340B discount could decrease over time as more drugs become subject to lower Medicare-negotiated prices. However, since the IRA does not control launch prices, many also expect pharmaceutical manufacturers to increase the prices of new drugs to offset losses due to annual inflation caps and eventual Medicare-negotiated discounts. Assuming no changes to 340B, higher launch prices will ultimately make the program more valuable.

The exponential impact of 340B

Opponents of 340B argue that the program lacks oversight and that benefits rarely reach the vulnerable patients it is intended to serve. Numerous sessions at the 340B Conference provided concrete evidence to the contrary.

For example, Chuck Stubbs, 340B Pharmacist at Intermountain Healthcare, outlined how his organization was able to provide cost savings to patients with diabetes via the program while improving clinical outcomes. Stubbs cited an average drug savings per patient of more than $3,900 and a significant decrease in diabetes-related hospitalization and ER costs.

Jangus Whitner, Director of Pharmacy Services at PrimaryOne Health also shared the results of a qualitative research study that documented direct patient experiences using the 340B program on injectable diabetes medications. Surveyed patients cited numerous program benefits, including improved pricing, increased access to care, better medication adherence, and an overall positive impact on health and wellness. Patients also cited unaffordability, increased rationing or dose skipping, and suboptimal medication regimens as key consequences of being without 340B. Whitner also highlighted the value surveyed patients receive from the ancillary services PrimaryOne Health has been able to fund as a result of 340B savings including dietitian and nutrition counseling, women’s health services, and vision and dental care.

Former Surgeon General of the United States, Jerome Adams, MD echoed the importance of 340B savings in funding programs that address Social Determinants of Health (SDOH) in his keynote at the conference. These demographic and sociographic variables have been shown to account for as much as 80% of healthcare outcomes. According to Dr. Adams, 340B savings are being leveraged to fund dietary, transportation, mental health, and other programs that directly address SDOH and promote the development of what he calls “high opportunity neighborhoods.”

It was clear from the discussions and presentations during the 340B Coalition Summer Conference that CEs are looking for ways to minimize the impact of mounting drugmaker restrictions and political volatility while optimizing program savings to better serve patients. Omnicell can be a valued partner in this effort. Learn how our full suite of outpatient pharmacy services, including 340B program administration and specialty pharmacy management, can help you maximize the potential of your 340B program.

The Omnicell Blog is the leading source for pharmacy care, exploring emerging trends, successful best practices, and ideas and insights focused on the digital transformation of pharmacy. Subscribe today.

The views and opinions expressed in this blog are those of the authors. They do not necessarily reflect the official policy or position of any other agency, organization, employer, or company. Assumptions made in the analysis do not reflect the position of any entity other than the author(s). These views are always subject to change, revision, and rethinking at any time and may not be held in perpetuity.