Tag: 340B Drug Pricing Program

HRSA Announces 340B Rebate Pilot; President Trump Pens Letter on Most Favored Nation Pricing

Member News

The Health Resources and Services Administration (HRSA) issued guidance July 31 on a proposal to shift a portion of the 340B drug pricing program away from an upfront discount model to a rebate model. HRSA guidance indicates permission for certain drugmakers to participate in a rebate model for certain drugs starting January 1, 2026 and allowing the rebate pilot to run for at least one year.

The specific drugs selected for the pilot include those subject to negotiation under the Medicare Drug Price Negotiation for initial price applicability year 2026. The guidance issued outlines pilot program criteria including requirements that any plan submitted by a manufacturer include a platform for data submission paid for by drug manufacturers, and a specific prohibition on passing that cost on to covered entities; requiring 60 days notice to covered entities before implementation of a rebate model; allowance for covered entities to purchase pilot covered drugs through existing distribution mechanisms; requirements for technical assistance and good faith engagements and requirements on data security. Importantly, HRSA reiterates the requirement that manufacturers may not implement rebate plans without prior approval.

From a reporting perspective, the guidance indicates that any plan submitted limit data submission requirements from covered entities to several readily available fields and allows covered entities to submit and report data for up to 45 calendar days from date of dispense or potentially longer if extenuating circumstances arise. Finally, the guidance requires that manufacturers pay rebates, or alternatively deny them with documentation, within 10 calendar days of data submission.

The MHA remains concerned about the implications of significantly altering the foundation of the 340B program. Given the program’s intent to stretch scarce federal resources for safety net healthcare providers, the proposed pilot does not appear to align with Congressional intent at this time.

The MHA continues to review this guidance and encourages members to submit comments through the Federal eRulemaking Portal.

Also on July 31, President Trump sent letters to drug manufacturers reiterating his expectations that American families and patients see the impact of Most-Favored-Nation prescription drug pricing. In the letter, the President emphasized that within 60 days, manufacturers doing business in the United States should take several actions:

  • Extend Most-Favored-Nation pricing to Medicaid.
  • Guarantee Most-Favored-Nation pricing for newly launched drugs.
  • Return increased revenues abroad to American patients and taxpayers.
  • Provide for direct purchasing at most-favored-nation pricing.

As major purchasers and consumers of prescription drugs, hospitals and patients continue to seek relief from rising costs. The MHA will continue to monitor the president’s prioritization of lowering drug prices and its potential impact on healthcare affordability and access.

Members with additional questions should contact Elizabeth Kutter at the MHA.

MHA CEO Report — Lame Duck is Here

MHA Rounds
MHA Rounds graphic of Brian Peters

“Even though you are on the right track, you will get run over if you just sit there.” – Will Rogers

MHA Rounds graphic of Brian Peters

The balance of power at both the state and federal levels will change in 2025. Yet lawmakers still have several weeks remaining, a period we refer to as lame duck where a number of elected officials finish their terms with the opportunity to pass bills and create policy prior to leaving office at the end of the year.

Republicans regained majority in the Michigan House of Representatives, changing the balance of power from Democrats controlling both the House, Senate and executive office. This scenario can create a hectic environment where the party in power attempts to push many bills through before they lose influence next term. In many instances, lawmakers may trade their support for completely unrelated bills to gain the necessary support to pass legislation.

This period keeps associations and lobbyists up late at night – both figuratively and literally, as sessions that run into the wee hours are common. The MHA remains vigilant through those many hours and votes on any issues that impact access to care and hospital’s ability to care for Michiganders. The two most important examples are separate bills that would address government mandated nursing staffing ratios and create protections for the 340B drug pricing program.

The MHA has successfully to this point held off any movement on the government mandated nurse staffing ratio legislation, which was introduced in May 2023 and received a committee hearing in the House in November of last year. These bills would severely hamper a hospital’s ability to provide care, with the potential to lead to the closure of up to 5,100 hospitals beds across the state. The MHA has dedicated significant time and resources in educating lawmakers about the practical impacts of these bills and the lengths to which hospitals are going to address workforce challenges and to support their nurses. Our “Think it Through” messaging, which includes billboards in strategic locations as well as digital advertising, is the latest addition to our multi-faceted advocacy on this critical topic. It is safe to say we are counting down the days remaining in the session while these bills remain a threat.

While our association plays defense on nurse staffing mandates, we are playing offense with respect to 340B. We continue to advocate for the passage of House Bill 5350, which would prohibit manufacturers from discriminating against program participants based on their contract pharmacy relationships. A significant number of Michigan hospitals use 340B savings as a force multiplier, allowing these hospitals to stretch incredibly scarce resources to provide care for more patients in their communities, increasing access to care and the quality of care for Michigan’s most vulnerable residents. We’re encouraged that we will see this bill move through both chambers during lame duck and hope you will lend your support to the issue by contacting your state lawmakers through our MHA action alert.

Congress will have their own lame-duck session, which has the potential to impact additional health policy. While it remains to be seen how much activity occurs on Capitol Hill, site-neutral payment policies remain a threat to access to care for patients across Michigan and the country. As with government mandated nurse staffing ratios, policies that add cost or reduce reimbursement can lead to reduced hospital beds, service lines or even potentially hospital closures.

We’re in the home stretch of the 2023-24 legislative sessions in both Lansing and Washington DC. Be rest assured that the MHA is taking every opportunity during lame duck to meet with our state and federal lawmakers, and advocate on behalf of advancing the health and wellness of our patients and communities. While 2025 will present its own unique set of challenges and unpredictability, our focus remains on these final days of session until the last gavel signifies adjournment and sine die.

The bottom line: we are on the right track with respect to our advocacy priorities, but we will never be guilty of sitting still. I encourage all of you to join us and continue to “run through the tape” with these critical efforts during our lame-duck session.

As always, I welcome your thoughts.

MHA Board of Trustees Considers Election Impact and Association Priorities

Member News, Top Issues - Healthcare

The MHA Board of Trustees began its Nov. 13 meeting with a review of the results from the federal election and its potential impact on key association priorities, led by Carlos Jackson and Mike Goodman with Washington D.C.-based Cornerstone Government Affairs.

The board also received a state election update and discussed the association’s advocacy strategy during lame duck, which is expected to be active due to the shift in party leadership next year from Democratic to Republican control in the Michigan House of Representatives. Opposition to government-mandated staffing ratios, preservation of Michigan’s medical liability law and protecting the 340B drug pricing program remain strong priorities during the remainder of the current session and for the year ahead.

The board reviewed and discussed the MHA 2024-2025 Strategic Action Plan, which sets the association’s priorities for the year and highlights areas needing long-term focus from the MHA and the hospital community. The plan is organized into five key pillars this year:

  • Workforce support
  • Protecting access
  • Support for mental and behavioral health
  • Creating healthy communities
  • Strengthening cybercrime/cybersecurity policy

Board member David Miller, MD, president, University of Michigan Health, executive vice dean for Clinical Affairs, UM Medical School and professor of Urology, University of Michigan Health, provided a safety story that illustrated the important role leaders play in setting an example and in modeling a culture of safety within an organization.

The board concluded with board task force reports, MHA Keystone Center and MHA Service Corporation reports, regional hospital council reports, an AHA report and an update from MHA CEO Brian Peters.

Members with questions about the actions of the MHA Board of Trustees may contact Amy Barkholz at the MHA.

MHA CEO Report — Protecting Access to Care Through 340B

Issues in Healthcare, Top Issues - Healthcare, MHA Rounds
MHA Rounds image of Brian Peters

“I alone cannot change the world, but I can cast a stone across the water to create many ripples.” — Mother Teresa

MHA Rounds image of Brian PetersProtecting access to high quality, affordable healthcare for all Michiganders is a key tenet of the MHA. Stated simply, the 340B drug pricing program, created by Congress in 1992, is absolutely crucial to our member hospitals’ ability to maintain this access. And remarkably, since its inception to the current day, it has never required any state or federal taxpayer dollars.

One of my favorite elements of my MHA job is the opportunity to travel around the state and visit with the executives, clinicians and other important employees of our Michigan hospitals. I always ask the question: “What are your highest priorities and how can we help?” One of the most consistent answers for years has been: “We need to protect 340B.” Erosion or elimination of the program would quite literally mean the closure of key service lines, or even the hospital itself, in some cases.

At a time when drug prices are the most rapidly growing expense for hospitals, the 340B program has never been more important. It acts as a force multiplier, allowing hospitals to stretch incredibly scarce resources to provide high quality care for more patients in their communities, including our most vulnerable residents. The savings created from the ability to purchase certain prescription drugs at a discount enables hospitals to keep care in the community in various ways. Examples include funding free or heavily discounted prescription drugs for patients, trauma care, care for people with HIV/AIDs, behavioral health services, oncology clinics, nursing homes and treatment for substance use disorder.

It allows qualifying hospitals, particularly rural hospitals and those serving low-income patients, to deliver care and programming based on the needs of their individual communities. Many larger 340B hospitals are academic medical centers that care for the sickest and most complex patients. They establish arrangements with pharmacies outside of their immediate geographic area so patients who travel long distances to the hospital for specialized care can still access needed drugs at pharmacies near the patient’s home.

Unfortunately, prescription drug manufacturers are working to put arbitrary limits on the 340B program at the state and federal level and Michigan hospitals are at risk of losing their ability to provide affordable, accessible care to those in need. This comes at the same time when costs for new drugs launched by pharmaceutical companies rose by 35% from 2022 to 2023 and for the first time in history, the median price of a new drug is $300,000 – more than four times the median annual household income in the U.S. These attacks will make it more difficult to administer the 340B program and unnecessarily cut needed savings that could be invested in the community. These restrictions threaten access to care by risking the closure of birthing units, nursing homes and even critical access hospitals.

The MHA and Michigan hospitals are currently advocating for the passage of House Bill 5350 to counteract these attacks. The proposed legislation would help protect the 340B drug pricing program at the state level and the healthcare cost-savings generated for hospitals and the communities they serve. We highly encourage you to use our action alert to express the importance of the program to your lawmakers as the bill currently awaits passage out of the House Insurance and Financial Services committee.

Other harmful actions by manufacturers include Johnson & Johnson’s recent attempt to institute an unapproved rebate requirement for two drugs. The MHA opposed that proposal and we’re pleased to see that our advocacy with the Health Resources and Services Administration (HRSA) and our Congressional delegation, along with other hospitals and state hospital associations from across the country, influenced Johnson &  Johnson into discontinuing their pursuit of this unauthorized plan, after multiple HRSA notices of opposition.

This specific work is just the latest example of the MHA’s long-time strident advocacy at the state and federal level related to 340B. We have engaged in the state legislature, Congress, the courts and with our MHA Service Corporation Endorsed Business Partners, demonstrating just how impactful we know this program is.

The 340B program has helped to improve the health and wellness of individuals and communities for 30 years. It operates without any taxpayer-funded support and has positively impacted millions of lives. Attempts at eroding the program would not only harm hospitals, but more importantly patients and communities. As I have often said, the healthcare ecosystem is incredibly complex and there is rarely if ever a single silver bullet solution to any aspect of our challenges. But there is no doubt that the 340B program is one of those critically important stones that creates many positive ripples.

As always, I welcome your thoughts.

Help Protect 340B in Michigan: MHA Action Alert Available

Member News

Hospitals throughout Michigan rely on savings from the 340B Prescription Drug Pricing Program every day to spread scarce resources and care for those with limited or no access to healthcare. As manufacturers and other players at the state and federal level work to scale back the program, the MHA team is engaged in efforts to protect 340B and generate public awareness about the benefits it provides to Michigan patients and communities. Those interested in advocating for the 340B program are encouraged to contact House Insurance and Financial Services Committee members in a few quick steps through an MHA Action Alert.Two women hugging in a hospital setting with overlay text that reads, "340B Protects Access to Lifesaving Care" with text below that says learn more at MHA.org

The action alert requests committee members pass House Bill (HB) 5350, introduced by Rep. Alabas Farhat (D-Dearborn), to protect the 340B program and preserve healthcare cost-savings for Michigan hospitals and the communities they serve. The House Insurance and Financial Services Committee convened June 5 to hear testimony on the bill, allowing representatives from Henry Ford Health, Memorial Healthcare, McLaren Healthcare and Trinity Health to speak in support of the legislation.

Additionally, the MHA created a 340B webpage, downloadable infographic, digital ads and informational social media content. Targeted messages have been displayed more than 150,000 times to audiences in the downtown Lansing region.

Elizabeth Kutter, senior director of government and political affairs, MHA, provided first-hand insight on the strong impact of the 340B program in an MHA Rounds article.

“I’ve had countless conversations with our members about the benefits of 340B,” said Kutter. “The sentiment across the board – especially among rural hospitals and urban safety net hospitals – is that the program is essential for meeting patients where they are…every effort spent to manage the new onslaught of administrative burden created by manufacturers, is less savings going directly into communities in need of affordable care.”

The MHA continues to advocate for 340B and uplift the efforts of Michigan hospitals to expand access to quality, community-based care. Members with questions should contact Elizabeth Kutter at the MHA.

340B and Mackinac Policy Conference Media Coverage

Member News, Issues in Healthcare, MHA In The News, Top Issues - Healthcare

The MHA received media coverage the week of June 3 that includes coverage on the 340B drug pricing program and from the Mackinac Policy Conference on the healthcare workforce.

Michigan Advance published an article June 6 recapping the Michigan House Insurance and Financial Services Committee meeting June 5 on House Bill 5350, which would protect access to affordable prescription drugs and healthcare services through the 340B Prescription Drug Pricing Program. The article specifically references an infographic submitted to the committee by the MHA, which describes the value of the 340B program and how it supports vulnerable patients and the providers that care for them.

“[MHA] says the program allows hospitals flexibility to invest savings back into local healthcare needs through programs such as mobile health clinics, financial assistance programs for low-income patients, supporting high-cost lines of service needed within a community, or providing access to low-cost drugs.”

In addition, the article references the additional MHA-members who testified in support of the bill. MIRS and Gongwer also published stories on the testimony.

Ruthanne Sudderth, senior vice president and chief strategy officer, MHA.
Ruthanne Sudderth, senior vice president and chief strategy officer, MHA.

Ruthanne Sudderth, senior vice president and chief strategy officer, MHA, also appeared in two podcast episodes published the week of June 3 that were recorded at the Detroit Regional Chamber’s Mackinac Policy Conference.

Sudderth joined Blue Cross Blue Shield of Michigan’s A Healthier Michigan podcast to speak about the long-standing partnership between BCBSM and the MHA on a variety of issues, including the history of the MHA Keystone Center and addressing healthcare workforce needs.

Sudderth appeared on The Michigan Opportunity as well, a podcast produced by the Michigan Economic Development Corporation, to discuss the healthcare workforce. Also appearing in the episode is Gov. Whitmer.

Members with any questions regarding media requests should contact John Karasinski at the MHA.

House Insurance Committee Hears Testimony on Bill to Protect 340B

Member News
Maureen D’Agostino, vice president of accreditation and regulatory CMS programs and provider and facility enrollment at McLaren Health Care testifying during The House Insurance and Financial Services Committee.

The House Insurance and Financial Services Committee convened June 5 to hear testimony on House Bill (HB) 5350, introduced by Rep. Alabas Farhat (D-Dearborn), which would protect access to affordable prescription drugs and healthcare services through the 340B Prescription Drug Pricing Program.

Testimony began with Marc Corriveau, JD, MHSA, vice president of corporate government affairs at Henry Ford Health, providing an overview of how savings from the 340B program allow vulnerable, uninsured patients to receive medical and behavioral healthcare services at little to no cost.

Sean Gehle, vice president of advocacy at Trinity Health Michigan, followed with additional examples of how the 340B program allows qualified safety net providers to extend scarce federal resources. Specifically, Gehle noted that the health system is able to provide financial assistance for prescription medications to patients in need.

Next, Ben Frederick, associate vice president of advocacy and government relations and Joseph Munroe, director of pharmacy at Memorial Healthcare, shared the impact the 340B Drug Pricing Program has in rural communities. Together, Frederick and Munroe explained how the program makes it possible for patients to receive routine and specialty care close to home including obstetrics, oncology, behavioral health and neurology care services.

Last to provide testimony was Maureen D’Agostino, vice president of accreditation and regulatory CMS programs and provider and facility enrollment at McLaren Health Care. D’Agostino overviewed how savings from the 340B program have helped McLaren offer comprehensive care for substance use disorder, cancer treatments and more. D’Agostino was accompanied by Deidra Wilson, vice president of government affairs at McLaren.

The MHA continues to advocate for the 340B program and uplift efforts by Michigan hospitals to expand access to quality, community-based care. Members with questions should contact Elizabeth Kutter at the MHA.

MHA CEO Report — The State of Healthcare

Issues in Healthcare, Top Issues - Healthcare, MHA Rounds
MHA Rounds image of Brian Peters

“Mankind’s greatest achievements have come about by talking, and its greatest failures by not talking. It doesn’t have to be like this. Our greatest hopes could become reality in the future. With the technology at our disposal, the possibilities are unbounded. All we need to do is make sure we keep talking.”
― Stephen Hawking

The new year always brings two traditional speeches from lawmakers: Gov. Whitmer just recently delivered her annual State of the State address, while President Biden will share the annual State of the Union address on March 7. While the economy, housing, education, border security, climate change and other important issues are featured in these speeches, the reality is that healthcare remains a top concern for millions of Americans, and therefore will continue to be front and center for elected officials and candidates at the state and federal level throughout this election year.

The bottom line is that the fragility of the healthcare continuum was exposed during the pandemic and four years later, the aftershocks can still be felt. Let’s touch on just a few issues that dictate the state of healthcare in 2024:

Healthcare Workforce

Michigan hospitals employ roughly 219,000 people and are desperately trying to hire thousands more in every corner of the state. A survey we conducted last year showed there were over 27,000 job openings in Michigan hospitals. Hospitals are often the largest employer in their respective communities and serve as critical economic engines. It takes longer to deliver care when hospitals don’t have enough staff, impacting the experience of patients and families.

Much like other industries in Michigan, healthcare has a supply and demand issue, but we feel it in a uniquely acute manner: the aging population not only contributes to an exodus of talent from the field, but it increases demand for healthcare services at the same time. And because we are classic “price-takers” when it comes to a huge share of our business (i.e. Medicare and Medicaid tell us what they are going to pay), our ability to pass rising labor (and supply chain) costs along to consumers is extraordinarily limited. The financial performance of hospitals across the state and country has been negatively impacted as a direct result, and it fuels our advocacy efforts related to our ongoing viability.

Healthcare needs to continue to refill the talent pipeline and we’re making progress on these efforts. From the MI Hospital Careers campaign to the individual partnerships created between health system and secondary-education institutions, the effort is being made to increase the supply of future professionals. I’m encouraged to hear Gov. Whitmer’s proposal for tuition-free community college for all Michiganders who graduate from a Michigan high school. We have been active in advocating for such a policy to improve the number of students pursuing these pathways to address the nursing shortage.

Behavioral Health

Behavioral healthcare in Michigan continues to be in crisis. We need to fund, support and reform our systems to better meet the behavioral healthcare needs of our communities.  Responding to MHA advocacy, the Michigan Legislature provided $50 million in grant funding last year to increase access to pediatric inpatient behavioral health services. We are encouraged by what our member hospitals have planned to improve access, but more needs to be done. This will be a focus area for us in Lansing through the rest of the year, specifically looking at solutions that include continuing to expand care locations, clarifying insurance coverage policies and increasing the number of providers.

Prescription Drug Affordability

Increasing prescription drug costs are a key driver of escalating healthcare costs. These increased costs are not just experienced by patients at their local pharmacies, but hospitals are also large purchasers of prescription drugs and are experiencing the same costs, threatening their viability. Data shows drug costs rose by 36.9% from 2019 to 2021 and currently account for the largest portion of healthcare insurance premiums, costing 22.2 cents for every dollar.

With these dramatic cost increases, the 340B drug pricing program has never been more important. This critical program allows safety net hospitals and other community care organizations to access certain outpatient prescription drugs at discounted prices. It does not require any state taxpayer dollars and has contributed to supporting access to care to Michigan’s most vulnerable patients for more than 30 years. We’re hopeful to see legislation passed to protect these hospitals and the benefits they provide, such as supporting OB services, financial assistance programs for low-income patients or lowering the cost of prescription drugs.

Emerging Technology and AI

Technology continues to provide many opportunities and growth for healthcare. It can serve as a “force-multiplier” that allows our staff to work smarter, extending their impact. If used correctly, technology can improve the patient experience, care delivery, worker satisfaction and more. We’re already seeing it with the dramatic growth in the utilization of telehealth and the emergence of artificial intelligence (AI) applications throughout healthcare. Technology can help expand access to care for many of our rural or disadvantaged residents who are confronted with a variety of social barriers.

We’re seeing great innovation when it comes to technology and I expect even more in the years ahead. The “disruptors,” that is to say, the large, global companies known for their technological innovation (and deep financial resources) are increasingly turning their attention toward the $4 trillion American healthcare market. These entities could be viewed as a potential threat to traditional healthcare providers, payors and others in the health ecosystem – but could also be viewed as potential collaborators and strategic partners. Without a doubt, the future delivery and financing model will be shaped in some way by this development.

At the same time, the rise of sophisticated technology and the inter-connectedness between healthcare entities, their patients and the rest of the world gives rise to the specter of cybercrime. This topic is worthy of its own special focus (stay tuned for more on that in the months ahead), but for now, let me just point to the fact that the MHA was proud to be ahead of the game in this regard, helping to launch our own healthcare-focused cybersecurity operations center right here in Michigan with MHA Endorsed Business Partner CyberForceQ.

These are just a few of the countless, complex issues that will impact Michigan healthcare in the year ahead. Plenty to be concerned about, for sure. But I remain fundamentally optimistic and hopeful about the future. Our healthcare workers are committed and resilient. And our policymakers continue to acknowledge the dependent relationship their communities have with healthcare. While I know better than to predict much of anything in an election year, I feel confident in predicting healthcare will continue to help make Michigan a better place, no matter what the political winds bring our way. All we need to do is continue our most human connection – let’s keep talking with each other and craft a positive future together.

As always, I welcome your thoughts.