Safety net hospitals report growing financial hit from loss of 340B drug discounts

 

• The number of drug companies restricting discounted pricing for hospitals in the 340B drug discount program has steadily increased despite government warnings that practice violates the law, stressing the finances of safety net hospitals, according to a new report from hospital association 340B Health.
• Large, mostly urban facilities have lost 23% of the savings they used to get from 340B discounts through partnerships with community pharmacies, according to the survey of 510 hospitals. For critical access hospitals (rural hospitals with up to 25 beds that are the only hospitals within 10 miles of another provider), the losses averaged 39%.
• Drugmakers' ability to restrict 340B discounts is currently being litigated in court. But at the time of the survey — November and December 2021 —  only eight of the 12 drug companies that are now limiting 340B pricing had those policies in place, so it likely underestimates hospital losses, the group, which represents some 1,400 U.S. safety net hospitals, said.

The 340B drug discount program enacted almost three decades ago requires drug companies that want to participate in Medicaid and Medicare's drug benefit to agree to charge no more than the statutory ceiling prices for eligible outpatient drugs.

Hospitals and clinics then use the savings from those discounts to care for low-income patients and rural communities, without having to rely on taxpayer dollars. But the program has faced criticism for lax oversight from pharmaceutical manufacturers and lawmakers, given hospitals don't have to account for how they use the savings.

340B providers get discounts for the drugs they dispense to eligible patients, along with those dispensed to their patients by contracted community pharmacies. Discounts on drugs dispensed at community pharmacies make up about a quarter of hospitals' overall 340B savings, and more than half of savings for critical access hospitals.

That makes the loss of discounts from community pharmacies they contract with — the avenue most restricted by drugmakers — particularly acute, 340B Health said.

Large facilities reported a median loss of $1 million from the pared-back savings, while a tenth of the hospitals reported losses of $9 million or more. But the impact is heightened on small, rural providers like critical access hospitals, where the 39% average loss evens out to about $220,000 per CAH. A tenth of those facilities lost $700,000 or more.

Loss of those funds can have a significant impact on safety net hospitals already operating under razor-thin margins. Hospitals might be forced to reduce programs and services or eliminate them altogether, cut jobs for people providing the services and even close doors, the report said.

That's bad for vulnerable populations: According to 340B, hospitals in the program provide 60% of all uncompensated care in the U.S. and 75% of all hospital care to Medicaid patients.

Pharmaceutical manufacturers with existing or planned community pharmacy limits are Eli Lilly, Sanofi, AstraZeneca, Novo Nordisk, Novartis, Amgen, Bristol Myers Squibb, Merck, AbbVie, United Therapeutics, UCB and Boehringer Ingelheim.

"These figures are only the tip of a very dangerous iceberg," 340B CEO Maureen Testoni said in a statement on the report. "These unlawful actions are weakening the health care safety net and pose a threat to patients. They must stop."

Powerful pharmaceutical lobby PhRMA said the report emphasizes the need for greater transparency in 340B, and that hospitals receiving discounts from contract pharmacies was never authorized by Congress and may not result in patients sharing in the savings.

PhRMA also pointed to the report's limitations, noting the 510 hospitals surveyed represent only a small portion of the 2,600 hospitals participating in 340B, and it may not be a representative sample.

"There are no requirements that hospitals report how they use the savings they generate from 340B, which leaves the government, manufacturers and patients left to take 340B hospitals at their word with no proof points. This report appears to be a carefully curated look at a subset of 340B hospitals, not a clear look at how all 340B hospitals use 340B," a spokesperson told Healthcare Dive.

Eli Lilly was the first drug company to impose restrictions in July 2020, kicking off a domino effect among its peers. Some stopped giving the 340B ceiling price on their drugs sold to the providers and dispensed through contract pharmacies, while others limited sales by selling products only after a covered entity demonstrated 340B compliance or released specific data.

Pharmaceutical companies defend the restrictions by arguing the 340B program drives patient costs higher in the long run and that there's no guarantee hospital savings are being invested in patient care. Lobbying group PhRMA has pushed for more oversight into how the savings are spent, pointing to evidence that (among other things) poor oversight may allow the discounts to be received twice for the same drug.

Claims 340B actually increases spending, however, are mostly unsupported by outside research.

But that hasn't stopped some drugmakers from trying to dodge the discounts, which can range from 25% to 50% of the drugs' cost, cutting into profits.

More than 700 drug companies currently participate in 340B, so the 12 drugmakers currently looking to sidestep the drug discount program are a small minority, though they include some of the biggest pharmaceutical companies operating in the U.S.

The Health Resources and Services Administration, which oversees 340B, has notified some manufacturers that they're acting illegally and ordered them to restore 340B pricing and refund overchanges. HRSA has referred six cases to HHS' Office of the Inspector General to consider imposing fines, which could total more than $5,000 per violation if approved.

However, a number of the drugmakers have gone to court to try to block HHS. To date, two district courts in the states of Indiana and New Jersey have ruled in favor of HRSA, while a third court in Washington, D.C., said HRSA's position that pharmaceutical manufacturers can't limit 340B discounts isn't the only possible reading of the law, deciding in favor of the drug companies.

Those three district court decisions are currently pending appeals, while another in Delaware district court has not yet issued a decision.

Drugmakers, hospitals and the government are also fighting over a rule HHS finalized in December 2020 on how hospitals and drugmakers handle 340B disputes. The rule would create a dispute resolution mechanism for hospitals if they believe they were overcharged for 340B medications by at least $35,000. Drug companies can also appeal if they think a provider received duplicative discounts.

Neither providers nor pharma companies liked the rule, with drugmakers arguing the Biden administration didn't follow rulemaking requirements and promulgated the rule due to political pressure from Congress to lower drug prices. Meanwhile, providers said it was insufficient to address drug companies' attacks on 340B.

Eli Lilly filed a suit seeking to stop the rule, and a federal judge granted its request early 2021.

Another piece of 340B litigation has wound its way up to the Supreme Court over Trump-era cuts to 340B drugs dispensed through off-campus hospital outpatient sites.

The American Hospital Association, the American Association of Medical Colleges, America's Essential Hospitals and three freestanding hospitals sued not long after the rule was implemented. The Supreme Court heard arguments in December, and a decision is expected sometime this summer.

https://www.healthcaredive.com/news/safety-net-hospitals-financial-hit-340b-drug-discount-pharma/617844/

FDA's OTC hearing aid proposal exposes industry, stakeholder rifts

 Feedback about FDA's proposed creation of an over-the-counter hearing aid category has exposed rifts in the audiology sector. Manufacturers, backed by either professional bodies or lawmakers, are lining up on opposite sides of a debate about fundamental aspects of the agency's proposal. 

In 2017, lawmakers directed FDA to create a new category for OTC hearing aids for use by adults with perceived mild-to-moderate hearing loss. FDA followed up in October 2021 with the publication of a proposed rule about the establishment of an OTC hearing aids category. The proposal set the stage for the sale of hearing aids directly to consumers in stores or online without a medical exam or a fitting by an audiologist, while maintaining the prescription-only status of aids for minors and severe hearing loss. 

FDA has received more than 1,000 comments on the proposal, many of them from people who filed near-identical submissions detailing concerns about the proposed maximum decibel (dB) sound pressure level. The proposed amplification limit of 120 dB is above the output limit of 110 dB suggested by some groups.

However, the Academy of Doctors of Audiology in its comments to the agency said the group "supports FDA's proposal to allow an output limit for OTC hearing aids equipped with input controlled compression and user adjustable volume control of 120 dB SPL at any frequency."

FDA justified its proposed 120 dB amplification limit by requiring devices to have input-controlled compression and a user-adjustable volume control. As FDA sees it, the features mean users would have "ample time to take appropriate action to mitigate unacceptably high sound levels," for example by lowering the volume, removing the device or moving to a quieter environment. The American Academy of Audiology found fault with FDA's plan. 

"Copious evidence related to noise induced hearing loss indicates that individuals do not know when sound is potentially harmful and do not take action to reduce their exposure. In addition, the vast majority of individuals with hearing loss who will be the primary consumers of these types of devices are aging adults and may have multiple comorbidities that prevent them from taking the expected mitigating actions to reduce uncomfortable or potentially damaging loud sound levels," the audiologists wrote.

The feedback contrasts with the views put forward by some manufacturers and lawmakers. Audio equipment manufacturer Bose, which triggered the creation of FDA's self-fitting hearing aid category in 2018 with its De Novo request, provided the most detailed rebuttal of the audiologists' case for restricting the output of OTC hearing aids to 110 dB.

According to Bose, "there is no clear scientific consensus on what the maximum output limits of hearing aids should be" and parts of the process ADA, AAA and other hearing care associations used to calculate the 110 dB ceiling is "incorrect and reflects a fundamental misunderstanding."

Sens. Elizabeth Warren, D-Mass., and Chuck Grassley, R-Iowa, in their joint comments submitted to FDA, voiced support for the retention of the higher 120 dB limit.

Bose significantly stepped up its political contributions in the 2020 election cycle, handing out more cash than in the previous 13 election cycles combined. Yet, Bose's political contributions were still dwarfed by those of Starkey Hearing Technologies, an incumbent in the prescription-only hearing aid market. In the 2020 election cycle, Starkey's contributions hit almost $1.7 million, more than 10 times Bose's outlay. Starkey, a big spender in the 2018 cycle, has already contributed $700,000 in the 2022 cycle. 

Starkey used the FDA's comment process to raise concerns with the agency's planned "hybrid oversight model." As the hearing aid manufacturer sees things, the model falls short because it "mixes medical device requirements with controls more appropriate to consumer technology." Starkey added that the proposed "light-handed approach to enforcement would do little to deter noncompliance among manufacturers and sellers, increasing the risk of use of OTC hearing aids by unintended users and compounding the weaknesses of this hybrid model." The manufacturer is also pushing for a 110 dB overall output limit.

Aside from the central disagreements, manufacturers, professional bodies and state attorneys general called for FDA to revise its proposals to avoid several points of potential confusion. Some of the feedback from different organizations is contradictory. 

Bose pushed back against FDA's proposal that the packaging of OTC hearing aids will carry details of the manufacturer's returns policy. The company argued the seller's return policy will apply and, as such, the disclosure of the manufacturer's policy on the outside packaging may be "confusing and even misleading to consumers purchasing the device from third party sellers." 

In contrast, the Federal Trade Commission called the proposal "a low-cost addition" that may "help alleviate confusion regarding return policies." 

Other groups disagreed over the extent to which the federal requirements should displace existing state exemptions. Warren, Grassley and FTC voiced support for the preemption of contrary state laws and regulations, with the latter arguing it means the proposal is likely to foster "pro-competitive benefits." 

However, the National Association of Attorneys General is worried the proposal will repeal virtually all state-requested exemptions, causing "unneeded confusion and the potential for unnecessary litigation."

FDA will now work to finalize the rule. It is unclear how long it will take the agency to adopt its final text. The regulation will take effect 60 days after the publication of the final rule.

https://www.healthcaredive.com/news/fda-otc-hearing-aid-proposal-stakeholder-rifts/618067/

Senators pinpoint MA oversight, cutting drug costs to address looming Medicare insolvency

 With Medicare insolvency expected in just a few years, lawmakers are zeroing in on ways to save the program money, including curbing prescription drug costs and increased oversight of privately run Medicare Advantage plans — though many of these measures face fierce industry opposition or are a nonstarter in Congress.

The trust fund backing Medicare's hospital benefit is forecasted to run dry in 2026 without government intervention. To date, Congress has not allowed the fund to become depleted, though deficit hawks and watchdogs warn the situation is becoming increasingly precarious. Lawmakers often leave action right up until the last minute, threatening financial stability for the vast majority of U.S. providers that accept Medicare.

Under current law, if the trust fund runs out, Medicare payments would be immediately slashed to levels that would be covered by incoming tax and premium revenues. Those lower payments would likely reduce care availability and quality for tens of millions of Americans, experts warn.

"Yes, it's years, but it's not that many years," Sen. Bill Cassidy, R-La., said Wednesday at a Senate finance subcommittee meeting on Medicare. "We should be addressing this in a more serious fashion than we are."

It would take an immediate reduction of $70 billion in Part A spending to put the program's financing on stable footing, testified Michael Chernew, chair of the Medicare Payment Advisory Commission. But the looming Hospital Insurance Trust Fund insolvency is only one part of Medicare's fiscal problem, Chernew said.

Witnesses said the program's flagging finances are just one symptom of overarching headwinds in the sector, including skyrocketing drug prices and rampant fraud and abuse.

For example, the program needs to identify and reduce payments to providers that are historically overpaid in fee-for-service Medicare, while curbing aspects of Medicare Advantage that insurers are taking advantage of to inflate their profits, Chernew said.

Medicare Advantage, Medicare plans administered by private insurance companies that can include extra benefits like dental or hearing, in its current form was created in 2003 with the hope the plans would expand coverage while lowering costs.

Instead, the program has cost Medicare billions of extra dollars, said Sen. Elizabeth Warren, D-Mass. Warren cited insurers "gaming the program's rules," including its risk adjustment process, how benchmarks are calculated and its quality bonus program, to obtain higher payments from the government.

"The Medicare system is hemorrhaging money on scams and frauds. It is critical that we stop the flow," Warren said.

Higher Medicare spending per MA enrollee contributed an estimated $7 billion in additional spending in 2019 alone, according to the Kaiser Family Foundation.

One problem is that the program incentivizes health insurers to code additional diagnoses for their members, categorizing them as sicker, in order to increase reimbursement.

In MA, Medicare pays insurers a fixed monthly amount per enrollee, but that sum is adjusted based on the characteristics of that enrollee, including their health diagnoses — basically, plans are paid more if their members are sicker. That gives payers a strong financial incentive to identify as many diagnoses as possible, Chernew said.

The problem compounds as the program grows, witnesses said. MA has snowballed over the past decade. In 2021, more than 26 million Medicare beneficiaries enrolled in the plans, making up 42% of the total Medicare population — and $343 billion (or 46%) of total Medicare spending.

The federal government has cracked down on such fraud in recent months. Of all fraud and false claims settlements the Department of Justice received in the 2021 fiscal year, about 90% involved healthcare companies.

A "growing number" of those matters involved MA, DOJ said in a Tuesday release. In 2021, for example, California giant Sutter Health paid $90 million to resolve allegations it was upcoding patients, resulting in inflated MA payments — the largest False Claims Act settlement against a health system for alleged MA fraud.

MA also pays more for plans that achieve higher ratings in its quality bonus program, but there's little evidence that results in better outcomes, Chernew testified.

One study published in December found the program led to no observable difference in plan quality, boosting calls from groups such as MedPAC to revise or eliminate it altogether.

"Medicare should pay them in a way that allows it to share in those efficiencies," Chernew said. The MedPAC head suggested lawmakers consider reforms to how regulators calculate benchmarks, adjusting payments to reflect diagnostic coding and restructuring the quality bonus program.

But insurers are unlikely to quietly accept any large-scale MA reforms, as many have been investing heavily in their MA plans in a bid to grow market share in the lucrative program. Humana, Cigna and CVS Health-owned Aetna all entered into new markets for 2022, facing off against program giant UnitedHealthcare along with new upstarts like Clover Health and Oscar Health to capture new members.

https://www.healthcaredive.com/news/senate-congress-medicare-advantage-drug-costs-insolvency/618213/

Japan PM Kishida calls for doubling booster shots to 1 million a day

 Japan's Prime Minister Fumio Kishida said on Monday he wants to speed up the country's COVID-19 booster shot programme to 1 million shots a day by the end of the month, about double the current pace.

Kishida told a televised parliamentary budget committee meeting that he has instructed ministers to work with local governments to speed up inoculations as much as possible.
Nationwide infections surpassed 100,000 on Saturday for the first time. Most regions are now under infection control measures to try to blunt the spread of the Omicron coronavirus variant that has exploded among a population where less than 5% have received vaccine booster shots.
Tokyo and 12 other prefectures are in final discussions to extend the virus curbs for about three weeks, the Asahi newspaper reported on Sunday.

https://timesofindia.indiatimes.com/world/rest-of-world/japan-pm-kishida-calls-for-doubling-booster-shots-to-1-million-a-day/articleshow/89396509.cms

Beijing Olympics organiser says 24 new COVID cases among games-related personnel Feb 6

 The Beijing 2022 Winter Olympics Organising Committee said on Monday that 24 new COVID-19 cases were detected among games-related personnel on Feb. 6.

Eleven of the cases were found among new airport arrivals, according to a notice on the Beijing 2022 official website.

Thirteen others were among those already in the “closed loop” bubble that separates all event personnel from the public, five of whom were classified as either an athlete or team official, the notice said.

https://wtvbam.com/2022/02/06/beijing-olympics-organiser-says-24-new-covid-cases-amongst-games-related-personnel-on-feb-6/

Easing curbs in 'Covid-zero regions' could cause 2 million deaths in a year: China

 Restoring normal population mobility to "Covid-zero regions" like China will cause some two million deaths in a year and the key to controlling the virus is developing vaccines that are better at preventing infection, Chinese researchers said.

China's "zero-Covid" restrictions have come under growing scrutiny in recent weeks as it hosts the Winter Olympics in Beijing while using sweeping restrictions to try to prevent the spread of the more infectious Omicron variant.

Chinese scientists and public health specialists have reiterated the need for maintaining the stringent controls, saying the risks of transmission were too high and that mass infection would put intolerable pressure on the health system

The researchers used studies from Chile and Britain to calculate the "baseline efficacy" of current vaccines - CoronaVac in the case of Chile and the Pfizer and Oxford/AstraZeneca shots in Britain.

They estimated the baseline efficacy against symptomatic disease of the vaccines was 68.3 per cent. They estimated the baseline efficacy of existing vaccines against death was 86 per cent.

The efficacy estimate against infection is based on British data and efficacy against symptomatic disease and deaths was based on data extracted from a study on Sinovac's CoronaVac in Chile.

But even with a global vaccination rate of 95 per cent, if population mobility was restored to 2019 levels, the researchers estimated that all Covid-zero regions would see more than 234 million infections within a year, including 64 million symptomatic cases and two million deaths

"The human race should continue to develop vaccines and explore new ways to improve vaccine protection against infection in order to eliminate Covid-19 at the global level," the team of Chinese scientists said in a paper published on Friday in the weekly bulletin of the China Centre for Disease Control and Prevention (CCDC).

In order to reduce the incidence of Covid-19 to the levels of influenza after restoring normal mobility, the efficacy of vaccines against infection needs to be increased to 40 per cent and the efficacy against symptomatic disease needs to be increased to 90 per cent, they said.

They said it was more important for new vaccines to be effective against infection than against symptomatic disease or death.

"The key to controlling Covid-19 lies in the development and widespread use of vaccines that are more effective at preventing infection," the team said.

China is the only major economy sticking with a zero-Covid policy despite warnings that it could hurt growth.

Others, like Singapore, Australia and New Zealand, have abandoned the strategy in favour of what policymakers call "learning to live with Covid".

https://www.straitstimes.com/asia/east-asia/easing-curbs-in-covid-zero-regions-could-cause-2-million-deaths-in-a-year-china-study

EU Wants To Keep Vaccine Passports In Place For Another Entire Year

 by Steve Watson via Summit News,

The unelected bureaucrat governors of the EU in the European Commission have proposed keeping the bloc’s COVID vaccine passport system in place for another entire year, despite the fact that many member countries are ramping down restrictions.

In a notice on its website, the Commission states “Today the European Commission is proposing to extend the EU Digital COVID Certificate by a year, until 30 June 2023.”

It continues, “The COVID-19 virus continues to be prevalent in Europe and at this stage it is not possible to determine the impact of a possible increase in infections in the second half of 2022 or of the emergence of new variants.”

“Extending the Regulation will ensure that travellers can continue using their EU Digital COVID Certificate when travelling in the EU where Member States maintain certain public health measures,” the statements adds.

It continues, “The Commission is adopting the proposal today to make sure the European Parliament and the Council can conclude the legislative procedure in time before the current Regulation expires.”

The move comes even as several countries, including Denmark, Norway, Italy, Sweden, France, in addition to non-EU countries such as Switzerland and England move to scrap restrictions including the vaccine passes.

The European Commission admits in its statement that it is up to the individual countries whether they carry on using the EU COVID vaccine passport scheme.

“The domestic use of EU Digital COVID Certificates remains a matter for Member States to decide, the statement notes, adding “The EU legislation on the EU Digital COVID Certificate neither prescribes nor prohibits the domestic use of EU Digital COVID Certificate (such as for access to events or restaurants).”

It also notes that “At the same time, where a Member State establishes a system of COVID-19 certificate for domestic purposes, it should continue to ensure that the EU Digital COVID Certificate is also fully accepted for those purposes. Beyond that, the Commission also encourages Member States to align their domestic validity periods with the validity period set at EU level for the purpose of travel.”

As we reported in November, despite vaccine passport schemes and high vaccination rates in many of the countries affected, COVID cases across Europe continued to surge as winter kicked in.

In addition, a recent investigation by experts in Spain concluded that vaccine passports have no significant impact on reducing COVID-19 infection rates.

The findings are similar to evidence found by the UK government that vaccine passports could actually increase Covid rates in the country.

The Spanish study noted that the only positives of such a scheme are that it “warns people that there is still danger from the pandemic and encourages vaccination uptake among the reticent.”

In other words, although vaccine passports have no discernible impact on their stated goal – reducing the spread of COVID-19 – they do succeed in keeping people fearful and compliant.

That conclusion dovetails with a recent admission by French Minister of Health Olivier Véran that the vaccine passports are “a disguised form of vaccination obligation,” but are “more effective.”

https://www.zerohedge.com/covid-19/eu-wants-keep-vaccine-passports-place-another-entire-year