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Speaker 1 (00:04): Welcome to 340B Insight from 340B Health. David Glendinning (00:13): Hello from Washington, D.C. and welcome back to 340B Insight, the podcast about the 340B Drug Pricing Program. I'm your host, David Glendinning with 340B Health. On today's episode, we have Jesse Breidenbach, vice president of Pharmacy at Sanford Health and a member of the 340B Health Board of Directors. In previous episodes, we have discussed the topic of drug company restrictions on 340B contract pharmacies. Today, we will take a deeper dive into the claims submission conditions that some of those companies have placed on 340B hospitals. We are interested in hearing from Jesse on how Sanford Health, one of our member health systems, has navigated the challenges of drug maker demands for claims data. But first, let's do a quick recap of some of the latest news and updates on 340B. (01:12): The drug company Bayer is the latest to announce that it will be making its 340B pricing policy more restrictive following a federal appeals court ruling earlier this year that was largely in favor of drug makers. When the new Bayer policy takes effect June 1st, a hospital will be limited to a single contract pharmacy location within a 40-mile radius of the hospital parent site. The company is adding one of its hypertension drugs to the restricted list and will allow hospitals to designate an additional contract pharmacy location to dispense that drug via Bayer's limited distribution model. 340B Health members can learn more details by visiting the show notes. (01:53): Representatives of more than 200 of our member hospitals took to Capitol Hill late last month to advocate with lawmakers and their staff on 340B issues. Participants first attended a policy workshop to receive briefings from a congressional staffer and other policy experts on 340B and drug pricing issues. They then met with House and Senate lawmakers from 30 states to discuss the need to protect 340B. This was the first in-person Hill Day that 340B Health has held since Congress lifted its restrictions on visitors to the Capitol Complex. Check out the show notes to learn more about this event. (02:41): And now for our feature interview with Jesse Breidenbach from Sanford Health, some hospitals have decided to submit 340B claims data to drug companies that require that information as a condition of 340B pricing. Sanford is one of the largest nonprofit integrated health systems in the US. We were interested in hearing from Jesse about the system's decision to submit data and how things have been going since it started doing so. Myles Goldman recently sat down with him to learn more. Here's that conversation. Myles Goldman (03:13): Thank you, David. I'm joined by Jesse Breidenbach here at the 340B Coalition Winter Conference in San Diego. Jesse, we're here in the exhibit hall right now. It's breakfast time, so appreciate you getting up early and joining us here. Welcome to 340B Insight. Jesse Breidenbach (03:31): Well, thank you. Very happy to be here. Myles Goldman (03:33): And we have a lot to discuss. I'm glad you're here to talk about what is a really important topic and one that's being, I think, discussed a lot at this conference, which is submitting 340B claims data to drug manufacturers. But before we dive deep into this conversation, what should the 340B community know about your health system, Sanford Health, and the community it serves? Jesse Breidenbach (03:59): So Sanford Health is one of the largest rural health systems in the country. We have over 40 hospitals and we cover 250,000 square miles. We rely heavily on the 340B program to help maintain and expand access across that large rural footprint. We have five disproportionate share of 340B covered entities, 16 critical access hospitals, two hemophilia treatment centers, and three family planning clinics. We have some medical centers in some decent sized communities like Sioux Falls, South Dakota, Fargo, North Dakota, where there are a couple hundred thousand residents in those communities. But a lot of our patients are drawn from the surrounding rural communities where we have numerous critical access hospitals, but they come into those larger facilities for a lot of services. So even though some of our larger hospitals are located in more metro communities, a lot of the patients we serve are still from hundreds of miles away many times in those rural communities surrounding the larger cities. Myles Goldman (05:02): And so I want to segue now into our conversation about 340B claims data submission. We're hearing this come up a lot around the issue of drug companies restricting 340B discounts. So how have drug company restrictions on 340B discounts for drugs dispensed at community and specialty pharmacies affected Sanford and the patients you care for? Jesse Breidenbach (05:26): It's really been a huge financial impact to Sanford Health, and while we've been able to maintain service lines, it's directly cut into any new investments that we put into new service lines or expansion of services or facilities. So it's made it really difficult and challenging to be able to rely on that 340B benefit to expand or grow services or add new technology and new service lines. Myles Goldman (05:54): Many of the drug companies who are restricting the discounts have created policies that say that they'll restore the discounts if covered entities submit patient claims data. And so I wanted to ask you about your process in responding to those who have those policies of submitting patient claims data and who in the health system was part of that decision making process? Jesse Breidenbach (06:25): All of this really started in late 2020, and then it kept snowballing into 2021, and towards the end of 2021, we're finalizing our budget process. After our budget was finalized, we had five manufacturers pull out and some of those manufacturers were not offering the restoration of pricing with claims data sharing, but that was on the table for some other manufacturers. But our budget was already locked in, so this is late '21, our '22 budget is already locked in. And so that really started the conversation late in 2021. We started assessing what is that shortfall going to be in 2022 without those manufacturers and getting any of the 340B benefit back from any of the manufacturers. (07:13): So we did speak with outside counsel, we looked at risk assessments, we discussed with our legal and chief executive officers at Sanford, went all the way to the top of Sanford, and ultimately we've made a decision in mid-February '22 to start sharing that claims data to restore some of that benefit. I think without that option, we would've faced a huge budget shortfall in the year of 2022. We probably would've had to lay off employees and/or consider which service lines we wouldn't be able to maintain. Essentially, we felt that we're forced to share the data and moving to actually sharing the data came down to a trade up between providing the data and potentially laying off staff or cutting services. Myles Goldman (08:01): After you decided to submit the claims data, what were the steps your team took to prepare to submit this data? Jesse Breidenbach (08:11): Again, you really went back to the risk assessment. So we reviewed with our council, outside council leadership, what was the ESP process, what were we going to be submitting? What was the risk of data breach particularly was something that we were really focused on. We discussed it with our contract pharmacies, letting them know that this was our plan. We did not do any pharmaceutical service agreement amendments on any of these with our pharmacies, but we did discuss it with them. Many of them were already asking us, "Are we going to be able to get any of this pricing restored?" We have a lot of independent contract pharmacies as well, and they were noticing that fewer claims were qualifying for them, which was impacting them to some extent too. (08:57): We also discussed it with our third-party administrators, our 340B software vendors. If we're sharing claims data, what is the process once we have that pricing restored? Because many of these manufacturers, NDCs have been blocked from qualifying by our software vendors. So we had to know once pricing was restored, what's the process going to be to turn that back on? We made a lot of requests to our software vendors as well about reports that we needed actually enhance functionality to help us manage those NDCs to qualify and replenish. And that's what's been one of the most challenging things as manufacturers change their policies, kind of you're swinging back and forth. You need to be able to turn on and off qualifications as they change their policies potentially in a pharmacy and also turn on and off the replenishment of those qualifications from the wholesalers. Myles Goldman (09:55): Well, thank you for walking us through some of the intricacies you have to think about as you're going through the steps to prepare to submit the data. Once you submitted the claims data, what were the next steps? And tell us more about your experience with the restoration of 340B discounts. Jesse Breidenbach (10:14): Yes. I think to say it was a cumbersome process would be oversimplified, but depending on the wholesaler, pricing was generally stored in two to three weeks, but some of the wholesalers that took three to four months. You think of all the parties involved here, we're submitting claims data. ESP has to process that data. Manufacturers have to see that you submitted claims and then communicate with wholesalers to restore the pricing on your bill to ship to accounts. I think wholesalers are becoming a bit more familiar with the process now and probably have worked out some of the details a little bit more on their internal. (10:52): But from feedback, we heard from some of the wholesalers, this is a process that they generally would go through quarterly with pricing changes, but this put a lot more demand on their contract pricing load teams to be adding PHS contract pricing and removing it from these accounts. So it really was a bottleneck at first, especially with some of the wholesalers because they didn't have huge teams to do this, and now all of a sudden, you have maybe 20 plus manufacturers that are asking for you to change numerous accounts every time they want to restore or remove pricing. We did start tracking a lot of that on our own by NDC by manufacturer. We got some reporting from the wholesalers, which helped us. We also received some additional reporting from our 340B software vendors that helped us with that as well. Myles Goldman (11:41): And I know we've seen cases where a manufacturer will suddenly only give two or three weeks to submit that data before their policy goes into effect. How does that affect what you're doing? Jesse Breidenbach (11:55): That's worked okay for us as long as we've been able to get the claims data because it seems that it's easier for the manufacturers and wholesalers to maintain and leave pricing in place if you submit claims data before their cutoff or their deadline. One of the other challenges was the differences between manufacturers as well. So we had some manufacturers that wanted to see claims data for their NDCs from each one of your contract pharmacies. (12:25): And then we had some other manufacturers that once they saw any claims data for their NDC qualified from your covered entity, they would restore pricing to all of your contract pharmacies. That was much easier to manage. You might have some low volume NDCs in certain pharmacies, and if you didn't have that manufacturer's NDC from a given pharmacy to submit in your claims data, you wouldn't get pricing restored as part of your initial data submission process, and you would have to wait then until that pharmacy actually filled one of those NDCs from a given manufacturer before that data registered in ESP, then the manufacturer would tell the wholesaler to restore pricing for them. So the manufacturers that were restoring it by contract pharmacy created more problems and more maintenance and tracking and slower process to restore pricing in a given pharmacy. Myles Goldman (13:22): Once the 340B discounts were restored, did the drug companies keep the 340B pricing in place or was it turning on and turning off? Jesse Breidenbach (13:36): Yeah, I wouldn't say there was a lot of turning on and turning off, but generally pricing's been left in place, but we do get a lot of noise, and by the noise, I mean, reported discrepancies between qualifications submitted or 340B claims submitted and purchase volumes. And so we've had to several times review the data, maybe resubmit data for a certain time period for a given pharmacy, and a lot of that comes from ESP sending notices to say, "Your ratio is off, your amount of purchases are more than your quantity of 340B claims submitted." So we've often had to work with ESP on that and sometimes manufacturer. But I would say in general, it appears that the manufacturers are mainly monitoring that and sending you warnings or notices, but there are a few that will shut up pricing pretty quickly. If your number of purchases surpasses your number of 340B qualified claims that you've submitted. Myles Goldman (14:34): And when it does take some time to work through the discrepancy, how does that affect the hospital and its patients? Jesse Breidenbach (14:42): I think the biggest challenge with that is just the lack of stability, and that's a problem with all of the actions by the manufacturers at this point. But it becomes hard to rely on the 340B benefit and really make plans for the future when the uncertainty is this high in the program. Myles Goldman (15:00): Do you have best practices for trying to track the drug companies' varying policies on restoring and keeping 340B pricing? Jesse Breidenbach (15:09): We do have extensive tracking of the manufacturers and the pricing restoration by contract pharmacy by NDC, and I think one of the things we found useful is to group the manufacturers by their policy. Are they participating in data sharing with an unlimited number of contract pharmacies or only certain limited number of contract pharmacies? Are they participating in data sharing but it's very restrictive, like the most recent manufacturers? Are they participating but only in designated contract pharmacies if you don't have your own pharmacy? So we just put all of those factors onto a grid, and it helps you organize and sort through them, and especially when you have numerous covered entities in our organization, it helps to do that, I think, by covered entity as well, because a lot of our critical access hospitals of course don't have an entity owned pharmacy, but they rely on selection of one contract pharmacy. (16:10): The 45-day lookback policy generally seems that it's moved to apply to all manufacturers even if they didn't spell it out. So I think that's one of the other key points is knowing how far back to go when you're trying to submit claims data for that initial turning on and restoration of pricing. So even if a manufacturer doesn't have a policy, I would seek to clarify that before, just assuming that that means you can go back a couple months or three months or whatever. And I would also say just to be conservative on back data qualifications, kind of along that line is, you need to submit some initial claims data, but when it comes to actually replenishing that product, make sure that you're only going back 45 days from the date that you start replenishing and, on the claims, depending on the manufacturer's policy. Myles Goldman (17:02): Looking forward, how would your hospital be affected if more companies condition 340B discounts on submission claims data, or if the companies with these submission conditions continue their actions? Jesse Breidenbach (17:15): I think there's a high chance it'll be very impactful to our operations, and we'd really have to consider which service lines we would continue to offer. Many of our service lines do not maintain a positive margin on their own. So the 340B program and dollars we receive from the program really does help maintain a lot of our services across our very rural footprint. Having resources to provide these services a big part of supporting our mission of providing high quality care close to home for our patients in the Upper Midwest. (17:49): 340B makes significant contribution to maintaining these services to our patients. Some of the services we have are level one trauma, where that's a great example for us of very expensive service line, but that's based out of our Fargo, North Dakota location. The closest level one trauma services in the Upper Midwest to that location are Minneapolis-Saint Paul area to the East, Omaha to the South, and Portland, Oregon to the West. So there's a huge chunk of the Upper Midwest that is really underserved in that service line. I think the concern over these manufacturers' actions is the uncertainty it creates in being able to maintain and expand these services for our patients. Myles Goldman (18:34): Jesse, you've provided us a lot of important information as 340B hospitals consider whether to submit these claims data and if they choose to do so, the steps that are involved in the process. So thank you for taking time out of your schedule here at this busy coalition conference to join us. Jesse Breidenbach (18:57): Thank you very much. I'm very happy to be here. David Glendinning (19:01): Our thanks again to Jesse Breidenbach for walking us through how Sanford decided to submit claims data to drug companies and some of the experiences it has had since doing so. Hospitals must make important decisions about how to respond to drug maker conditions on 340B pricing. We appreciate Jesse sharing perspectives that we know will be helpful to other hospitals that are determining their paths forward on this issue. We also thank him for his valued service as a member of the 340B Health Board. (19:32): Drug company restrictions on 340B pricing will be among the important topics for discussion at the upcoming 340B Coalition Summer Conference taking place here in the nation's capital from July 10th to 12th. Early bird registration ends May 19th, so please be sure to register at the discounted rates now if you have not already done so. We will be back in a few weeks with our next episode. In the meantime, as always, thanks for listening and be well. Speaker 1 (20:06): Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on Twitter at 340BHealth and submit a question or idea to the show by emailing us at podcast@340bhealth.org. Speaker 5 (20:37): Voxtopica