The White House Wants to Stick 340B Within CMS. Will Hijinx Ensue?

Programming Note: The plan is for Cost Curve to be off on Monday, in part because it’s Patriots’ Day and in part because, jeez, I think we all need a break. If you’re running Boston, good luck!

And I wanted to thank Mark Hansan and Scott Howell for having me on the Prescription for Better Access podcast, and extra thanks for letting me lean into the idea that communications is as critical in getting good policy as the good policies themselves.

INFLECTION POINT/ 340B to CMS? 

The idea that the 340B program should be run by CMS is not a new one -- Adam Fein was beating the drum on this back in December -- but we’re getting ever closer to that reality. 

The latest step in that direction came via the leaked version of the president’s budget plan for HHS, which -- per Endpoints’ Max Bayer -- calls for the 340B program to be moved to CMS. 340B’s former home, HRSA, would cease to exist. 

This is where I note that the president’s budget request has absolutely zero formal relationship with the actual way in which federal money is allocated. But it’s a strong sign of the administration’s ambitions. And, nowadays, the administration seems to have a lot of power to shape executive branch agencies however they wish. 

The next set of conversations will be around the winners and losers in the move to CMS, and I’ll broadcast thoughts as I see ‘em.

I’m not in deep enough to make super-detailed guesses about what comes next, except to flag one point: Right now, there is a dispute of sorts between CMS’ demands around 340B and HRSA’s regulation of the program. 

CMS, as part of the IRA, wants companies to figure out how to make sure that providers get either the “negotiated” price on IRA drugs or the 340B discount, but not both. So a handful of pharma companies have floated the idea of a rebate model where they can check the claim and reimburse appropriately. HRSA has repeatedly rejected that idea. 

So a move of 340B oversight to CMS probably greases the skids of a resolution there, but how we get from point A to point B remains a little cloudy. 

AROUND THE BEND/ Getting Back to Talking IRA

We really haven’t talked much about the ongoing IRA price control process lately, and I want to get into some of those topics in a bit more detail next week. It’s worth flagging that CMS is beginning to have conversations with patients and advocates about the 15 medicines in the list, and a very small sample of early feedback suggests that this process is going … well (?!). 

If you have some knowledge of how this is working this time around, please drop me a line. 

QUICK TURNS/ Worthwhile Data to Inform Conversations About IRA, 340B, and Psoriasis

• While we’re on 340B, I should note that the Lown Institute’s “Fair Share” report hit this week. The report looks at the gap between nonprofit hospital tax breaks and their charity care spending (the former tends to be a lot bigger than the latter). But the Lown effort is rigorous in the way that it looks at charity care, so the report provides some of the foundational data used to answer 340B questions, too.

• I’m not sure what to do with this collection of datapoints from Vital Transformation on the impact of the IRA, which was just published in the peer-reviewed Therapeutic Innovation & Regulatory Science. They paint a picture of a radically reshaped environment for smaller biotechs (those with a market value of less than $2 billion), where small-molecule investment and development seem to be going off a cliff. The work isn’t necessarily watertight, but if you’re looking for dead canaries in the coalmine, this work has plenty of them. 

• I’ve been hanging onto this study about patient out-of-pocket spending in the era of the Medicare OOP cap for a while, hoping to give it some thoughtful consideration. But this week has been a mess, as you might have noticed, so I’m just dropping it here to get it into the ether.
  
  It makes a point that is probably underappreciated, which is that most analyses of the benefit of the OOP cap don’t consider that a “sizeable minority of such persons had already secured other coverage that would limit or cap their financial liability,” thereby blunting the impact of the cap. 

• We’ve talked a little bit about how few Medicare beneficiaries are using the Medicare Prescription Payment Plan to “smooth” their drug bills over the course of the year, and Milliman has some good data on exactly how small that number is. Milliman pegged it as just shy of 180,000 (out of some 2.4 million people who might benefit).
  
  To me, this is less about the policy failure and more about a communications failure. No one in the system, really, has an incentive to make a big deal about this. As a consequence, no one knows about it.

• Interesting work from the Harvard PORTAL folks, who looked at the rising costs of psoriasis drugs and concluded that there’s a huge opportunity for savings if the lowest-cost med in a class is used instead of the highest-cost med. To be sure: There’s more to life than mechanism of action and price, but looking at price variation can be illuminating. 

Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations. 

To learn more about how Reid Strategic can help you, email Brian Reid at [email protected].