What the Midterm Election Results Mean for 340B

Speaker 1 (00:05): Welcome to 340B Insight from 340B Health. David Glendinning (00:13): Hello from Washington DC and welcome back to 340B Insight, the podcast about the three 340B drug pricing program. I'm David Glendinning with 340B Health. Our guests today are Rodney Whitlock and Debbie Curtis, vice Presidents at McDermott Plus Consulting here in DC. As you all know, our nation recently held the 2022 midterm elections and there will be a brand new Congress convening in January. We wanted to hear from health policy experts about what those election results might mean for the 340B community. But before we go to that discussion, let's take a minute to cover some of the latest news about 340B. (01:00): Three Federal Appeals Courts considering lawsuits over drug company restrictions on 340B pricing have now completed oral arguments in those cases. That paves the way for the courts to issue separate decisions in the coming months from the three judge panels in Washington, D.C., Chicago, and Philadelphia. The judges will weigh the arguments on both sides of the cases from the drug makers that have imposed the restrictions and the government officials who say those policies are illegal. 340B health members can visit the show notes to read our recap of the three hearings and our outlook for what might lie ahead In the litigation process. (01:37): The Health Resources and Services Administration has concluded its 340B audits of drug companies for fiscal year 2022. HRSA audited five drug companies, and this year the agency issued audit findings to four out of those five companies. The findings included 340B overcharges by the companies, failures by the drug makers to submit required 340B pricing data to the government and incorrect records from the companies in HRSA's information system. The four companies were ordered to issue refunds for any overcharges and implement corrective action plans to ensure compliance with 340B requirements going forward. You can read the full audit reports by visiting the link in the show notes. (02:20): And now for our feature interview with Rodney Whitlock and Debbie Curtis. Rodney spent more than 20 years on Capitol Hill, including as health policy director for Senator Chuck Grassley from Iowa. Debbie also served more than two decades on the Hill. Most recently as Chief of Staff to the late congressman Pete Stark from California. Our senior Vice President of government relations, Tom O'Donnell sat down with Rodney and Debbie to talk about the agenda for the new Congress and the lame duck session that started this month. Here's that conversation. Tom O'Donnell (03:01): Thank you, David. I'm Tom O'Donnell with 340B Health. And I'm joined today by two DC healthcare policy experts and political veterans, Rodney Whitlock and Debbie Curtis. Rodney spent many years on Capitol Hill as a legislative staffer on the House and Senate side for Republicans, and Debbie did the same for Democrats. Between the three of us sitting around these microphones, we have decades of DC policy and political experience and hope will allow our listeners to get a better understanding of the implications for 340B as we come to the end of one Congress. And the next session begins. Rodney and Debbie, welcome to 340B Insight. Debbie Curtis (03:35): Glad to be here. Rodney Whitlock (03:37): Thank you for having us. Tom O'Donnell (03:38): Let's start off with the state of play in both the House of Senate for the next Congress. Rodney, could you lead us off, but also address what the runoff US Senate election in Georgia and December 6th means in the big picture? Rodney Whitlock (03:49): Sure, and thanks, Tom. Where we are is in the House of Representatives, it looks like Republicans are going to be in charge. They will have somewhere between 220 and 222 votes in the House of Representatives. We have to wait for election month to come to an end in California, but when it does, that's what we're looking at. In the Senate currently the Democrats have 50 seats, which means they are going to be in the majority. The question is will it be 51 after the Georgia runoff? And so we know we're going to have a divided Congress come January 3rd with Republicans controlling the House by a very narrow margin and Democrats controlling the Senate by again, a narrow margin. In other words, pretty much like we were in terms of margins, but with just different people in control in the house. Tom O'Donnell (04:37): Let's turn to the dozens of US House and Senate races that involve 340B Congressional champions. Debbie, can you tell us more about what happened in those races? Debbie Curtis (04:46): Happy to do so, Tom. I won't go through all of them because we'd be here for a long time, but let's spotlight a few big ones. In the House Congresswoman Abigail Spanberger was a closely watched election on election night. That was really a bellwether seat for Democrats. She's a Democrat from Virginia. She came back and has been a real leader in the House. That's very good news for 340B. Same to be said of Chris Pappas in New Hampshire. And we have one of our champions in the House, Peter Welch, who has now moved over to the Senate. He is now a Senator for Vermont. So we have some people changing chairs, but a lot of our advocates coming back. And what's really important is that there are a lot of new members of Congress. And so now our role is going to be creating new champions. Tom O'Donnell (05:36): Let's turn the election results and what they mean for the leadership of the key healthcare related committees. Rodney, let's start with the Republicans. Rodney Whitlock (05:43): So the Energy and Commerce Committee, which is critically important to us in the House of Representatives, is going to be chaired by Kathy McMorris Rogers. We expect the subcommittee on health to be chaired by Brett Guthrie of Kentucky. And so we'll see how much they want to make 340B and perhaps issues related to 340B part of their agenda, but they won't be doing so with much of a majority. In the Senate we see in particular in the Senate HELP Committee, we're going to have Senator Bill Cassidy of Louisiana is going to be the ranking member of the Senate Health Education, Labor and Pensions, the Senate HELP Committee, which has again, jurisdiction over 340B issues. So these are going to be the folks that we're going to be following on the Republican side and see where they go on issues related to us. It's going to be something we'll have to keep up with over the next year or two in Congress. Tom O'Donnell (06:42): Thank you, Rodney. Debbie, why don't you give us your perspective about leadership changes with the Democrats? Debbie Curtis (06:48): Sure. First to just follow up with Rodney on committees. There's not a lot of change for leadership on committees for Democrats, with the one exception being the HELP committee. So while they are getting a new ranking member, as Rodney has already discussed with Senator Cassidy, they are also going to get a new Democratic chair, and that's going to be Senator Bernie Sanders of Vermont. And that will be a very different committee than has existed under previous leadership with Senators Murray and Burr. So we will watch that anxiously. (07:19): On the leadership front, lots of changes on the Democratic side in the house. Speaker Pelosi has announced that she is no longer going to remain as democratic leader. She is going to remain in her seat, but she is handing over the reigns of leadership to a new generation. Denny Hoyer, who has been the majority leader for the Democrats said the same. And so there are a trio running to replace the leadership when the 118th Congress begins. And that's Hakeem Jeffries of New York who's running to be the new Democratic leader, Katherine Clark from Massachusetts who is running to be the whip. And Pete Aguilar from California who is running to be the Caucus chair. That's a lot of change for Democrats. And to be frank, we're all going to be learning what that means together. Tom O'Donnell (08:10): I know all three of us are watching the end of congressional session this year as Congress goes into the lame duck. Maybe both of you talk about some of the issues that Congress may tackle that are important for 340B hospitals to know about. Debbie Curtis (08:22): Sure. Lame ducks are absolutely hard to predict. And with all this other movement happening, it's even harder. But our expectation is that there will be provisions that matter to hospitals that are addressed. Certainly what the biggest thing that we expect to see done in the lame duck is that Congress will not permit the 4% sequester to go into place for the Medicare program and more broadly across other programs. That's very meaningful. It will have a payment impact for hospitals. And then the question is how much more? Telehealth is very much on the table. It's of interest to a lot of different folks in the healthcare sector, whether they're able to do an extension of continuing telehealth flexibilities that have been available during the pandemic remains to be seen, but is very much on the table. Rodney, you want to name some others? Rodney Whitlock (09:12): I'll follow on where Debbie said in terms of the atmosphere. Right now does not feel like a moment where two years ago we were looking at what ultimately became a 5,600 page bill. Doesn't feel like that's the atmosphere we're in right now. Probably more likely to get something that is more limited in terms of both how far Congress is willing to go right now and how much they're willing to spend setting up for again, much more to be on the table in 2023. Tom O'Donnell (09:42): And thank you, Rodney and that's a great transition into our next question. Really talking about the healthcare agenda for next year and how Congress is going to prioritize these issues, maybe talk about that and how does divided government affect the ability of Congress to pass legislation? Rodney Whitlock (09:57): Absolutely it does without question. It changes the nature of the playing field. Over the last two years, we had easily $1 trillion in potential spending on the table with Democrats in control and looking to do various policies that they considered very important. With Republicans in control of at least one body that changes things drastically. Were not likely to see as expansive an agenda. But what we do look for then is what are the types of policies that could be brought to bear from both sides. Where there's bipartisan agreement where they can agree upon the nature of the problem and then the solution for it, and then whether or not it can spend money, and then how it will be paid for. So along with what we've call the healthcare extenders policies like, very important in our space, disproportionate share hospital dish payments, which have to be reauthorized in 2023, what else can be brought into the conversation? That's where we'll watch for the focus in 2023 in now, divided government Debbie Curtis (11:03): Agree with everything that Rodney just said, and I think I would summarize it by saying small ball, non-controversial, low cost. That's what we're looking at to try to achieve over the next couple of years with two exceptions to that. We also have to look at the administration. The Biden administration is still here, and have already been using their authority aggressively to get work done in the healthcare arena. They're going to continue to do so and probably look even more aggressively in that way. And the other thing to remember is what can members of Congress and one party who might not agree with each other on a lot, agree on when they have a different party that's in control of the administration and that is oversight. We should expect a whole lot of oversight out of the House of Representatives next year. And that's focused on the administration. But don't kid yourself, it'll be focused at the healthcare sector as well. Tom O'Donnell (12:03): And Debbie, you read my mind about the Biden administration's agenda here, but maybe you could talk about what does that mean for 340B? And we'd love to get Rodney thoughts on that as well. Debbie Curtis (12:13): Sure. I'll start out, and Rodney will take it from there, but I think the number one thing you should expect the administration to be focused on is implementing the provisions of the Inflation Reduction Act for Medicare prescription drug price negotiation. That is going to be a huge focus of this administration to get those provisions into place, to get it right and to move those things forward so that seniors can begin saving on prescription drug pricing and potentially look at if it works there, what else can we think about doing? So that will be a very strong focus. Rodney Whitlock (12:49): And to speak a little further, Tom, towards where you were directing the question on 340B, we know the administration is currently engaged on contract pharmacy. We know it's in the courts, we know the administration has taken it on to a degree. We will certainly be watching to see what actions they will take further on that. Want to dig a little deeper into where Debbie went on implementation of the drug pricing provisions of the Inflation Reduction Act. We are going to have to, on a very technical level, watch carefully to make sure that actions taken by the administration and implementation of that law don't affect us in ways that we might consider negative. And so that's something certainly we will have to be ready to advocate on in a moment's notice if we see them going directions that we consider potentially problematic, something we'll certainly have to watch for. Tom O'Donnell (13:35): And Rodney, I tell you that's been a topic of conversation here at 340B Health and we're keeping a close eye in the implementation and looking at additional ways to work the administration to make sure end of the day it does impact 340B pricing. I'd love to get your thoughts about any other external factors that could affect health policy making during the [inaudible 00:13:56] Congress. Debbie, could you lead off please? Debbie Curtis (13:58): Probably the biggest external impact on what may be happening in healthcare legislation and healthcare policy next year is the ending of the public health emergency, the anticipated ending of the public health emergency. The administration is committed to giving 60 days heads up before they announce that they're going to end the public health emergency. We've passed that 60 day window that they would've said something if it was going to end in January. So we all now anticipate that it's going into mid-April, mid-April 2023, but most of us don't believe it's going to go longer than that unless there's some significant health change in the pandemic. So we need to start thinking about what does that mean when the public health emergency ends? There are tremendous number of flexibilities that have been used by hospitals and other providers through this public health emergency. If Congress wants to intervene and have some of those extended like they've already done in Telehealth, but there are other flexibilities, that's a reason for Congress to act. There is also the issue of some 15 million Medicaid beneficiaries who have been continuously enrolled in the program because redeterminations were not allowed during the public health emergency. They are going to be allowed again. That means potentially 15 million people coming off the Medicaid roles. Rodney Whitlock (15:20): One thing I'll be watching for Tom, particularly in 2023 is as it gets towards the middle of the year, I think is when a lot of folks are really going to start paying attention to it, is the impact healthcare inflation has on the sector. Which is everyone knows that the inflationary pressures that we're seeing right now are going to make their way deeper and deeper into healthcare, how it affects the supply chain, how it affects the workforce, and then to the providers who are treated basically on a contractual basis where they're going to be paid what they're going to be paid through the Medicare program, the Medicaid program, and through private insurers on decisions that are made prior to the full effective inflation actually making its way into the sector. And will that be something that ultimately comes to Congress and the Congress has to address? We'll be watching that one considerably. Tom O'Donnell (16:10): Thank you both. I think you gave us a lot of insights on what we're going to have to deal with the next Congress and just so many external factors that we're going to have to look at as we proceed with our advocacy. There will be almost 80 new members of Congress who will be sworn into office on January 3rd. I'd just love to give thoughts on how this might impact these new members health policy in 340B. Debbie Curtis (16:32): Educate, educate, educate. We need to know our local members of Congress. We need to bring them to our hospital. We need to show them the services that are provided, the safety net services that are provided in our community and educate them on the 340B program in that way. It has to be real. It has to be because these are funds that our hospital relies on in order to play the pivotal role it does in our community. And you really have to make this personal and make them understand the value of it. And members of Congress, especially ones that have just been elected, want to be out in the community and can now be out in the community. So those visits are going to be incredibly important. Tom O'Donnell (17:25): The most important thing I think, 340B Health members can do is, if they haven't done it already, create an impact profile. And if you have an impact profile and you haven't updated it, I would update it as soon as possible. Looking at Congress and what moves members to support legislation, it's really what happens back in the community and what an impact pro profile does. It allows a hospital explain the 340B savings they receive, and specifically how they allocate or use those savings to provide a community benefit. So basically it's telling those members very directly, how do those 340B savings benefit their constituency and end of the day increase access to healthcare. So I can't really stress that enough and I would offer to any of our 340B Health members. Please reach back out to the staff here. We're happy to help walk you through how to create an impact profile and also just to help you through advocacy. We're going to really be depending on you in this new Congress, get to know these new members. And the impact profile is a big part of that. Debbie Curtis (18:27): And I just want to highlight just how people come from all different sectors when they come to Congress. We've got two auctioneers who came into Congress. Now I'll guarantee you they did not know what 340B was before they came, but it gives you a real fun opportunity to educate them. Rodney Whitlock (18:44): I got 330, 330B. Can I get 340? Can I get 340? Can I get 340? Can I? No, I don't need a 350. I need 340. Dude. We got 340B right here. Tom O'Donnell (18:52): Let's wrap it up there. It sounds like we're going to have a very busy 2023 ahead of us on Capitol Hill, Rodney and Debbie, we appreciate you sharing your insights with us, and thank you both for joining us. David Glendinning (19:03): Our thanks again to Tom, Rodney, and Debbie for sharing their expertise on the election results. We appreciate their advice on how 340B advocates can best engage in the process of educating and advocating for 340B with new and returning members of Congress, whether they be former auctioneers or not. Tom mentioned 340B impact profiles as one of the key elements of this advocacy. If your hospital or health system has yet to create your impact profile or needs to update your existing profile with newer information, please visit the show notes. There you will find a link to all the details you need to take this important step and information on how 340B Health can help. 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 (19:57): 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 340B podcast.org. You can also follow us on Twitter at 340B Health and submit a question or idea to the show by emailing us at podcast@340Bhealth.org.