Sen. Cassidy Shines Spotlight on 340B Program, Furthering Calls for Reform

By: Ranier Simons, ADAP Blog Guest Contributor, and Marcus J. Hopkins, ADAP 340B Consultant

So far in 2025, state legislatures nationwide witnessed a flurry of legislation on the 340B Drug Pricing Program. Just over one hundred 340B-related bills were introduced in this legislative session (Ingmire, 2025). A handful can be characterized as genuine reform efforts. Still, most are “gimmes” to the powerful hospital lobby, designed to expand the program without any guardrails or guarantees that patients will benefit. Billions of dollars and ultimately patients’ welfare are at stake, which is why Senator Bill Cassidy recently released a report on the 340B Program. The report, focused on stronger accountability and transparency, culminates a year-long inquiry by the powerful Senate Health, Education, Labor, and Pensions (HELP) Committee. The report echoes the growing chorus calling for long-overdue reforms.

Sen. Bill Cassidy | Photo Source: End Points News

Aside from special interests representing the reform denialists, reactions to the report’s findings have been cheered and represent momentum toward something finally being done to return the program to its legislative intent. Senator Cassidy states, “This investigation underscores that there are transparency and oversight concerns that prevent 340B discounts from translating to better access or lower costs for patients. Congress needs to act to bring much-needed reform to the 340B Program” (HELP, 2025).

The 30-year-old 340B program has ballooned more than 600% since 2000, with over 60,000 participating covered entities (Olsen, 2025). The program was created to enable providers, known as ‘covered entities’ (CE), serving large populations of low-income individuals to purchase brand-name and generic medications at a considerable discount and use the savings to provide increased care to patients and lower their costs. Presently, the designation of CE encompasses six different categories of hospitals and ten categories of non-hospital entities (340B, n.d.). Drug manufacturers have to offer the drugs at a discount under the 340B program as a condition of participating in the Medicare Drug Rebate Program. 

As a result of the growing number of participants, many stakeholders are alarmed because the program seems not to result in increased care and lowered costs for low-income and uninsured patients as initially intended. Senator Cassidy’s investigation comprised information requests of eight of the most prominent 340B participants from several categories: two hospital-covered entities, two FQHCs, two contract pharmacies, and two drug makers (Muoio, 2025). What follows is an overview analysis of the Cassidy Report.

Photo Source: Senate HELP Committee

The investigation found that:

• Neither Bon Secours Mercy Health (Richmond Community Hospital in Richmond, VA) nor the Cleveland Clinic (Cleveland, OH)—the two hospital systems examined by Senator Cassidy’s office—pass on 340B savings directly to patients. Both hospital systems stated that the 340B legislation does not require them to do so. While both systems have sliding scale payment programs for patients based upon their annual incomes as a percentage of the Federal Poverty Level (FPL) that allow patients to pay smaller percentages of the costs of services, both systems responded that they are not required to pass “dollar-for-dollar” savings on to patients.

• Neither Bon Secours nor the Cleveland Clinic accounts for 340B revenues or savings in their operating budgets. Both reported sentiments that “340B revenues are revenues like any other” and did not feel obligated to allocate or earmark 340B revenues for specific purposes. Instead, both hospitals treat those revenues as part of general funds and that they can be used for any purpose they see fit. This sentiment aligns with sentiments expressed by other hospital systems in previous congressional hearings.

• Of the two Federally Qualified Health Centers (FQHCs) examined by Senator Cassidy’s office, both Sun River Health and Yakima Valley Farm Workers Clinic generated a majority of their 340B revenues from a single class of drugs—HIV/AIDS medications, which accounted for more than 54% of their 340B revenues at Sun Valley, and drugs to treat diabetes, which accounted for nearly 45% of 340B revenues at Yakima.

• Both FQHCs leveraged their 340B revenues to provide significant discounts on medications dispensed to patients whose incomes fell below 200% of the FPL.

• CVS Health and Walgreens, the two contract pharmacies and third-party administrations examined by Senator Cassidy’s office, initially refused to provide the documents requested by the office and only did so after extended negotiations.

• Both companies charge significant and increasing fees related to the provision of pharmacy dispensing and 340B third-party administrator (TPA) services. The covered entities that contract with them indicated that these increasing fees are straining their resources.

• The pharmaceutical companies that provide billions of dollars in discounts to covered entities under the 340B Program have significant concerns about the integrity of the program, with Eli Lilly and Amgen both arguing that the lack of transparency that currently exists with most covered entity types allows for covered entities, contract pharmacies, and third-party administrators to too easily manipulate, misuse, and abuse a program that was designed to increase access to care.

• Both Eli Lilly and Amgen reported significant increases in sales to contract pharmacies, rather than hospitals and grantees.

Photo Source: ADAP Advocacy

The Cassidy Report comes as ADAP Advocacy launched its national advocacy campaign, calling for reforms to the 340B Program. The campaign was kicked off with a new commercial that asks the question, Is the 340B Drug Pricing Program the Next 'Too Big to Fail'? The commercial will air in the greater metropolitan DC market while Congress is in session, and it provides plenty of fodder for lawmakers to appreciate the need to move on the report.

Ultimately, Senator Cassidy’s office recommended five changes to the 340B Program:

• Requiring covered entities to provide detailed annual reporting on how 340B revenue is used to ensure direct savings for patients, providing a more transparent link between program savings and patient benefit;

• Addressing potential logistical challenges caused by increased administrative complexity, leading to burdens that may impede patients from benefiting from the program;

• Investigating the types of financial benefits contract pharmacies and TPAs receive for administering the 340B Program to ensure that increasing fees do not disadvantage covered entities and patients;

• Requiring transparency and data reporting for entities supporting participants in the 340B Program (i.e., contract pharmacies and TPAs); and

• Providing clear guidelines to ensure that the manufacturer discounts actually benefit 340 B-eligible patients, including examining legislative changes to the definition of eligible patients.

Advocacy groups such as ADAP Advocacy, Community Access National Network, and The Alliance to Save America's 340B Program (ASAP 340B) are supportive. Cassidy’s report findings align with the work of ADAP Advocacy’s 340B Patient Advisory Committee over the last two years. In a press release, Brandon M. Macsata, CEO of ADAP Advocacy, summarized: “In 2019, ADAP Advocacy endorsed the Community Access National Network 340B Commission’s final report calling for long-overdue accountability and transparency standards to improve the 340B Program, among them clearly defining who are 340B patients, and how 340B covered entities should utilize their 340B savings to improve patient access to care and services. Senator Cassidy has laid a path to reform this vital program, and ADAP Advocacy looks forward to working with him on this important issue.” 

ASAP 340B issued a statement in support of Senator Cassidy’s work. In the release, Thomas Johnson, Executive Director of ASAP 340B, states, “This report details how large hospital systems, PBMs, and corporate middlemen take advantage of the program – it is clear the time for meaningful reform is now. We strongly urge Congress to enact legislation that realigns the 340B program in the interest of true safety-net providers and the patients and communities they serve.”

Conversely, and not surprisingly, there were some opposing viewpoints from hospital stakeholders. For example, 340B Health, a lobbying group representing over 1500 hospitals and health systems in the 340B program, expressed concern about the report. In a statement, 340B Health stated it had “concerns with several aspects of the report that may not fully reflect the purpose or implementation of 340B” (Muoio, 2025). Maureen Testoni, 340B Health’s president and CEO, also emphasized that the language of the 340B statute names ‘cost of operations’ reductions as one of the program's primary goals. She implied that using 340B savings to fund capital improvements and community benefits was a way to benefit low-income patients (Muoio, 2025). However, that sentiment is one of the concerns heralded by proponents in favor of 340B reform. Passing savings on to patients and improving their care is the impetus behind the 340B program. Capital improvements do not benefit patients directly, especially when improvements involve facilities that do not serve needy communities.

Photo Source: Drug Channels Institute

Leading biopharmaceutical experts, critical of the reform denialists' claims that the program isn't warped, pointed to the Cassidy Report to highlight glaring problems that only seem to be getting worse. For example, Adam J. Fein, Ph.D., with the Drug Channels Institute, published an analysis: "Follow the 340B Dollar: Senator Cassidy Exposes How CVS Health and Walgreens Profit as 340B Contract Pharmacies." Likewise, Matt Toresco pointed to the report, asking: "340B: Safety Net or Profit Engine?"

Although Senator Cassidy’s report involves a small sample of 340B entities, it is still an informed and enlightening cross-section of the 340B landscape and the needs for reform. Urging Congressional 340B reform actions can help bolster state legislative actions addressing the misuse of the program in hopes of refocusing the benefit on patients. Some covered entities effectively pass savings on to patients; however, many do not. Senator Cassidy has a long history of being active in healthcare reform, and this report is a salient foundation for continued efforts.

[1] 340B Health. (n.d.) 340B Drug Pricing Program Overview. Retrieved fromhttps://www.340bhealth.org/members/340b-program/overview/#:~:text=The%20340B%20ceiling%20price%20is,over%2Dthe%2Dcounter%20drugs.

[2] Ingmire, B, (2025, May 1). The Evolving Landscape of 340B Drug Pricing Laws. Retrieved from https://www.multistate.us/insider/2025/5/1/the-evolving-landscape-of-340b-drug-pricing-laws

[3] Muoio, D. (2025, April 24). Cassidy calls for 340B reform, increased oversight of hospitals, contract pharmacies. Retrieved from https://www.fiercehealthcare.com/regulatory/sen-cassidy-releases-340b-report-recommending-greater-transparency-oversight-hospitals    

[4] Olsen, E. (2025, April 28).Top Republican calls for 340B reform in long-awaited investigation. Retrieved from https://www.biopharmadive.com/news/bill-cassidy-help-committee-340B-reform-investigation/746405/

[5] U.S. Senate Committee on Health, Education, Labor and Pensions (HELP). (2025, April 24). Chair Cassidy Releases Report on 340B Reform, Calls for Congressional Action. Retrieved from https://www.help.senate.gov/rep/newsroom/press/chair-cassidy-releases-report-on-340b-reform-calls-for-congressional-action

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.  

Why Is the 340B Drug Pricing Program the Next ‘Too Big to Fail’

Read the full policy paper, “Is the 340B Drug Pricing Program the Next ‘Too Big to Fail’?”

By: Brandon M. Macsata, CEO, ADAP Advocacy

The 340B Drug Pricing Program sounds wonky and complex, and most patients probably hear the program's name and think, “Oh, it doesn’t even apply to me or my care.” It is wonky; after all, it’s named after Section 340B of the Public Health Services Act of 1992. And even the most well-versed policy expert would admit the program is indeed complex. But rather than trying to explain it in words, click here to watch an amazingly straightforward patient education video produced by the Community Access National Network (CANN). The bottom line is this wonky, complex program has EVERYTHING to do with patient care, and it is highly likely it impacts the care of most of the folks who read this blog post. And here’s why the 340B Drug Pricing Program is the next ‘Too Big to Fail.’

Photo Source: ADAP Advocacy

Today, patients living with HIV can successfully access highly effective therapies to manage the disease and achieve undetectable status, thus making a robust 340B Program essential. Unfortunately, that concept has warped into putting providers before patients. Originally designed to help poor patients access affordable healthcare, it has grown into a $66 billion program, largely benefiting healthcare providers. These healthcare providers' CEOs have benefitted abundantly, too, as ADAP Advocacy noted in its 2024 report and its 2025 supplemental report. Ironically, charity care – which is basically “free” healthcare hospitals extend to patients who otherwise cannot afford their care – has declined. So much for helping poor patients, right?

To make matters worse, a few extremely powerful special interest groups and their high-powered inside-the-beltway Washington lobbyists have successfully created a reform denialism narrative. That narrative is a fallacy. The chief antagonist of reforming the program to serve patients better is the American Hospital Association (AHA). Isn’t it ironic that the AHA fights any effort to reform the program that would result in its hospital members having actually pony up charity care for marginalized communities? Sadly, patient advocacy groups see through this smoke and mirrors by the big hospital systems. 

Pharmaceutical manufacturers—who fund the 340B Program via drug rebates—are pushing reforms to NOT “gut” the program but rather ensure their rebates are going to the intended recipients: patients! Industry-backed reforms are all driven by asking for more accountability and transparency on how their rebates are being spent. What could be more “pro-patient” than asking that rebates designed to help patients actually help patients? Novel idea, right?

Photo Source: Live | Viewpoint

The 340B Program’s reform denialists are scared, evidenced by their lobbyists contacting patient advocacy organizations and all but saying they're being duped by industry because they’re not intelligent enough to know what is best for them. Insulting, right?

The reality is that patients, patient advocacy organizations, and industry can and often do share values on public health and the delivery of healthcare services. The 340B Program is one such example. The program keeps exponentially growing, year after year, and yet medical debt is simultaneously exploding. The program is growing but failing to meet the law's legislative intent, which is helping patients. That is why it begs the question: Is the 340B Drug Pricing Program the Next ‘Too Big to Fail’?

Read the full policy paper, “Is the 340B Drug Pricing Program the Next ‘Too Big to Fail’?”

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

Proposed CDC HIV Prevention Funding Cuts Loom Large; Advocates Fear for Treatment Dollars

By: Ranier Simons, ADAP Blog Guest Contributor

The current administration’s interest in a multitude of funding cuts and reorganization of federal programs and entities has been at the forefront of daily news for weeks. Recently, a Wall Street Journal report highlighted information sourced indicating the Trump administration is considering cuts to the CDC’s domestic HIV program (Wyte, Mosbergan, & Rockoff, 2025). Specifically, there are talks of significant cuts in HIV prevention funding, including a reduction of CDC personnel and possible restructuring or elimination of the CDC’s HIV Prevention division. Public health professionals, clinicians, patient groups, and many other stakeholders are alarmed by the detrimental ramifications of the cuts being discussed.

Photo Source: WSJ

There are an estimated 1.2 million people in the U.S. living with HIV, of whom 13% are unaware of their status (Wyte et al., 2025). Those who are unaware they are living with HIV are in dire need of testing to learn of their status and get into treatment. Testing is the cornerstone of HIV prevention. Mitchell Warren, executive director of HIV prevention organization AVAC, when speaking to the Wall Street Journal, stated, “One of the greatest lessons in public health is you can’t end epidemics with treatment alone. Without prevention, we are going to be fighting the virus with one hand behind our back.”

An opposition letter written by Representative Maxine Waters addressed to Robert F Kennedy, Jr., Secretary of the U.S. Health and Human Services delineates a reported elimination of $700 million in CDC HIV prevention funding because of the 2025 Congressional Continuing Resolution (Waters, 2025). HIV prevention funding was only 3% of the federal government’s fiscal expenditure on HIV in FY2022, even though the CDC represents %91% of federal HIV prevention funds. The FY2024 appropriation for HIV prevention at the CDC was approximately $1 billion, and the CDC spent $1.3 billion on HIV, viral hepatitis, STIs, and tuberculosis in FY2023 (Dawson,2025; Wyte et al., 2025). Thus, a $700 million cut is devastating.

The pushback was bipartisan, as evidenced by Representative Mike Lawler's taking to X to express his concern over the reports. "Our country has been at the forefront of the global fight against HIV and AIDS, and now is not the time to cut programming," he tweeted.

Photo Source: X

Additionally, ADAP Advocacy directed a letter to select Members of the North Carolina Congressional Delegation on the same day the Community Access National Network (CANN) appealed to Members of the Louisiana Congressional Delegation. According to the ADAP Advocacy letter, "North Carolina's effort to address HIV is nearly exclusively funded by the federal government. For example, approximately $42.7M was appropriated for the State AIDS Drug Assistance Program (ADAP), as well as prevention programs funded by President Trump's own Ending the HIV Epidemic initiative (EHE, announced in 2019), including a focus on Mecklenburg County." CANN's letter likewise noted the impact on Louisiana, "Louisiana's effort to address HIV is nearly exclusively funded by the federal government. These dollars, as addressed specifically by prevention programs, including President Trump's own Ending the HIV Epidemic initiative (EHE, announced in 2019), include $5.94M for programs, $1.12M for surveillance activities, and an additional $3M associated with EHE activities. In total, this type of "cut" would amount to the state of Louisiana losing more than $10.06M shift in cost to the state for HIV prevention and surveillance activities for the state of Louisiana alone, even as the state faces a fiscal cliff, making it unlikely that state appropriator, despite their best efforts, to be able to fill the gap caused by program elimination."

The majority of CDC HIV prevention funding is not spent on internal administration. The CDC is a primary funding funnel, with funds distributed to state and local health departments, including community health organizations. The Frannie Peabody Center, Maine's largest provider of HIV and AIDS services, has publicly spoken out against the cuts, as there are an estimated 1,800 Maine residents living with HIV. Executive Director Katie Rutherford stated, “Eliminating this division of the CDC would decimate decades of progress that we have made in fighting an end of HIV and AIDS in the U.S.” (WGME, 2025). 

Photo Source: Courage Forward Strategies

HIV disproportionately affects marginalized communities. Thus, cuts in HIV prevention funding would have disproportionately adverse health outcomes for groups such as Black and Latino gay men. In 2022, among the subpopulation of men who have sex with men, 38% of those who were diagnosed with HIV were Black, and 32% were Latino (Reed, 2025). Texas Health Action, a non-profit that operates several branches of culturally affirming Kind Clinic, states, “HIV prevention is a proven, cost-effective public health strategy. Reducing funding doesn’t save money—it leads to more infections and higher long-term healthcare costs. Nearly 5,000 Texans were diagnosed with HIV in 2022 alone. Cutting these essential programs now would be catastrophic for communities that rely on them.” (Texas Health Action, 2025).

Drastic cuts to HIV prevention funding would also harm the youth. In 2022, 1 in 5 new HIV diagnoses were in the 13 to 24-year-old cohort, and 56% of all new cases were among those 34 and younger (Reed, 2025). Raynard Washington, a county health director in Mecklenburg, North Carolina, when speaking to AXIOS news, stated, “There is nothing more heartbreaking than having to tell a 14-year-old that they have an illness that they won't be able to cure, and they'll have to take medication in various forms for the rest of their life” (Reed, 2025). Sexually active 13-24-year-olds have the highest probability of living with undiagnosed HIV and have lower rates of viral suppression (Hsu & Rakhmanina, 2024). It is imperative to strengthen HIV prevention and education efforts for the youth, not defund them.

In addition to the funding cuts, the administration is considering dismantling the CDC HIV Prevention Department and placing HIV prevention funding under HHS, such as with HRSA. This is also faulty reasoning. The CDC and HRSA are functionally separate entities. HRSA is tasked with HIV healthcare service delivery through the Ryan White HIV/AIDS Program. By statute, except for PrEP delivery at community centers, it is prohibited from providing most HIV prevention services for which the CDC is experienced and structured (Dawson, 2025). Moreover, the Substance Abuse and Mental Health Services Administration (SAMHSA) is considering cuts to its HIV programs (Waters, 2025). SAMHSA funding is crucial because it directs intervention to those who benefit from HIV prevention and substance addiction treatment. Reducing CDC HIV prevention funding, in addition to markedly reducing SAMHSA HIV-related funding, further leaves vulnerable populations subject to increases in HIV transmission and poor health outcomes from poor linkages to care.

Photo Source: HIVMA

During President Trump’s 2019 State of the Union address, he announced a heightened focus on eliminating HIV in the U.S. within ten years (Dawson, 2025). The administration’s Ending the HIV Epidemic in the U.S. Initiative (EHE) aimed to reduce new HIV infections by 90% by 2030. The current discussion of massive cuts to CDC HIV prevention funds starkly contrasts the 2019 EHE goals. Slashing HIV prevention funding means the destruction of programs for outreach, HIV surveillance, PrEP access, and seamless linkages to care.

In a joint statement put out by ADAP Advocacy and Community Access National Network (CANN), Jen Laws, CANN President & CEO, gave a fitting summation of the damage cutting HIV prevention programs will cause. He said, “Prevention programs further support treatment programs with testing, screening activities, and linkage to care upon reactive tests. The economic impact of these programs can be measured in more jobs, more clinics, healthier families, and more productive employees. Conversely, cutting these programs and their associated funding will be measured in terms beyond economic loss. It would be measured in the human toll, the harm to our communities, untreated illness, late diagnoses, families torn apart, and lives lost." (Macsata & Laws, 2025).

[1] Dawson, L. (2025, March 19). Cutting HIV Prevention Funding at CDC: What Would it Mean? Retrieved from https://www.kff.org/quick-take/cutting-hiv-prevention-funding-at-cdc-what-would-it-mean/

[2] Hsu, K., Rakhmannina, N. (2024, May 17). HIV in Children and Teens. Retrieved fromhttps://www.healthychildren.org/English/health-issues/conditions/sexually-transmitted/Pages/HIV-Human-Immunodeficiency-Virus.aspx

[3] Macsata, B., Laws, J. (2025, March 19). Joint Statement On Reported HIV Prevention Funding Cuts. Retrieved from  https://www.adapadvocacy.org/pdf-docs/202_ADAP_Press_Proposed_Cuts_HIV_Prevention_03-19-25-CANN-Joint-Statement.pdf

[4] Reed, T. (2025, March 20). Young people could be most at risk with HIV prevention cuts. Retrieved from https://www.axios.com/2025/03/20/cdc-hiv-prevention-cuts-trump-young-people

[5] Texas Health Action. (2025, March 18). Texas Health Action responds to proposed cuts in HIV prevention funding. Retrieved from  https://dallasvoice.com/texas-health-action-responds-to-proposed-cuts-in-hiv-prevention-funding/

[6] Waters, M. (2025, March 18). Letter to Robert F. Kennedy, Jr. regarding CDC HIV Prevention funding cuts. 

[7] WGME. (2025, March 19). Maine provider for HIV, AIDS services criticizes Trump administration cuts. Retrieved from https://www.msn.com/en-us/health/other/maine-provider-for-hiv-aids-services-criticizes-trump-administration-cuts/ar-AA1BgFhD?ocid=socialshare

[8] Wyte, L., Mosbergan, D., Rockoff, J. (2025, March 18). Trump Administration Weighing Major Cuts to Funding for Domestic HIV Prevention. Retrieved from https://www.wsj.com/health/healthcare/trump-administration-weighing-major-cuts-to-funding-for-domestic-hiv-prevention-8dcad39b

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

A Call to Serve: Patient Advocates Must Step-Up During T2

By: Brandon M. Macsata, CEO, ADAP Advocacy

In December 2024, ADAP Advocacy hosted its final Health Fireside Chat of the year as part of a broader Health Policy Retreat held in collaboration with the Community Access National Network. Despite hopes that the country's better angels would be reflected at the ballot box, both organizations had been preparing for what once seemed impossible: Trump Two (T2). POSITIVELY AWARE captured the sentiments shared by members of several national and state-level HIV advocacy and policy organizations from across the country prior to the Election. But now the rubber meets the road...

ADAP Advocacy CEO Brandon M. Macsata on The Morning Meeting, 12/09/24

At the Health Fireside Chat, political commentator Mark Halperin, editor-in-chief of 2WAY Interactive and host of The Morning Meeting podcast, pointedly dished out some straight talk about how patient advocates need to view the election as a call to serve. During the 2024 presidential election, Halperin scooped that President Joe Biden was dropping out of the presidential race days before the news broke, as well as three weeks prior to the election sounding the alarm that the Harris-Walz campaign was in big trouble in the swing states' suburbs. Agreeing to disagree in a few areas, most attendees in the room understood the merits of the advice being given by a political insider.

In fact, Halperin's message echoed the words of the late Bill Arnold (former President & CEO of the Community Access National Network and former founder and board co-chair of the ADAP Advocacy Association): leave your personal politics at the door! Halperin challenged the patient advocates and other stakeholders in the room to fight for a seat at the preverbal table. Ironically, it sounds awfully similar to The Denver Principles and the "Nothing About Us Without Us" principle!

To that end, ADAP Advocacy is returning some of its targeted advocacy efforts back to the very roots of the organization's founding some seventeen years ago...GRASSROOTS, that is. Back in 2010 during the height of the ADAP Crisis that landed over 1,300 people living with HIV/AIDS in thirteen states on waiting lists under the State AIDS Drug Assistance Program (ADAP), including a couple reported deaths, ADAP Advocacy helped to galvanize state grassroots networks to raise awareness and demand action by lawmakers. It is time to re-activate these state grassroots networks to push back against those dark forces seeking to gut the social safety-net, spread misinformation about science and vaccine efficacy, and perpetuate hate and stigma against marginalized communities...many of whom are disproportionately impacted by HIV.

ADAP Advocacy CEO Brandon M. Macsata at Florida town hall in 2010

Patient advocates are encouraged to contact ADAP Advocacy at info@adapadvocacy and indicate which state they're residing in, and how they might help with advocacy efforts. Aside from targeting federal lawmakers with constituent visits to better educate them, there will be plenty of opportunity for patient advocates to influence their state legislatures on many HIV-related issues.

Additionally, ADAP Advocacy leverages patient advocates and other public health stakeholders to serve on numerous patient advisory committees. This is a call to serve!

• ADAP State Drug Formulary Patient Advisory Committee

RE: Drug Formularies

Committee Chair: Rev. Alexander Garbera (Connecticut)

ADAP Advocacy works to improve access to timely, appropriate care and treatment for people living with HIV/AIDS being served by the State AIDS Drug Assistance Programs (ADAPs) under the Ryan White HIV/AIDS Program, including promoting robust drug formularies to best serve the needs of clients. Whenever feasible, ADAP Advocacy strongly supports "open" drug formularies. Approximately 20 seats need to be filled for this committee.

Learn more about the ADAP State Drug Formulary Patient Advisory Committee.

• ADAP Long-Acting Injectables Patient Advisory Committee

RE: Long-Acting Injectables

Committee Chair: Joey Wynn (Florida)

ADAP Advocacy strives to identify best practices on how to improve patient access to long-acting injectable therapies for the treatment of (and prevention of) HIV/AIDS. As general guidelines, they would be designed to help State AIDS Drug Assistance Programs (ADAPs), and other relevant payers, remove the barriers to accessing injectable HIV-related therapies, as well as other non-ARV, health-related injectable therapies. Three seats need to be filled for this committee.

Learn more about the ADAP Long-Acting Injectables Patient Advisory Committee.

• Ryan White Grantee 340B Patient Advisory Committee

RE: 340B Drug Pricing Program

Committee Chair: Guy Anthony

ADAP Advocacy ensures the voice of people living with HIV/AIDS shall always be at the table and the center of the discussion, including on how supports and services are financed under the Ryan White HIV/AIDS Program. To that end, reforming the 340B Drug Pricing Program is of paramount concern by returning the program to its original legislative intent: putting the patient first. Two seats need to be filled for this committee.

Learn more about the Ryan White Grantee 340B Patient Advisory Committee.

ADAP Advocacy has long prided itself on using its Values Statements to define its advocacy work. Among these values, that the voice of persons living with HIV/AIDS shall always be at the table and the center of the discussion. Patient advocates must step-up during T2, so join the fight!

Photo Source: shutterstock.com

Fireside Chat Retreat in Washington, DC Tackles Pressing Public Health Issues

By: Brandon M. Macsata, CEO, ADAP Advocacy, and Ranier Simons, ADAP Blog Guest Contributor

ADAP Advocacy hosted its Health Fireside Chat retreat in Washington, DC, as part of a broader health policy retreat convened collaboratively with the Community Access National Network (CANN) and its Industry Advisory Group. Board members from both organizations, as well as respective consultants and funders, assembled to discuss pertinent public health issues facing patients in the United States. The Health Fireside Chat convened on Friday, December 6th. The 27 diverse stakeholders discussed Trump Two, one-party rule returning to the nation’s capital, Inflation Reduction Act, 340B Drug Pricing Program, Prescription Drug Affordability Boards (PDABs), AIDS Drug Assistance Program’s drug formularies, and long-acting injectables. 

Photo Source: Getty Images

The Health Fireside Chat kicked off with a political recap from political commentator Mark Halperin, editor-in-chief - 2WAY Interactive. During the 2024 presidential election, Halperin had scooped that President Joe Biden was dropping out of the presidential race days before the news broke, as well as three weeks prior to the election sounding the alarm that the Harris-Walz campaign was in big trouble in the swing states' suburbs. 

Halperin shared his perspectives on what a second Trump Administration might look like, both from a potentially positive viewpoint, as well as a not-so-positive one. He offered some predictions on the Cabinet nominations, again noting where some could serve as potential change agents to improve public health – but also emphasized the unpredictability behind some of those same nominees if confirmed by the U.S. Senate. Halperin offered strong advice on the need to “get in the room” for the important conversations, which he argued won’t happen by merely attacking the incoming administration. Despite the extremes of both parties gaining more power, he offered examples whereby the “center” still holds a lot of weight over the legislative process to do good. Halperin took questions about what Trump Two and the GOP-led Congress might do for HIV, sharing even more advice on how to navigate those waters.

Mark Halperin discusses political landscape and health policy

The day-long strategy session was designed to capture key observations, suggestions, and thoughts about how best to address the challenges being discussed at the Health Fireside Chat. The following represents the attendees:

• Guy Anthony, President & Founder, Black, Gifted & Whole Foundation
• Donna Christensen, former Member of Congress
• Erin Darling, Associate Vice Pres. & Counsel, Federal Policy, Merck
• Amy Dempster, Director, Issue Advocacy and Alliances, Genentech
• Robert Dorsey, Chief of Staff, DC Department of Small & Local Business Development
• Alexander Garbera, Member, New Haven Mayor’s Task Force on AIDS, City of New Haven, CT
• Dusty Garner, Patient Advocate
• Patrick Ingram, Implementation Project Manager, Midwest AETC
• Ashley John, Director, Issue Advocacy, Novartis
• Lisa Johnson-Lett, Peer Support Specialist, AIDS Alabama
• Amanda Kornegay, President, Kornegay Consulting
• Jen Laws, President & CEO, Community Access National Network
• Darnell Lewis, Patient Advocate
• Brandon M. Macsata, CEO, ADAP Advocacy
• Travis Manint, Policy Consultant, Community Access National Network
• Maria Mejia, Patient Advocate
• Judith Montenegro, Program Director, Latino Commission on AIDS
• Theresa Nowlin, Patient Advocate
• Kassy Perry, President & CEO, Perry Communications Group
• Amanda Pratter, Director, Policy Advocacy, Gilead Sciences
• Kalvin Pugh, Policy Consultant, Community Access National Network
• Josh Roll, Director, Strategic Alliances & Issue Advocacy, Bristol Myers Squibb
• Ranier Simons, Policy Consultant, Community Access National Network
• Cindy Snyder, Retired
• David Spears, Creatives Consultant, ADAP Advocacy
• Jennifer Vaughan, Patient Advocate
• Joey Wynn, Grants & Contract Manager, Holy Cross Hospital

ADAP Advocacy is pleased to share the following brief recap of the Health Fireside Chat.

This particular Fireside chat did not have its standard format of specific formal presentations followed by discussion. It was more free flowing, consisting of an exchange of ideas surrounding many sub-topics and all surrounding public policy strategies. One of the most important threads of discourse was navigating policy and advocacy work in dealing with the incoming Trump Administration. A significant concern is figuring out how to manage hostile spaces in order to effect needed change.

The reality is that Trump is the president-elect. Moreover, albeit narrow, Republicans do have majority control across the board. This potentially makes it harder to achieve policy and advocacy goals because effecting change requires being in the room at the table when things are being done. A prevailing sentiment is that those rooms and tables are not welcome to racially and ethnically diverse, sexually diverse, and vulnerable communities that traditionally are adversely affected by and targeted by right-wing conservative ideology and policies. Yet, on some issues, Republican interests could be better aligned with patient interests on things like access to therapies (i.e., right-to-try), or reforming the abuses by big hospital systems and mega service providers under the 340B Drug Pricing Program.

An important focus of group discourse surrounded staying true to marginalized communities while speaking truth to power. The consensus is “wins” can be scored in unfriendly spaces by focusing on common ground, and in doing so doesn’t negate the deeply rooted concerns in other policy or political areas. As the late Bill Arnold often argued, “In this space, you have to leave your personal politics at the door if you’re going to achieve anything meaningful.” One example that was cited was the success in harm reduction policies by the North Carolina Harm Reduction in the Tarheel State.

Photo Source: JazzHR.com

Similarly, it is essential to not leave certain groups behind when broader community discussions are happening around legislation. It is necessary for advocates to figure out how to strategically call out grievances without compromising opportunities to access the players required to effect change. Sometimes, it is a matter of identifying the appropriate messenger for a specific audience. This does not mean the sociologically identified middle-aged white woman or cis-gendered heterosexual white male must be the vehicle to get a seat at every table. It does mean it’s wise to navigate relationships and understand the parties involved to determine the best messengers for different steps of strategic processes. The group had strong consensus that more women of color need to be invited to these proverbial tables. If for nothing else, t requires trust between the messengers and the communities they represent. The most effective messengers for an issue may not always look like or have the lived experience of some of the people for which they are representing. Thus, trust must be built in that they are effectively representing the needs and interests of affected communities when messengers are operating in hostile spaces. Humanizing issues with policymakers is a way to work through the muck and mire of ideological toxicity.

Another significant portion of this Fireside Chat discourse revolved around federal versus state issues. ADAP Advocacy collaborates with CANN to effect change on state and federal matters, as both have specific inroads of expertise. It is increasingly likely that more issues will be impacted at the state level more so than at the federal level. For example, there is a lot 340B-related activity and PDAB (Prescription Drug Affordability Board) legislation occurring on the state level. On the federal level, PEPFAR, Ending the HIV Epidemic, and the possibility of a Ryan White reauthorization are several issues of concern. There is strong evidence to suggest that the new incoming Republican majority in Congress plans to take a hard look at all the sunset programmatic laws as a way to achieve "savings" in the federal budget.

CANN shared a recently released video on PDABs, and how these boards are embarking on inadvertently creating a service delivery crisis for patients living with HIV. The video can be viewed online, here. Additionally, ADAP Advocacy shared a sneak peek of its new patient-centric advocacy tool highlighting why the 340B Program needs reform. Some discussion centered around California's Proposition 34, and embracing what voters achieved to bring better accountability and transparency to the 340B program. 

Photo Source: CANN

HIV is the tip of the spear that opens the door to conversation that makes room for navigating other community issues. Group discourse emphasized the need to strengthen the “Grassroots-to-Capitol Hill” pipeline of advocacy and influence. It was deemed necessary to enhance communication among major advocacy organizations such that there is a commonality of messaging on major issues when Capitol Hill interests inquire for guidance about community concerns. Additionally, it is necessary to identify members, such as some in the House, who can be ‘allies’ knowingly or unknowingly, to help influence the influencers to target things in a bipartisan manner to move the needle in favor of vulnerable and marginalized communities. Most importantly, it is imperative to open their eyes to how positively affecting change for these communities is beneficial to the general population as well.

ADAP Advocacy’s Health Fireside Chats are deeply rooted in the diverse voices who contribute valuable insight from various spaces of their expertise and lived experiences, all focused on the same issue of effecting positive change. In addition to lively and productive group discussion, individual spontaneous conversations occur between people who would otherwise not be in the same room. Virtual meetings are effective and have their place. However, there are times when the power and value of being physically present is undeniable.

Additional Fireside Chats are planned for 2025.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates. 

340B Program Cash Cow for Covered Entities and Their CEOs, Report Finds

By: Brandon M. Macsata, CEO, ADAP Advocacy; Marcus J. Hopkins, Executive Director, Appalachian Learning Initiative

In 2023, ADAP Advocacy, along with the Appalachian Learning Initiative (APPLI) and the Community Access National Network (CANN), launched a project to examine the potential impacts of the 340B Drug Pricing Program (340B Program) on the annual revenues, chief executive salaries, and charity care expenditures of covered entities. Specifically, we sought to examine whether eligibility for the 340B program was correlated with statistically significant increases in annual revenues and whether executive compensation for company presidents and Chief Executive Officers (CEOs) for all covered entity types and charity care provision for hospital entities saw commensurate increases. The report – “The 340B Drug Pricing Program and its Potential Impacts on Annual Revenues, Executive Compensation, and Charity Care Provision in Eligible Covered Entities” – found that annual revenues increased by an average of 824.32%, and executive compensation increased by an average of 231.51%.

The compensation of healthcare executives has been a topic of growing concern and worker outrage, particularly since the COVID-19 pandemic demonstrated both the irreplaceable value of and the poor compensation of healthcare workers (Saini, Garber, & Brownlee, 2022). Research from the North Carolina State Health Plan for Teachers and State Employees, Rice University’s Baker School for Public Policy, and Johns Hopkins University’s Bloomberg School of Public Health found that CEO pay has climbed significantly in the state of North Carolina while nurse pay has largely stagnated (North Carolina State Health Plan for Teachers and State Employees, 2023). This, their report posits, is because hospital CEO salaries are largely based upon their abilities to increase hospital revenues while simultaneously cutting costs in ways that both threaten patient safety and decrease the affordability of care (Scott, 2023).

In 2021, in the midst of the COVID-19 pandemic, former Democratic Congressman Tim Ryan (Ohio 13), expressed what most American workers and patients struggling to pay their medical bills feel:

“In the late ‘70s, a CEO made 35x the worker; today, it’s 300-400x the worker.”
(Forbes Breaking News, 2021)

Photo Source: Forbes Breaking News

In fewer places is this truer than in the healthcare industry. According to the U.S. Bureau of Labor Statistics, Licensed Practical and Licensed Vocational Nurse salaries average $59,730/year, while Registered Nurses average $86,070/year (U.S. BLS, 2024). Comparatively, the average CEO compensation for the 38 hospitals we examined was $1,141,973.29—180.1% higher than an LPN and 172% higher than an RN.

The explosive growth in the 340B Program has been painstakingly documented over the years by Dr. Adam Fein with Drug Channels. In September 2023, Drug Channels’ headline read, EXCLUSIVE: The 340B Program Reached $54 Billion in 2022—Up 22% vs. 2021. Fein, whose well-known call sign is “I ♥ DATA”, noted the following: “Every 340B covered entity type experienced double-digit growth, despite drug prices that grew more slowly than overall inflation.”

This process involved identifying different covered entities, checking the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs Information System (OPAIS) to determine the dates when each entity became eligible for the 340B program, and then using ProPublica’s Nonprofit Explorer to access publicly available federal 990 filings for each of the covered entities, looking at filings for the year prior to eligibility, the year after eligibility, five years after, ten years after, and the most recent year on record.

It is first important to define what ADAP Advocacy’s findings do and do not suggest:

1. ADAP Advocacy’s findings make no implications of impropriety against any of the entities whose filings were examined. Rather, the research was designed to determine whether or not eligibility for the 340B drug rebate program had any positive or negative impacts, either directly or indirectly, on annual revenues, on executive compensation, and, for hospital entities, whether or not increases or decreases in annual revenues were met with comparable increases or decreases in the percentage of charity care provided to lower-income patients.

2. ADAP Advocacy’s research makes no claims about the use, misuse, or abuse of 340B revenues by any covered entities.

3. ADAP Advocacy’s research does not claim that increases in executive compensation are the result of any impropriety; simply that those increases have occurred.

From these filings, we gathered the following information:

• Total Annual Revenue
• Annual CEO/President Compensation in U.S. Dollars
• CEO Compensation as a Percentage of Annual Revenue (i.e., what percentage of revenues were spent on CEO compensation)
• Annual Charity Care Expenditures in U.S. Dollars (for hospital entities, only)
• Charity Care Expenditures as a Percentage of Annual Revenue (i.e., how much of annual revenues are spent on the provision of charity care)

We then measured the following:

• Percentage Change in Annual Revenues from Pre-340B to Present
• Percentage Change in Annual Executive Compensation from Pre-340B to Present
• Percentage Change in Annual Charity Care as a Percentage of Annual Revenues from Pre-340B to Present
• Average Change in Annual Revenues Across Entity Types (excluding the highest and lowest outliers)
• Average Change in Annual Executive Compensation Across Entity Types (excluding the highest and lowest outliers)
• Average Change in Annual Charity Care as a Percentage of Annual Revenues Across Entity Types (excluding the highest and lowest outliers)

We examine a total of 69 covered entities, including 24 HIV Care Providers, 38 Hospitals, and 7 Other types of entities, including Federally Qualified Health Centers (FQHCs) and Comprehensive Healthcare Centers (CHCs). Our key findings include:

• Annual revenues increased by an average of 824.32% across all entity types:
• HIV Care Entities saw an average increase of 2,094.88%
• Hospitals saw an average increase of 217.09%
• Other Entity Types saw an average increase of 1,312.59%

• Executive compensation increased by an average of 231.51% across all entity types:
• HIV Care Entity executives saw an average increase in annual compensation of 282.57%
• Hospital executives saw an average increase of 206.10%
• Executives at other entities saw an average increase of 187.16%

• Charity Care as a percentage of annual revenues decreased across all hospital entity types by 14.79%

Increases in Annual Revenues

ADAP Advocacy’s findings suggest that the types of entities that the largest increases in revenues after gaining eligibility for the 340B drug rebate program tend to be those providing HIV care. This may be because of the high list prices of HIV medications which, when the rebates are supplied to HIV care providers for the difference between the list prices and the purchase prices, may result in significant revenues (Figure 1). These 340B revenues may account for a percentage of those revenue increases, though other revenue streams and the acquisition of additional locations with pharmacies may account for them, as well. 

Figure 1 - HIV Organizations with the Largest Increases in Annual Revenues After Receiving Eligibility for the 340B Drug Rebate Program 

Photo Source: ADAP Advocacy

While hospital revenues saw comparatively modest increases, this may be because many of those hospitals already had annual revenues in the hundreds-of-millions of dollars, whereas many of the HIV organizations began with revenues in the lower millions (Figure 2). Essentially, while hospitals still see increases in revenues in the multiple millions of dollars, they tend to start with far greater annual revenues than HIV care organizations making the increases in revenue proportionally smaller.

Figure 2 - Hospitals with the Largest Increases in Executive Compensation After Receiving Eligibility for the 340B Drug Rebate Program 

Photo Source: ADAP Advocacy

While increases in 340B revenues—and consequently increases in 340B revenues as a percentage of total revenues—significantly bolster the ability of HIV care providers to provide services to patients, where more clarity is needed across every entity type is in exactly how, where, and on what those 340B dollars are spent.

The 340B regulatory and enforcement landscape is such that, aside from certain types of entities being required to report the amount of 340B revenues in a specific filing period, HRSA has failed to provide specific guidelines concerning allowable expenditures using those dollars or where those dollars are reinvested (Mulligan, 2021). While the legislation itself only requires certain entity types, including HIV care providers, to spend 340B revenues according to the stipulations of their grants, hospitals are not required to utilize those revenues in any specific way or in any specific jurisdiction. This may result in expenditures that, while not technically in violation of the statutory requirements, would be largely perceived as violating the spirit of the statute. An example of this would be for a hospital system to generate 340B revenue at a Disproportionate Share Hospital—one that serves a disproportionately large share of lower-income patients and receives payments from the Centers for Medicaid and Medicare Services (CMS) to cover the cost of providing care to uninsured patients—and then utilizing those revenues by building new facilities, upgrading existing facilities, or expanding services in areas that serve primarily higher-income populations.

Increases in Executive Compensation

When examining the compensation of covered entities’ presidents and CEOs, ADAP Advocacy found that their compensation increased by an average of 231.51% across all entity types, with executives at HIV care organizations seeing the highest increases in compensation, in terms of a percentage of growth, at an average of 282.57%. Two organizations—Equitas Health, Inc. and CAN Community Health—saw CEO compensation increase by 1,380.79% and 1,088.94%, respectively (Figure 3). These increases resulted in both CEOs receiving more than $1 million dollars in compensation, significantly higher than any of the other 22 HIV care organizations we examined.

Figure 3 – HIV Organizations with the Largest Increases in Executive Compensation After Receiving Eligibility for the 340B Drug Rebate Program

Photo Source: ADAP Advocacy

By comparison, executive compensation rose at the hospitals ADAP Advocacy examined by an average of 206.10%, with the highest increases in compensation occurring at Yale New Haven Hospital and Sutter Valley Hospitals, at 1,421.15% and 1,133.42%, respectively (Figure 4). The primary differences in executive compensation levels between HIV care organizations and hospitals is that the starting size of the compensation packages are vastly different. All of the HIV care executives began with salaries below $200,000/year, while only one hospital executive’s salary started below $200,000. In fact, 25 of the 38 hospitals we examined (65.8%) had starting executive salaries above $500,000.

Figure 4 – Hospital Organizations with the Largest Increases in Executive Compensation After Receiving Eligibility for the 340B Drug Rebate Program

Photo Source: ADAP Advocacy

Decreasing Charity Care Provision

Perhaps the most stunning findings to come out of ADAP Advocacy’s research are the significant decreases in the provision of charity care or uncompensated care by hospitals at cost as a percentage of annual revenues. Of the 38 hospitals whose 990s ADAP Advocacy examined, just 9 (23.7%) reported increases in the amount of charity care they provided as a percentage of annual revenues. Of the five hospitals that saw the largest decreases in charity care, three—Cabell-Huntington Hospital, Pleasant Valley Hospitals, and Charleston Area Medical Center—are located in West Virginia, one of the most impoverished states in the nation (Figure 5). This is particularly concerning due to the fact that more than 1 out of every 4 West Virginians (28.1%) earns less than 150% of the Federal Poverty Level (American Community Survey, 2023).

Figure 5 - Decreases in the Provision of Charity Care as a Percentage of Annual Revenue in Hospitals After Receiving Eligibility for the 340B Drug Rebate Program

Photo Source: ADAP Advocacy

This raises a significant concern regarding the utilization of 340B revenues in hospitals: if the purpose of the program is to increase patient access to medications and treatments, shouldn’t the provision of charity care at cost be one of the primary mechanisms for doing so? Unfortunately, because there is no transparency regarding 340B revenues, either in the generation or spending of them, neither HRSA nor patients are able to hold hospitals accountable.

Perhaps the most salient statement about the rules regarding hospitals and 340B is this: 

“The number one rule of 340B is that there are no rules.”

Where other 340B entity types have reporting requirements, hospitals have none; where other entities are required to use funds in compliance with certain restrictions, hospitals have no such restrictions; where other entities actively risk losing their 340B eligibility for failing to comply with HRSA’s 340B requirements, hospitals face no such risk. Moreover, hospitals, their lobbyists, and their executives have openly opposed all efforts to reform the 340B program, including a 2023 bill—H. R. 3290—that proposed relatively modest changes to the program that would require transparency about revenues generated by covered entities (Southwick, 2023).

HIV care providers are equally likely to oppose 340B reform. In a statement released in September 2022, Ryan White Clinics for 340B Access (RWC-340B)—a national 501(c)(4) organization composed of over 60 organizations across 24 states that advocates against 340B reform efforts—argued that opinion pieces and “so-called ‘studies’” criticizing the 340B program in 2022 were authored almost exclusively by persons with “...have financial ties to the pharmaceutical industry, calling into question the objectivity and integrity of their work” (RWC-340B, 2022). The arguments against 340B reform from HIV care organizations tend to be grounded in the idea that any changes to the program are likely to fundamentally destroy their ability to provide services to PLWHA by reducing the size of the program and increasing scrutiny of how those revenues are reinvested to improve patient access to and utilization of care. They additionally contend that efforts to reform the 340B program are funded by pharmaceutical manufacturers that are statutorily required to participate in the program, and that anyone who receives funding from those companies is biased in favor of increasing pharmaceutical company profits.

The arguments against 340B reform pose a set of interesting questions:

• Is there room for targeted 340B reforms that focus on increasing regulations, transparency, and reporting requirements for specific types of covered entities?
• How should potential reforms be structured in order to ensure that patients reliant upon social safety net programs like the Ryan White Part B program and who receive healthcare services at Ryan White clinics are not negatively impacted?
• What are the potential downstream impacts of reforms that would specifically define how 340B revenues may be used, and which entities will be most likely to face negative impacts?
• Aside from regulatory reforms, what changes are required to grant enforcement power and regulatory oversight to HRSA that would allow them to discipline entities that fail to comply with existing 340B regulations and any other requirements that may be enacted through the reform process.

As with most issues related to the healthcare system in the United States, the answers to these questions and issues are rarely simple. Any efforts to reform programs or the healthcare system itself to benefit patients is met with stern opposition from providers who rely on certain revenue streams, payors who rely on cost containment measures to ensure profitability, and manufacturers who depend on complex reimbursement and the for-profit healthcare model to support both profitability and purported innovation. One significant change in the patient’s favor may result in the destabilization or wholesale destruction of one or more pillars of an overly complex, profit-driven model that impacts one-sixth of the American economy.

With those considerations in mind, it is important that any efforts to reform the 340B program look at the totality of impacts across all covered entity types and make reforms that will increase and improve patient access to care and treatment, rein in bad actors who abuse the 340B system, and ensure that good actors are able to access 340B revenues without increase their regulatory and reporting burdens.

This report reminds us why patients keep asking, "340B: What About Me?"

Disclosure: Phase I of this report was funded by general revenues. A complete listing of funders is available online, here. Phase II of this report was funded by revenues from its Ryan White Grantee 340B Project. This 340B Project is funded by the following corporate entities: Bristol-Myers Squibb, Genentech, Gilead Sciences, Johnson & Johnson Health Systems (Janssen Pharmaceuticals), Merck, Novartis, PhRMA, and ViiV Healthcare. The report explicitly states that ADAP Advocacy exercised full control over the implementation strategy, design, and data analysis, independent of funder influence. This independence is crucial for maintaining the objectivity and credibility of the research.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

PDABs: A Threat to Ending the HIV Epidemic?

By: Ranier Simons, ADAP Blog Guest Contributor

****Blog original published on June 18th and reprinted with permission from the Community Access National Network****

The Community Access National Network (CANN) continues to be active in the advocacy and policy space concerning Prescription Drug Advisory Boards (PDABs), also known as Prescription Drug Affordability Boards. PDAB activity is growing and advancing. Not only are more states considering or working through PDAB creation legislation, but a few recent drug-specific advisory board decisions have already been made. 

Photo Source: CANN

[CLICK IMAGE TO ENLARGE]

A previous blog post untangles the warnings and concerns regarding PDABs. On the surface, they are presented as a simple solution to a complex issue. The complex problem is the extremely high healthcare expenditure in the United States. Accessing modern healthcare results in high amounts of spending from costs associated with hospitals and other facilities, medical technology creation and utilization, and even prescription drugs. Although prescription drug expenditures are only a small part of the billions spent annually on healthcare, the price of prescriptions is the low-hanging fruit that PDABs aim to attack. The money patients pay for prescription drugs is assuredly a financial burden for many. However, while PDABs aim to expressly lower the direct cost of prescription drugs for patients, their trajectory does not achieve that goal. Their actions have the potential to cause access issues in addition to potentially increasing out-of-pocket costs to consumers. This is especially true since the primary means PDABs lean toward to lower costs is the upper payment limit. Moreover, while CANN has a focus on PDAB potential outcomes regarding HIV drugs, all drugs are of concern, given that people living with HIV (PLWH) have multiple co-morbidities. Any threat to any drug utilized by vulnerable chronic disease communities is a threat to all.

Currently, CANN is monitoring several states that are looking to activate boards or already have active boards. Those states are Colorado, Maine, Maryland, Minnesota, New Hampshire, New Jersey, Ohio, Oregon, and Washington. Attending virtual PDAB meeting sessions, engaging by contributing both written and verbal commentary/testimony, and communicating with nationwide advocacy partners have revealed trends and developing paradigms that are problematic. Currently, the PDAB that is most far along in processes is Colorado. They have already deemed two medications, Enbrel and Cosentyx, as unaffordable, thus making them eligible for a UPL. Although every state’s PDAB is different operationally, due to the language of the legislation they are created by, states are watching Colorado. They will watch each other and potentially network in the future.

A sweeping, troublesome focus of PDABs is price. The stated intent of PDABs is to reduce the out-of-pocket costs patients pay for prescription drugs. However, the focus of analysis and discussion is how much manufacturers charge for drugs instead of how much patients pay. Focusing on drug prices could potentially lower the costs of drugs for the system, i.e., health plans, sponsors, and payers, but that does not directly help the patient cost burden.

A UPL sets a limit on the reimbursement rates of entities such as state health plans. It does not directly affect what patients pay out of pocket or change what manufacturers charge for drugs. A recent board discussion revealed the thought process that a UPL would equal more drug pricing transparency, eliminate hidden price variation caused by opaque rebates and discount structures, and increase patient access. Additionally, an assumption with consensus was that a lower price via UPL suggests an insurance company would be less likely to put a drug on a higher tier, less likely to require prior authorizations and be a barrier to pricing issues caused by payer vertical integration. These thought processes are not sound.

Photo Source: CANN

[CLICK IMAGE TO ENLARGE]

A UPL does not automatically lower the price of a drug. It has no bearing on what a manufacturer charges for a medication. A manufacturer would have to voluntarily lower its price to be at or near the UPL. Additionally, if a UPL were set to be lower than the acquisition cost for pharmacies, pharmacies would lose money stocking medications. They cannot operate at a constant loss which lowers patient access since some pharmacies would have to stop carrying certain medications. If a pharmacy can’t fill a prescription, patients are put at risk due to treatment interruptions or even treatment cessation. Deliberations on boards proceed with the assumption that a UPL would not hinder access, with no discussions of contingency plans or safeguards to guard access against unintended consequences. Unfortunately, the prevailing attitude is that loss of access to medications as a result of UPLs is an unwarranted fear. 

UPLs also threaten the 340B Drug Pricing Program. The value of 340B is found in the spread between reimbursement rates and a reduced acquisition cost by way of drug manufacturer 340B rebates. UPLs will significantly reduce reimbursement rates, devaluing the funding realized by 340B rebates. Taking dollars out of the 340B program means that entities benefiting from 340B rebates will lose the ability to provide services to the vulnerable communities they serve. Furthermore, state AIDS Drug Assistance Programs (ADAP) heavily depend on savings and revenues from the 340B program. For states like Michigan, New Jersey, and Oregon, roughly 70 percent of their state ADAP budgets comes from 340B funding, and Oregon doesn’t receive any state contribution. According to NASTAD, a majority of ADAP clients live at or below 300% of the Federal Poverty Level. Thus, even if they qualify for Medicaid, they still need assistance.

Photo Source: CANN

[CLICK IMAGE TO ENLARGE]

In reality, insurance plan benefit design is what directly translates into what patients pay out of pocket. The convoluted utilization of tools such as copays, coinsurance, high cost-sharing tiers, and copay accumulators directly determines direct patient expenditures. Most importantly, a drug’s price doesn’t determine the utilization management techniques an insurance plan uses. Many different factors are at play there, and those factors benefit many parties but not patients.

Drug manufacturers have patient assistance programs (PAP) that actually directly lower consumer out-of-pocket costs. One type of PAP is copay assistance programs that help pay most or all of the copays patients pay for medications due to their insurance plans. Another type of PAP is where a manufacturer will provide medications entirely for free for those who are uninsured, underinsured, those whose insurance does not cover a particular medication, or those who cannot afford their copay or coinsurance while not qualifying for other help. 

Although PAPs directly facilitate low out-of-pocket costs and bolster access, they are deleteriously used to support UPLs in PDAB board deliberations. The circular argument is that the mere existence of PAPs indicates that manufacturer drug pricing is too high. Additionally, discourse hints at the sentiment that PAPs are self-serving to drug manufacturers because it enables them to enjoy considerable tax advantages under the guise of charitable giving. As Jen Laws, CEO of Community Access National Network, points out, drug manufacturers have PAPs because “they are being made to shoulder discriminatory, profit-driven plan designs and supplement the under-reimbursement issue, all while patients are subject to predatory practices by payors.” 

PDABs, those currently active and those that are upcoming, are well-intentioned in wanting to lower drug pricing for consumers. They state that when identifying drugs they deem are unaffordable for consumers, they will consider other ways to reduce costs besides just the UPL. However, although things such as PBM reform and effecting policy change regulating insurance plans are superior options, the UPL remains the de facto consideration. It is essential that patients learn about and stay aware of PDAB activity. Above all, it is imperative that patients engage with PDABs because they are not receiving enough feedback from consumers and caregivers. Their deliberations are based on minuscule sample sizes of survey responses and low turn-out, with opportunities for in-person or virtual commentary from the public.

Boards feel as if they are aggressively seeking patient engagement but aren’t receiving it. Regardless of the veracity of PDAB's efforts to obtain robust patient-centered data, it is imperative that patients and caregivers stay informed and intentionally make their voices heard. Being vocal and active does make positive change happen. As a result of education efforts from patient advocacy groups and FQHCs regarding the damage of UPLs on 340B funding, this week, Oregon’s PDAB decided to revamp its entire affordability review process. CANN is committed to continued education, engagement, and advocacy to empower patients individually and collectively, irrespective of medical condition.

Go to original blog post.

Go to blog post infographic.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.