Becker's Hospital Review

23 CFO / FINANCE AHA to HHS: Stop drugmakers' 'abusive tactics' over 340B discounts By Maia Anderson T he American Hospital Association sent a second letter to HHS Secretary Alex Azar Sept. 8, urging him to stop what it called drugmakers' "abusive tactics" to limit 340B discounts. e AHA said it was writing on behalf of its nearly 2,000 340B member hospitals to ex- press concern aboutactions taken by several large drugmakers to limit the distribution of certain 340B drugs to hospitals. e association acknowledged that the Health Resources and Services Administra- tion is already investigating the drugmakers' actions, but urged HHS to take "swi and de- cisive action" to halt the drugmakers' "perni- cious tactics" and make sure other drugmak- ers don't follow suit. Since late June, drugmakers have been tell- ing hospitals they won't provide discounts on drugs under the 340B program for vari- ous reasons. e drugmakers argue they are trying to avoid duplicate discounts on drugs between Medicaid and the 340B program. "However, even if these concerns are valid, there is no legitimate basis for these compa- nies to limit the distribution of prescription drugs to 340B hospitals or demand superflu- ous paperwork," the AHA said. e AHA sent letters to five drugmakers Aug. 21 expressing its "profound concern" over their actions to limit 340B discounts. Since it sent that letter, several other drug- makers have adopted similar strategies to interfere with 340B discounts, AHA said in the Sept. 8 letter. e AHA also said contract pharmacies pro- vide access to more affordable healthcare, particularly in rural areas. HRSA also said that expanding the use of contract pharma- cies to improve access to 340B drugs for vul- nerable communities served by the program was critical, particularly in rural America, as nearly half of all eligible 340B hospitals are in rural areas. "e drug companies are attempting to ex- ploit for their financial benefit the current COVID-19 healthcare crisis," the AHA wrote. A group of 1,100 hospitals also sent a letter to Mr. Azar Sept. 10 urging him to take action. "If the administration permits pharmaceu- tical companies to continue these practices, 340B hospitals will face increased difficulties serving high volumes of patients living with low incomes in our rural and urban commu- nities," the letter states. n Health systems opt out of Trump's payroll tax deferral By Ayla Ellison P resident Donald Trump signed an exec- utive measure in August instructing the U.S. Treasury to halt collection of pay- roll taxes from Sept. 1 through Dec. 31. Three health systems told Forbes that they're opting out of the plan. The payroll taxes, which help fund Medicare and Social Security, will be due between January and April 2021. Many organizations chose not to defer the taxes because of im- plementation challenges and because the plan required them to pay back taxes, even if they weren't able to collect them from em- ployees, according to Forbes. Seventy employers confirmed to Forbes that they're skipping the payroll tax defer- ral option. Portland-based Oregon Health & Science University, Durham, N.C.-based Duke Health and Chattanooga, Tenn.-based Erlanger Medical Center opted out. n 'Product hopping' costs US healthcare system $4.7B annually, study says By Maia Anderson A n anti-competitive tactic used by brand-name drugmakers called "product hopping" costs the U.S. healthcare system at least $4.7 billion annually, according to a study from Matrix Global Advisors. The study, released Sept. 1 from the Washington, D.C.-based econom- ic policy consulting firm and commissioned by the Coalition for Afford- able Prescription Drugs, studied the effects of product hopping on the American healthcare system. Product hopping occurs when a brand-name drugmaker moves pa- tients to a reformulated version of a drug when an existing drug's pat- ent is set to expire. Just five instances of product hopping cost the U.S. healthcare system $4.7 billion annually, the study found. It looked at instances of product hopping for the brand-name drugs Prilosec, TriCor, Suboxone, Doryx and Namenda. Brand-name drugmakers use product hopping to preserve monopo- lies and prevent generic competition, the study said. Generic drug sav- ings can't be realized if patients have been moved to a drug that is pro- tected by patents before generic competitors can enter the market. n

• Cover