EP448 (Part 2): 340B: Why Employers Should Probably Care About What’s Happening Here, With Shawn Gremminger

[00:00:01] Episode 448 Part 2 Today I'm talking 340B with Shawn Gremminger.

[00:00:08] Why employers should probably care about what's happening here?

[00:00:19] American Health Care Entrepreneurs and Executives You Want to Know.

[00:00:23] Talking.

[00:00:26] Relentlessly Seeking Value First of all, we got two really nice reviews

[00:00:31] lately.

[00:00:32] One is from Doug Gainser.

[00:00:33] Hi Doug!

[00:00:34] Doug wrote, Relentless Health Value is a must listen.

[00:00:37] There are just a few podcasts that I listen to religiously and Relentless Health Value

[00:00:41] is one of these.

[00:00:42] He goes on to say, We have a knack for finding the brightest of the bright and asking the

[00:00:46] right questions to unpack the reason health care is where it is and explore the real

[00:00:51] solutions of what we need to do to fix it.

[00:00:54] Second review we got this month is from Mike33754 who kept it short and sweet.

[00:01:01] He said great stuff.

[00:01:01] Thank you for your work.

[00:01:03] Oh, thank you for listening.

[00:01:05] Mike33754.

[00:01:06] As you may have heard already because you are in the know and or you read the email I sent

[00:01:11] because you are him.

[00:01:13] You have chosen to subscribe to our weekly emails.

[00:01:15] That was a subliminal suggestion for those of you who aren't subscribed to our weekly

[00:01:19] emails by the way.

[00:01:20] Or maybe you're in the know because you listened to part one of this conversation

[00:01:24] with Sean Gremminger but no worries because here's the scoop.

[00:01:27] The scoop is after some pondering, I decided to release this 340B extravaganza of a

[00:01:33] conversation with Sean Gremminger in two parts.

[00:01:35] So listen to one, listen to both pick your poison.

[00:01:39] These shows aren't particularly sequential.

[00:01:41] You are currently tuned into part two and you can for sure start here.

[00:01:47] Right now we are going to talk about how 340B impacts employers and

[00:01:51] commercial plans and other plan sponsors.

[00:01:54] So if all you want to hear about is the why as in why do employers care

[00:01:58] about what amounts to a program that is or was supposed to be for low

[00:02:02] income Americans and Medicaid, you are in the right place.

[00:02:06] As just one example of the why should employers care if you are teetering

[00:02:10] on the edge of proceeding.

[00:02:11] Did you know that if an employee or member of a commercial plan gets a drug

[00:02:16] at a contract pharmacy participating in 340B, the employer does not get the rebate.

[00:02:22] The employer is going to pay the list price for that med.

[00:02:25] Wait what?

[00:02:26] Yeah.

[00:02:26] Details follow because Sean Gremminger is going to get into this

[00:02:29] and many other reasons why employers or anyone in the commercial market

[00:02:33] or taxpayers really should care about this, as some may call it Medicaid program.

[00:02:39] The fact is 340B is currently so gargantuan that it creates market

[00:02:44] distortions that bleed into the prices and possibly the quality of health care

[00:02:49] for everybody, all Americans.

[00:02:51] And that could really matter to employer or Taft Hartley plan sponsors.

[00:02:55] If you have really zero idea of what 340B is beyond some program that was

[00:03:00] supposed to be safety net hospitals buying drugs low and selling them high

[00:03:05] and then taking the dollars in the middle and using them to support

[00:03:07] underserved patient populations, that might actually be sufficient.

[00:03:11] You got the gist of it.

[00:03:12] But after you listen to this show, if you want to drill in a little deeper

[00:03:15] on the what the what and the history of 340B, head back and take in part

[00:03:21] one of this episode 448, Sean Gremminger gives the skinny on how the program

[00:03:26] morphed over the years into a fifty three billion dollar juggernaut and is credited

[00:03:31] or blamed for all kinds of health care market consolidation and many other weird

[00:03:35] and unusual consequences that make me admire some of the folks who are truly

[00:03:39] gold medal winners in the sport of financial engineering.

[00:03:43] Before we kick into this fast moving convo, I just want to point out

[00:03:47] a few interesting 340B posts and tweets and articles that I will link to in the show

[00:03:52] note. The first one is from Dr. Anthony DiGiorgio talking about the recent

[00:03:58] announcement by one 340B covered entity hospital to stand up a film studio.

[00:04:04] I guess it could be deemed an educational endeavor that may or may not be considered

[00:04:07] charity, but yeah, I too have questions.

[00:04:10] Then there is a new report out from Neil Masia and Health Capital Group

[00:04:15] that found that state Medicaid spending increases as the number of 340B sites per

[00:04:21] capital rises, adding about 30 billion a year in excess costs when spread across the country.

[00:04:28] Sean and I both mentioned the study in the conversation that follows.

[00:04:32] Additionally, the Avalier slash Community Oncology Alliance study has come out

[00:04:37] and that shows how closely tied PBM affiliated pharmacies are to the 340B program.

[00:04:44] And now I'm going to quote Brian Reed, who wrote in his really great newsletter.

[00:04:48] He wrote, my gut says that wherever you stand on 340B,

[00:04:52] you probably feel uncomfortable with the idea that the program is padding the

[00:04:56] bottom line of PBMs, link in the show notes.

[00:04:59] So look, probably the most damning 340B studies lately have been funded by pharma.

[00:05:04] But again, I like how Brian Reed puts it.

[00:05:07] Talking about 340B research sometimes feels like watching one of those true

[00:05:11] crime shows where the circumstantial evidence is overwhelming.

[00:05:15] And yet there's no definitive answer to the who done it.

[00:05:18] Sure, there's motive and an opportunity and a questionable alibi.

[00:05:22] But with no smoking gun, the case hangs in the balance.

[00:05:25] However, given all the other

[00:05:26] circumstantial evidence in the case, it sure seems like this is a problem

[00:05:29] even without a smoking gun.

[00:05:31] And lastly, the link to some comments by Adam Fine on 340B,

[00:05:35] which Sean mentions in this episode, also a study by Zach Cooper.

[00:05:41] I'd also mention that this episode, both parts one and part two is kind of a

[00:05:45] companion to the recent episode 444 with Ann Kempsky.

[00:05:49] Both could probably have the subheading.

[00:05:52] Welcome to Policy Surprise Valley when things don't turn out as you thought they would.

[00:05:57] Now, this said, policies always require some trial and error.

[00:06:01] We cannot forget that, especially in health care where gamesmanship has

[00:06:05] become a fine art and the spirit of the endeavor is often nowhere to be

[00:06:09] found in how organizations choose to extract financial incentives.

[00:06:13] If you want a summary of the points Sean makes for why employers should care,

[00:06:18] it is your lucky day because here you go.

[00:06:21] Here's the four distortions in the market that Sean talks about which impact

[00:06:25] employers. Number one, 340B contributes

[00:06:28] an incentive for hospitals to consolidate and consolidation is known to drive up

[00:06:32] prices that employers will pay for their health care. Second distortion.

[00:06:36] Turns out 340B covered entities actually mark up drugs more than non 340B entities.

[00:06:41] Weird. So 340B hospitals buy drugs cheaper and they sell them for more.

[00:06:46] Three distortion.

[00:06:47] 340B hospitals have said flat out at summits and elsewhere.

[00:06:51] They will do formulary machinations so as to ensure clinicians prescribe

[00:06:55] the most profitable drugs, i.e. the ones with the best 340B discounts,

[00:06:59] so as to make the most money possible.

[00:07:01] This gets really interesting when you layer in the IRA,

[00:07:04] the inflation reduction act quiet part literally set out loud at a recent

[00:07:09] summit is that some 340B entities are busy cooking up ways to move patients off

[00:07:14] of the IRA drugs, to get them on non IRA drugs so that they can continue to make

[00:07:18] the same money off of 340B.

[00:07:20] Sometimes I just close my eyes and slip slowly off my chair onto the floor.

[00:07:25] Market distortion.

[00:07:26] Number four, when employees get drugs at a 340B contract pharmacy,

[00:07:30] the employer does not get the rebate.

[00:07:32] The hospital does. Oh, wow.

[00:07:34] So kind of taking it from the top here,

[00:07:36] the two really big takeaways for employers in this show.

[00:07:39] Part two here is number one, this is not cost neutral for employers.

[00:07:43] This whole 340B thing.

[00:07:44] And the last takeaway is that 340B is not this little thing that everybody

[00:07:49] pats on the head and chuckles about like it's some kind of reality TV

[00:07:53] where the PBMs and pharma point fingers at each other and it's just dramatic

[00:07:58] and hilarious. 340B is now so huge that it is sitting at the center

[00:08:03] of the drug pricing debate.

[00:08:05] It is not this tangential little side scuffle.

[00:08:08] It has a center of gravity that pulls 340B onto the main stage and anybody

[00:08:12] trying to figure out drug pricing really has to be aware of what's going on here.

[00:08:16] Sean Greminger, my guest today is the relatively newly installed president

[00:08:21] of the National Alliance of Health Care Purchaser Coalitions.

[00:08:24] But rounding out the why as in why did I ask Sean to come on the show

[00:08:28] today and talk about what is or was supposed to be a program for low

[00:08:32] income adults and children?

[00:08:34] Sean started his career doing government relations for the Children's Hospital

[00:08:38] Association. He spent nine years at America's essential hospitals,

[00:08:41] which represents the big kind of urban safety net public hospitals around the

[00:08:46] country. And since then he has been in a number of different roles

[00:08:50] representing consumers and employers.

[00:08:52] So he's seen this 340B journey from many perspectives, I guess, is the main

[00:08:57] point and it's a big point because it was hard with the capital H to find

[00:09:01] a guest so situated.

[00:09:03] My name is Stacy Richter and this podcast is sponsored by Aventria Health Group.

[00:09:08] Sean Greminger, welcome to Relentless Health Value.

[00:09:10] Delighted to be here, Stacy.

[00:09:11] Why do employers care about 340B, which is a Medicaid program?

[00:09:17] So like maybe we can just start there briefly.

[00:09:19] People are asking you all the time,

[00:09:21] why exactly are you guys interested in this issue?

[00:09:23] The question of why we care about 340B really goes back to what our central

[00:09:26] role is at the National Alliance, which is to help employers and

[00:09:29] purchasers on purchasing higher value by which we have a very sort of

[00:09:36] straightforward framework.

[00:09:37] To us, value equals the cost of care divided by quality with a real keen

[00:09:44] interest on making sure that we're promoting health equity, right?

[00:09:47] And any policies or any underlying market dynamics that make it harder for

[00:09:52] employers and purchasers to purchase high quality, low cost health care is

[00:09:58] something that we're going to focus on.

[00:09:59] What we found is that 340B, which theoretically should have absolutely

[00:10:03] nothing to do with us, has grown to the point that it's now highly

[00:10:06] distorted in the commercial market.

[00:10:08] And we have, I think, very strong and clear evidence that this program,

[00:10:13] as well-intentioned as it is, is in fact significantly driving up

[00:10:17] the price of pharmaceuticals that employers and purchasers purchase

[00:10:21] on behalf of their employees and covered lives, but also even on

[00:10:25] the medical care side.

[00:10:26] And there's a lot of reasons for how that has happened through the downstream

[00:10:29] effects.

[00:10:30] And I guess that's excellent foreshadowing for the conversation

[00:10:32] that we're going to have today.

[00:10:35] We had talked earlier and you had come up with what I'm going to call

[00:10:40] three takeaways, just three ways to kind of organize what's going on

[00:10:45] with 340B, which I think is really necessary in a conversation that can

[00:10:49] be such a hairball.

[00:10:50] I mean, this is such a big, many-pronged demon of a topic.

[00:10:55] The first takeaway that you had put forth is the original, or maybe not

[00:11:01] quite original, intent of the program.

[00:11:04] There's some doubt that it's being met.

[00:11:07] I mean, who knows?

[00:11:08] Because there's no systematic way to evaluate whether these 340B dollars

[00:11:11] are in fact being applied to help underserved communities.

[00:11:17] But I just want to tee up takeaway two with a question for you.

[00:11:21] So moving on from question mark with whether this program is actually

[00:11:25] delivering on its original intent, that's number one.

[00:11:28] But number two here is unless I'm

[00:11:31] pharma maybe, a pharma manufacturer who's funding all of this, why do we even care?

[00:11:37] I mean, patients largely are paying the same if they would, if there was no

[00:11:42] 340B discount and the dollars are coming out of Pharma's piggy bank.

[00:11:46] And arguably the hospitals are local businesses.

[00:11:49] Right? So like, do I care if the dollars are being taken out of Pharma's pocketbook

[00:11:53] and put into a business in my local community, i.e. the hospital, which employs

[00:11:57] a lot of people? I mean, like is this third party transaction that has nothing

[00:12:01] to do with anybody else of really any concern?

[00:12:05] I mean, I could consider it a wealth transfer between Titans of the industry

[00:12:09] and my local community.

[00:12:12] It's a great question.

[00:12:14] So I think two perspectives, one, if you're a patient and consumer advocate,

[00:12:20] you should care from the perspective of the fact that this is a, as you said,

[00:12:24] it's a wealth transfer from pharma to hospitals.

[00:12:27] But if low income patients, uninsured patients,

[00:12:30] underserved communities aren't actually benefiting, you should care for that

[00:12:33] reason alone, right? And that's where the focus, I think, is for a lot

[00:12:37] of folks in the kind of patient and consumer community, which is like, wait a

[00:12:40] minute, why are we getting nothing out of this that we can discernably find?

[00:12:44] I think from the employer-persicer perspective, which is where I said at

[00:12:48] the National Alliance, the reason we care is the significantly growing set

[00:12:52] of data and information that shows that we are uniquely paying higher

[00:12:58] prices for drugs and medical services because of 340B.

[00:13:03] If this didn't cost us anything and it was just sort of a misaligned

[00:13:06] program that didn't help patients, but it sort of left us harmless,

[00:13:09] I probably wouldn't be focusing on this.

[00:13:11] But what we're finding is that in fact, there are a couple of downstream

[00:13:14] effects that are significantly impacting us as people purchasing drugs

[00:13:19] and medical services that are caused by the distortions in 340B.

[00:13:24] So the first one is kind of the superchars consolidation, as I put it.

[00:13:29] There already would be a lot of consolidation in the health care system

[00:13:32] for all kinds of reasons, a big one being the lack of site

[00:13:35] neutral payments in Medicare, as we know is a significant driver of consolidation.

[00:13:39] But when you look at these substantial

[00:13:42] benefits that can be accrued to a 340B hospital by buying up physician

[00:13:47] practices and then engaging in price arbitration on their drugs,

[00:13:50] we know that's a substantial driver of consolidation.

[00:13:52] And that consolidation doesn't just increase the prices that we're

[00:13:55] paying for pharmaceuticals in those clinics, increases the prices

[00:13:58] we're paying period because as hospital systems get bigger,

[00:14:02] they have substantially more leverage in their market,

[00:14:03] they're able to demand higher prices.

[00:14:05] And obviously there's literal mountains of data that shows that hospital

[00:14:08] consolidation drives up prices.

[00:14:11] So that's distortion number one.

[00:14:13] And yet there is mountains of data that hospital consolidation drives up

[00:14:17] prices with no appreciable discernible increase in quality.

[00:14:22] And this matters to employers because usually the majority of spend

[00:14:26] on any employer's health plan goes to hospitals.

[00:14:31] It's usually like 55 or 58 percent of total employer health care spend.

[00:14:36] There was also a study that just came out by Zach Cooper.

[00:14:39] We'll link to it in the show notes for every point of increase in hospital prices.

[00:14:44] Non health care employers responded by

[00:14:46] reducing their payroll and cutting jobs of middle class workers.

[00:14:51] OK, so we definitely have a first distortion consequence for employers.

[00:14:56] 340B may trigger more consolidation.

[00:14:59] This could drag up prices for employers.

[00:15:02] What's distortion number two?

[00:15:04] Number two, interestingly, is we're seeing distorted prescribing

[00:15:09] and pricing patterns at 340B hospitals.

[00:15:12] It isn't just that hospitals are able to purchase at a discount

[00:15:15] and then sell at the market rate.

[00:15:17] That's the bar betrothed.

[00:15:19] But that we're finding that actually 340B hospitals tend to mark up their

[00:15:22] prices even more than non 340B hospitals.

[00:15:25] So there's a certain level of kind of greed here, right?

[00:15:29] When you could be marking up to X, but you're actually marking up to X times

[00:15:32] 1.5, even though you're already getting a larger discount than anybody else.

[00:15:37] The other thing we're finding is that 340B clinics are more likely to prescribe

[00:15:42] higher priced drugs than non 340B clinics, which again makes a lot of sense.

[00:15:47] If you kind of look at what the profit motivation is, is if the money

[00:15:51] is made on the spread.

[00:15:53] So if given the option of prescribing a $200 drug or a $500 drug,

[00:15:59] what we're finding is that 340B clinics tend to prescribe the $500 drug

[00:16:03] disproportionately compared to a non 340B clinic, whether that's

[00:16:06] an independent practice that isn't in 340B or is a non 340B hospital clinic.

[00:16:11] We're seeing a different prescribing pattern.

[00:16:14] And then the last one is kind of interestingly and I find myself in

[00:16:18] an interesting place on this because the National Alliance has been one

[00:16:20] of the more vocal critics of the PBM industry.

[00:16:23] When a drug is purchased through the 340B channel rather than the

[00:16:28] more traditional channels, the employer loses the discounts or the rebates

[00:16:34] typically negotiated by PBMs.

[00:16:37] Right? So we could do a whole other podcast on our concerns around PBMs and

[00:16:41] the way that they operate and the fact that they're not meeting the needs

[00:16:43] of employers and purchasers and they're finding ways to make a lot

[00:16:46] of money off of us.

[00:16:47] But it is true that PBMs negotiate rebates.

[00:16:52] A substantial portion of those rebates are passed on to employers and purchasers.

[00:16:56] And so our net price for a particular drug, a particular unit

[00:17:02] is lowered at least through that rebate.

[00:17:05] Again, lots of other games being played here, but we know kind of what

[00:17:08] that negotiated price is.

[00:17:09] In 340B there are no PBM rebates, right?

[00:17:12] There's no PBM in the middle other than actually kind of one PBM that is

[00:17:16] contracted. It's called the Prime Vendor.

[00:17:18] But the rebate is it's one big rebates that's passed on to the hospital.

[00:17:23] That's where the 340B price comes in.

[00:17:25] So when we are purchasing the drug through the 340B channel,

[00:17:30] we lose access to all of our rebates.

[00:17:32] So inherently all the drugs that we're buying are without a rebate.

[00:17:36] The rebate has been passed on to the hospital.

[00:17:37] We're paying more every time.

[00:17:39] So as more and more drugs flow through the 340B channel,

[00:17:42] all of those rebates disappear from the perspective of the employer and purchaser.

[00:17:47] We're working to do a more systematic assessment of exactly how much money

[00:17:53] employers and purchasers are losing because of 340B.

[00:17:56] Obviously it's complicated.

[00:17:58] There's a lot underneath there.

[00:17:59] All of what I'm saying is well documented and is in very kind of clear

[00:18:04] directionally knowing that this is happening.

[00:18:06] Hopefully in the next six months we will have more information that specifically

[00:18:10] is able to identify here's how much more employers in the commercial market are

[00:18:14] paying uniquely because of 340B.

[00:18:17] So let me recap the four distortions that you just illuminated here.

[00:18:22] The first one is 340B in and of itself is a driver of consolidation

[00:18:27] because hospitals want that additional spread on the buy and bill on the medical side.

[00:18:33] They can get pharmacies and they can get dollars from the pharmacy.

[00:18:37] But additionally, consolidation drives up prices because hey,

[00:18:40] you can charge a facility fee.

[00:18:41] So like if you're thinking about this from the patient or the employer or the ultimate

[00:18:44] purchaser standpoint prices just went up.

[00:18:46] I mean, I've heard studies ranging from when there's consolidation in a marketplace

[00:18:50] prices go up 5% to 23%.

[00:18:53] So like this is meaningful if you're thinking about it from a commercial

[00:18:58] standpoint that's the first thing of the first distortion, just this consolidation.

[00:19:03] The second distortion is these hospital systems are actually

[00:19:08] marking up the drugs more for patients, which is question mark.

[00:19:13] You know, who thought that was a good idea?

[00:19:14] If you're thinking about it from a patient standpoint and you're claiming that

[00:19:18] you're a nonprofit serving patients number three, they're more likely to

[00:19:22] write high price drugs and you see that like said out loud.

[00:19:26] I mean, saying quiet part out loud, like there was just a summer summit

[00:19:29] or 340B entities where it was pretty flat out said like we're not going

[00:19:34] to prescribe drugs that are in the IRA that have the IRA price, right?

[00:19:39] Because we don't make as much margin on those.

[00:19:41] We don't make it make as much spread.

[00:19:43] So we're going to buy 340B drugs that are not covered by the IRA.

[00:19:47] We're going to move patients over to the non-ira drugs so that we can make more money.

[00:19:52] I mean like nowhere in there is it like what's best for the patient?

[00:19:56] I don't know.

[00:19:57] I hesitate to make any speculation, but it's unpalatable on its face.

[00:20:02] And then number four is just this whole other thing.

[00:20:07] If we're thinking about this from an employer standpoint or a commercial

[00:20:10] standpoint, the fact that list prices are super high.

[00:20:14] The claim is the gross to net bubble.

[00:20:17] What's the gross to net?

[00:20:19] Employers are only paying the net price.

[00:20:21] Well, if the drug is purchased by hospital system or dispensed by hospital

[00:20:26] pharmacy, a contracted pharmacy, the employers pay in the list price and

[00:20:31] they do not get that rebate because the rebate then goes to the hospital system.

[00:20:34] So there's a lot going on here.

[00:20:37] Some of the studies that show this are in fact funded by the pharmaceutical

[00:20:42] industry, so you certainly can take them with a grain of salt.

[00:20:45] As you just said, I really like how Brian Reed put it.

[00:20:47] He's got a newsletter.

[00:20:48] What he says is given all of the circumstantial evidence here, it

[00:20:52] sure seems like there's a problem even without a smoking gun.

[00:20:55] OK, so recapping the entirety of this discussion, both parts one and

[00:21:01] part two, we have had two big old takeaways so far.

[00:21:04] Now I'm going to tee up the third one, but taking it from the top.

[00:21:07] Takeaway one unintended outcome here that may or may not align with the original

[00:21:13] intent takeaway to is anybody with commercial insurance patients are

[00:21:20] actually potentially paying more.

[00:21:22] The takeaway number three is kind of a little bit of this blame game

[00:21:27] that winds up getting played out, you know, like generally speaking in the

[00:21:30] pharmaceutical market, there have been just fingers pointing between PBMs

[00:21:35] and pharma and the third takeaway that you have pointed out is to stop thinking

[00:21:40] about it that way. What do you mean by that?

[00:21:43] Well, what I mean is it's both as you know, as you said, you know,

[00:21:46] often when we talk about drug pricing, there is this sort of blame game.

[00:21:48] It's pharma versus PBMs and everybody is expected to take a side,

[00:21:51] which of course I recommend it to all of our employers like don't pick a side.

[00:21:54] There's plenty of blame to go around.

[00:21:56] And in this case, it's often, you know, it's pharma versus hospitals.

[00:21:59] And, you know, you don't need to take a side in that case either.

[00:22:03] Right. The thing about 340B that I've noticed again in spending a lot of time

[00:22:07] talking to policy experts, to advocates, to people on the hill is they tend to

[00:22:13] think of it in these black and white scenarios and they tend to carve out

[00:22:16] 340B as a separate thing.

[00:22:18] So they'll spend a lot of time saying, OK, we've got to work on drug pricing.

[00:22:21] We've got to work on the reasons why drug companies price their drugs

[00:22:23] so high in the patent gaming, etc.

[00:22:25] Or we've got to focus on what PBMs are doing and how they're driving up

[00:22:28] the price of drugs.

[00:22:29] And then almost nobody thinks about 340B, right?

[00:22:32] There's a set of 340B people that this is all they think about.

[00:22:34] They think about it all the time.

[00:22:36] But it's always this sort of carved out space where even other people

[00:22:39] who know drug pricing well, I think because 340B is so different

[00:22:43] and so complex, they just sort of mentally or maybe very intentionally

[00:22:46] kind of carve it out and say, I don't know how to deal with that.

[00:22:49] And my plea to employers, purchasers, policy experts, you name it,

[00:22:54] is you've got to stop thinking about 340B as being a different thing.

[00:22:58] Right? Like when it was a five or ten billion dollar a year program,

[00:23:01] you'd be like, yeah, it's this little thing over there.

[00:23:03] It probably has some effects.

[00:23:04] It's not a big deal and that really would have been fine.

[00:23:06] But now that it's the second largest purchasing program in the country,

[00:23:10] it is clearly driving business decisions by manufacturers who are

[00:23:15] probably, I would expect, pricing their drugs at a higher price

[00:23:19] than they otherwise might because they know it's going to have a

[00:23:22] 340B discount. They've got to account for that.

[00:23:24] It's affecting decisions by PBMs in the way that they interact with 340B,

[00:23:29] including the PBM that is the prime vendor of 340B.

[00:23:34] Basically, they're sort of the middleman that you can use if you're

[00:23:36] at your hospital.

[00:23:37] It's affecting behavior by pharmacies and all the chain pharmacies

[00:23:40] that are now in the middle of this program as contract pharmacies.

[00:23:45] It's affecting mail order pharmacies.

[00:23:47] It's affecting the way that employers and purchasers engage in the way

[00:23:51] that they purchase drugs.

[00:23:52] We need to think about 340B as sort of sitting at the center of the drug

[00:23:56] pricing debate and not think of it as some other special thing that we

[00:24:00] can't quite touch because we don't understand it.

[00:24:02] And this is part of kind of the mission that I'm trying to be on

[00:24:05] is to say like, all right guys, let's get educated on this program

[00:24:07] because you can't really understand what's going on in drug

[00:24:11] pricing world if you don't understand what's going on in 340B

[00:24:14] and you don't understand interlinkage between this program

[00:24:17] and everything else.

[00:24:17] Which is probably a great place to end this conversation on that kind of

[00:24:22] call to action.

[00:24:23] So Sean Greminger, is there any place that you would direct people who want

[00:24:27] to learn more about this?

[00:24:29] Sure. I mean a couple places.

[00:24:30] One, the National Alliance is going to be spending a lot more time

[00:24:33] focusing on and thinking about 340Bs.

[00:24:35] So do expect to see more coming out from us.

[00:24:38] Our website is nationalalliancehealth.org and over the next

[00:24:42] six months plus you will be seeing a lot more on kind of the employer

[00:24:46] purchaser perspective on 340B and what changes we think need to be made.

[00:24:49] I'm sure many of your listeners go to him, but Adam Fine does a very

[00:24:52] nice job of helping to understand the program and I think I have not

[00:24:56] talked to him about this particular issue, but I think he's in the same

[00:24:58] place as I am of saying you got to think about 340B in the same way

[00:25:02] that you think about all of the other issues that are affecting drug

[00:25:05] pricing.

[00:25:05] So Adam Fine.

[00:25:06] Sean Greminger, thank you so much for being on Relentless Health

[00:25:09] Value today.

[00:25:10] Thank you so much Stacy.

[00:25:11] It's been an absolute pleasure.

[00:25:11] OK, you have just listened to part two of the 340B conversation with Sean

[00:25:17] Greminger from the National Alliance.

[00:25:19] Wherever you get your podcasts, if you haven't already listened to it,

[00:25:22] you will find part one at the ready for your continued listening pleasure.

[00:25:27] In part one, we talk about how the 340B program came to be to begin with

[00:25:31] and spoiler alert, it's not the reason that most people think is the reason.

[00:25:36] Thanks so much for listening.