On January 30, the U.S. Court of Appeals for the Third Circuit ruled in favor of AstraZeneca, Novo Nordisk and Sanofi on the ability for companies to be forced to provide 340B-discounted drugs purchased by hospitals from an unlimited number of community and specialty pharmacies.

Under 340B, manufacturers who take part in Medicare or Medicaid are required to offer drugs at a discount for certain Patients with lower incomes. However, the number of contract pharmacies that hospitals have added which require 340B discounts has exploded over the past several years. This is, in part, a consequence of a change in policy in 2010 that enabled the use of an unlimited number of contract pharmacy arrangements rather than being limited to a single contract pharmacy by entities with no on-site pharmacy. This is a significant departure from the intention of the program when implemented three decades ago. This expansion has resulted in concerns over a lack of transparency regarding whether the discounts are being utilized properly and by appropriate entities. 

The program has grown to be second only to Medicare Part D in size, and hospitals with 340B agreements have expanded to more affluent communities rather than the underserved communities for which the program was devised. In fact, a study by IQVIA found that only 1.4% of 340B-eligible claims showed that discounts were actually given to Patients. 

This ruling prohibits the U.S. Department of Health and Human Services from enforcing a policy that would enable hospitals to receive discounts through an unlimited number of contract pharmacies. This will help to implement some guardrails on the use of the program and helps to ensure that the communities for which the program was originally conceived to assist ultimately benefit from these discounts. Beyond this ruling, appeals courts in Chicago and Washington, D.C. are currently considering the same issue.

The number of State legislators who intend to retire or not seek re-election for the next session has reached 13, following the announcement last week that the Senate Minority Leader, Steve Oroho (R, LD-24) will not seek re-election. Senator Anthony Bucco (R, LD-25) is considered to be the likely successor to Republican leadership in the Senate.

While several are running for different elected offices, New Jersey State legislators who have officially announced that they will not seek re-election to the Legislature include:

• Senate
• Jean Stanfield (R, LD-8)
• Christopher Connors (R, LD-9)
• Steve Oroho (R, LD-24)
• Nicholas Sacco (D-32)
• Assembly
• Dan Benson (D, LD-14)
• DeAnne DeFuccio (R, LD-39)
• Sadaf Jaffer (D, LD-16)
• Parker Space (R, LD-24) – Running for Senate, LD-24
• Hal Wirths (R, LD-24)
• Angelica Jimenez (D, LD-32)
• Pedro Mejia (D, LD-32)
• Anette Chaparro (D, LD-33)
• Raj Mukerji (D, LD-33) – Running for Senate, LD-32
• Kevin Rooney (R, LD-40)
• Mila Jasey (D, LD-27)
• 

BioNJ will continue to provide updates as we move toward the primary, where all seats in the State Legislature are up. We look forward to working with legislators from both parties to ensure New Jersey remains home to a thriving life sciences industry.

And in other State Legislative news, Governor Murphy signed A3523 (Benson, Stanley, Conaway, Gopal, Greenstein) – Requires health insurers to cover colorectal cancer screenings recommended by United States Preventive Services Task Force and eliminates cost-sharing requirements for certain colonoscopies. 

This legislation will encourage more diagnostic screenings and makes progress towards greater health equity.

President Biden delivered the State of the Union speech last night, and while we expect certain provisions of the Inflation Reduction Act to result in greater access to the medicines that Patients need, we were disappointed to see the life sciences industry was inaccurately isolated as being the driver of the costs that Patients encounter. Given the lopsided and significant role that Pharmacy Benefits Managers and insurers have on the cost of medicines and the fact that it was biopharmaceutical companies which produced the life-saving vaccines that have helped to enable the nation’s emergence from the COVID-19 pandemic, a broader understanding of the true drivers of the costs that Patients confront among policymakers is critical. We look forward to working with federal legislators to ensure that health care costs — particularly those arising from pharmacy benefit managers — are understood by policymakers as the industry adapts to the passage of the IRA moving forward.

Meanwhile, on January 30, the President informed Congress that he will end the national emergencies used to address COVID-19 on May 11 after several extensions following their enactment in early 2020. Accordingly, the health care landscape associated with COVID-19 care will be transitioning to the commercial market — a transition for which the federal government has been preparing since last year due to the Congress not authorizing additional funding for the purchasing of diagnostics, therapeutics and vaccines.

Despite being widely considered a successful and productive program, STAT reports that an official at the Centers for Medicare and Medicaid Services (CMS) indicated that the agency is considering the implementation of a program that would pay less for drugs receiving accelerated approvals. CMS is able to implement demonstration products to pilot policy ideas, and this would be in response to an Executive Order from President Biden to develop demonstrations focused on lowering drug prices.

Developed by the FDA in 1992 in response to the HIV/AIDS epidemic, the accelerated approval pathway ensures that Patients have access to innovative and new therapeutics as rapidly as possible. Therapeutics granted accelerated approval are subject to the same scrutiny and standards for safety and effectiveness as those that receive traditional FDA approval and ultimately receive traditional approval in a median of 3.2 years. Further, given that Medicaid spending data illustrate that the Patient benefits of access to therapeutics via the accelerated approval pathway outweigh the cost of access, BioNJ will find every opportunity to emphasize the importance and success of this program to policymakers.

BioNJ is the voice of New Jersey’s life sciences sector in Trenton and Washington. BioNJ’s Public Policy Support Series sponsorship opportunities are now available for 2023. Help ensure BioNJ continues to deliver our message of improved Patient access and enhanced innovation through a Public Policy Support Series Sponsorship.  

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