September Coffee Chat: The State of Patient Access

On the state level, patients are seeing an increasing number of barriers that are making it harder for them to access the therapies they need. Whether it is navigating a myriad of alternative funding programs (AFPs), the impacts of the 340B program on access to care, or prescription drug affordability boards (PDABs), patients and their advocates are finding more obstacles to getting innovative medicines.

This was the topic of conversation at the Biotechnology Innovation Organization (BIO) September Coffee Chat, “State of Patient Access,” where patient advocates explained three of the access barriers they are increasingly seeing on the state level today.

Alternative funding programs: A risk to patients

Alternative Funding Programs (AFPs), otherwise known as specialty carve-outs, are third-party programs marketed to self-insured employer health plans that remove specialty drugs from an insurer’s formulary of covered drugs. AFPs then direct patients to get the drug from another source. Often, patients are told to apply to drug makers’ charitable patient assistant programs (PAPs).

“Alternative funding programs’ main goal is to identify an alternative source for the drug,” said Ashira Vantrees with the Aimed Alliance. “So that’s typically an international pharmacy or manufacturer’s patient assistance program.”

As Vantrees sees it, patients are often caught off guard and pressured into a coverage situation where they have little say, power, or recourse.

“We know consumers with chronic conditions are very savvy, and they’re very thoughtful in making open enrollment choices. So, when they’re contacted by these third-party programs, and told, ‘If you don’t work with us, you’re going to be responsible for 100% the cost of this medication,‘ we know that is a jarring situation,” explained Vantrees. “And so really, with no other options, patients are required to work with the alternative funding program to access their medication.”

Often, AFPs get charity drugs for free and take a fee from insurance companies, who save money. All the while, AFPs deplete patient assistance dollars and leave patients worse off once the funds run out.  “Because those costs can be thousands of dollars a month, and this amount is not going to count towards a patient’s annual cost sharing limit,” said Vantrees.

At the same time, patients are struggling to get timely access to the therapies they need. AFPs, Vantrees explained, have been shown to delay patients’ access to medications.

“There’s a really good survey done by Hope Charities that found that after patients have gone through that paperwork process to work with the Alternative Funding Programs (AFP), they experience a delay in access to their medication of about 68 days, which is just over two months,” said Vantrees. “That’s a pretty substantial delay in access to someone’s medication. And the same survey also found that of those, 25% experience negative consequences from those delays.”

That is why patient advocates have taken aim at AFPs to try to remedy the problem.

As Vantrees explained, a task force was created by Cancer Care, the National Bleeding Disorders Foundation, and Aimed Alliance. The goal: bring together advocacy organizations that are working on addressing alternative funding programs and identifying policy solutions.

“Dozens of patient, provider, and healthcare groups are now part of the task force, and we’ve had really productive conversations with the responsible agencies when it comes to trying to educate them on the problem of AFPs and the potential solutions as well,” Vantrees said.

And they have made some headway in the policy space on the state level, though there is still a lot of work to do.

“The good news on the AFP front is that they were banned this year in Indiana and Maryland as part of legislative efforts that were also prohibiting maximizers and accumulators,” said Brian Warren, Vice President, State Government Affairs at BIO, who moderated the event. “At the same time, we also saw legislation in Colorado during a special session that was seeking to essentially codify AFPs to give them some type of statutory spot in law where they exist.”

Vantrees acknowledged both the challenges and gains of policy work being done, noting that the landscape from state to state looks very different.

“I think the Colorado bill is really interesting because we don’t typically see a codification of an existing practice as being legal,” Vantrees noted. “We usually say things are illegal in law, but there are good signs. The Bill had reporting requirements for brokers and PBMs (pharmacy benefit managers) who were trying to pitch these programs, as to what they’re allowed to say. There was a recognition that a breach of any of those disclosure requirements would be an unfair and deceptive trade practice under state law, and there were financial penalties for breaching of the law, which are really important in terms of an actual deterrent of the law.”

340B: An undeniable need for transparency and accountability

As Bio.News has reported, the 340B program has ballooned in the years since its inception, and has already doubled in size since 2019, with prescription drug sales at discounted prices exceeding $66 billion, more than $12 billion above 2022. Yet, despite this growth, patient advocates have noted that the intended benefits of the program are often not making their way to patients.

And according to Kathy Oubre, Chief Executive Officer at Pontchartrain Cancer Center and Coalition of Hematology and Oncology Practices, this is especially true for oncology patients in rural and underserved areas.

“The 340B program was created by Congress in 1992 with the idea to help safety net providers stretch scarce federal resources as far as possible to reach more eligible patients,” Oubre explained. “It required pharmaceutical manufacturers to provide drugs at a discount, usually between 40% and 60%, to those covered 340B entities—rural hospitals, federal qualified health centers, and your disproportionate share hospitals. It was a buy low, sell high model that would allow entities to use that margin to support patient programs and community programs. The theory was to stretch those dollars so they can provide care to more patients.”

But increasingly every year, 340B entities have moved away from passing the savings onto patients and towards increasing revenue and expanding business. This has become especially true in the oncology space, as Oubre has seen firsthand.

In her home community in Louisiana, 340B hospitals have expanded to acquire smaller independent oncology practices—and the patient revenue streams associated with them. But with that expansion comes a new focus on patient populations that are more socioeconomically affluent, rather than lower-income and underserved—a move totally out of line with the program’s original intent. There is also a move to consolidate care in larger settings, putting a higher travel burden, and therefore barrier to access, on rural patients. This is unfortunately not uncommon.

“Back in about 2014, the NIH published a study that reported that 340B hospital-employed oncologists generate about a million dollars annually in revenue for their hospital,” said Oubre. “Consequently, this business practice ends up moving patients and providers from the community setting into hospital settings, which, data shows, are also more expensive sites of care. It also has increased competition.”

Not only are patients being moved from community oncology to hospital settings, but they also must travel further and even pay more. “Sometimes those hospitals no longer sit in the communities that patients need,” noted Oubre.

“Our community practices can’t afford to offer chemo at these full prices and compete with the hospitals that benefit from these discounts,” said Oubre. “Sometimes, these disparities force many community oncologists to either close or be bought out.”

And what happens when these community practices close their doors? Prices go up for everyone.

“And the data has also shown that when you move patients from community oncology into these health hospital outpatient centers, you also see healthcare dollars increase. There have been multiple studies that have shown that the cost for oncology service is significantly higher at 340B hospitals compared to non-340B hospitals and community oncology centers. Hospitals are reimbursed for administering more chemo in that buy low, sell high mentality.“

Yet, patient advocates, communities, and local and state governments are taking note of the issues that this system is presenting and are working to understand the real costs of these programs and whether they work for patients and communities.

“The North Carolina Treasurer’s Report was initiated because the state was facing a multi million dollar budget problem. They investigated how 340B impacted the state, the taxpayers, and the state health plan,” said Oubre. “What they found was that the state 340B hospitals billed the state health plan about five and a half times more for their drugs than their acquisition cost. So to put a finer point to that, the 340B hospitals in North Carolina generated an average spread of $13,600 per patient, per claim.”

The report also looked at non-340B hospitals, Oubre explained, and found that they were able to determine that those entities billed significantly less in claims cost per patient, proving that the problem is not universal to hospitals.

“There is a decent disparity between 340B and non-340B entities,” said Oubre. “One of the things that they concluded was that patients, taxpayers and state employees are paying those inflated costs while hospitals pocketed the spread in that state.”

As Oubre puts it, there are a number of reasons to reform the program. For example, in her community, if Pontchartrain Cancer Center decided to close, her oncology patients would be faced with a 45-minute commute to the nearest center for care.

“We’ve talked to our patients, and a lot of them tell us it would be a true access issue for them to be able to drive that 45 minutes each way,” Oubre said. “And it’s not just the patient, a lot of times, these cancer patients are relying on caregivers or friends or loved ones to bring them to those appointments and back.”

“The calls for reform that I see focus on increased transparency, greater reporting requirements on how 340B revenue is used, and improved oversight,” explained Oubre. “There are also calls for enhanced regulatory authority to enforce these program requirements and clarification of the rules. I want to see a better definition of a patient and the role of contract pharmacies in the program.”

Prescription Drug Affordability Boards: A non-workable theory

Another barrier to patient access that advocates are seeing more and more is the emergence of prescription drug affordability boards (PDABs).

“The entire design behind PDABs is really the issue, in part because it favors the perspective of payers to that end of saying, ‘Hey, if we cap the allowable payment or reimbursement to a certain degree through the payer, then maybe that’ll reduce costs with regard to medications,’ ” explained Jen Laws, President & CEO at the Community Access National Network (CANN).

“Essentially, the thinking was if you can cap that payment then, in theory, the insurer will then reduce the cost around benefit design and whatnot for patients,” Laws continued. “But because of all of the problems around PBMs and how they’re exploitative and extracting value away from patients, that doesn’t really functionally work that way. It also doesn’t take into consideration pharmacy costs of acquisition. It doesn’t take into consideration any of the price concessions that already exist by PBMs, and it doesn’t take in any of the issues related to 340B, for example, for when 340B is working the way it’s supposed to.”

Interestingly, Laws explained, CANN got involved in the PDAB issue specifically because of 340B support for the AIDS drug assistance programs—a scenario in which the 340B program still works. But, as Laws explained, the incorporation of PDABs from state to state will undercut the usefulness of these systems.

“AIDS drug assistance programs (ADAP) are state based, but federally funded, and work through the Ryan White HIV AIDS program to provide no-cost medications to patients that are enrolled in it,” said Laws. “On average, cross country, 47% of ADAP programs are funded through 340B, so if you cap that reimbursement rate, then we don’t get the spread, and we can’t do the reinvestment, then we start to see degradation of the ADAP program. That means that you’re not directly helping patients. ADAPs are our gold standard in 340B; those dollars are directly passed through to patients for no cost medication—that is the way it should be. But a PDAB is going to decimate that.”

It is not just the ADAP system that would be negatively impacted by PDABs either, Laws explained.

“PDABs would also negatively impact the Medicaid rebate drug program,” said Laws. “Medicaid gets rebates. There’s mandatory rebates in every state that are then reinvested into the program to reduce both state and federal share costs associated with it. There are all of these mechanisms: if a pharmacy can’t afford a drug, how’s a patient going to get a drug? How does that not further drive the desertification of independent pharmacists? How do these access issues suddenly become a much, much bigger problem for patients?”

And, as many advocates have noted, PDABs completely overlook the issue of PBMs and their role in keeping costs high for patients, all while pocketing rebates and discounts. In essence, PDABs are an overly simplistic solution to a complex problem, and as many states are finding, PDABs are no solution at all.

“Tying PDAB reform with PBM reform as well as with the sustainability of Medicaid is quite useful to us, but generating the data around PDABs is kind of hard, because PDABs function on a theory,” said Laws. “There is no evidence that there is benefit to patients. Indeed, what we do know about how the ecosystem works is it would be quite detrimental to patients, but even getting legislators to define the word affordability has been impossible. These boards don’t define affordability. So what are you actually aiming for?”

And the ways PDABs have worked from state to state differ wildly. For example, while Colorado’s PDAB seems to be sticking around rather persistently, New Hampshire recently repealed their PDAB.

“Part of why New Hampshire repealed their PDAB is because it’s useless and it cost the state several million dollars to run with zero results over three to four years,” explained Laws. “And we’re pointing that out too. I think we’re going to have decent traction in potentially getting the PDAB budget pulled back to nil in Colorado next year as well.”

And a great deal of this push back, Warren explained, is because patients are starting to see how these boards work—or don’t work. Turns out they are making their voices heard.

“If you’re at the Colorado or Maryland or Oregon PDAB meetings, not the legislative hearings, but their actual board meetings, it’s mostly patients talking about, ‘Hey, wait a minute, we’re seeing this and we don’t like the direction you’re going in,’ ” noted Warren.

Laws echoed Warren’s statement, saying, “Patient advocacy organizations are highly involved in these board meetings, but whether the boards are actually paying attention to them is an entirely different issue.” Another concern Laws flagged was states potentially circumventing the board’s deliberation process altogether by tying reimbursement to things like prices ‘negotiated’ by the Centers for Medicare and Medicaid Services under the Inflation Reduction Act.

The point, as Laws and his colleagues explained, for any issue on the docket is for patient advocates to keep showing up and keep explaining the impact of any program or policy on the patient, because that is what we are all here for.

Improving the state of patient access

Ultimately, the growing patchwork of state-level programs meant to improve access is, in many cases, doing the opposite—creating new barriers, delays, and inequities that leave patients caught in the middle.

From the deceitful practices of alternative funding programs, to the profit-driven distortions of 340B, to the unproven theories behind prescription drug affordability boards, the through line is clear: policies that fail to center patients in their design and execution will fail patients in practice. Yet advocates are not standing still.

It’ll be another busy year for 340B, and there’s still a ton of work to be done on the PDABs front, Warren concluded, but there is also positive movement on issues like alternative funding programs where we have seen a few states move to ban them. “So things are heating up,” he added.

Across the country, coalitions of patients, providers, and policymakers are pushing for transparency, accountability, and reform that prioritizes timely, equitable access to the therapies people need. Their efforts remind us that affordability and access are not abstract policy goals—they are lifelines for millions of Americans navigating chronic and life-threatening conditions every day.