1. Challenges and Opportunities Under The 340B Program Safety Net Hospitals for Pharmaceutical Access Ted Slafsky, Executive Director May 10, 2010, 4:00-5:00 PM ted.slafsky@snhpa.org ted.slafsky@snhpa.org 202-552-5860www.snpha.orgwww.snpha.org © 2010 Safety Net Hospitals for Pharmaceutical Access

2. About SNHPA An organization of 500 public and private non-profit hospitals and health systems throughout the U.S. that participate in the 340B Program. When Congress was creating the 340B Program in 1992, SNHPA took the lead role in ensuring that hospitals were included in the program, and has been representing 340B hospitals ever since. SNHPA monitors and serves as an advocate on federal legislative and regulatory issues related to drug pricing and other pharmacy matters affecting safety-net providers. SNHPA educates members on 340B policy developments in Congress and in the federal agencies. 2 SNHPA Ted Slafsky (202) 552-5850 www.snhpa.org

3. Continued growth of uninsured, under-insured patient populations creates economic pressure for nonprofit and public hospitals. ◦ 23 percent increase in uninsured patients treated by safety net hospitals. ◦ 10 percent increase in uncompensated care costs, averaging $2.3M increase per hospital. ◦ Large undocumented patient population excluded from Medicaid and new insurance exchanges. Economic Challenges for Safety Net Hospitals – More Uninsured 3 SNHPA Ted Slafsky (202) 552-5850 www.snhpa.org

4. Hospitals are closing or are being forced to sell to for- profits. ◦ For-profit Vanguard system announces intent to purchase nonprofit Detroit Medical Center in March 2010. ◦ Boston Archdiocese has negotiated sale of six-hospital Caritas Christi System to private equity firm. ◦ Jackson Health System in Florida on brink of closing two facilities. ◦ New York’s St. Vincent’s Hospital April 30th closure => 3500 layoffs, emergency room services lost to community Economic Challenges for Safety Net Hospitals – Closures, Mergers 4 SNHPA Ted Slafsky (202) 552-5850 www.snhpa.org

5. Impact of Health Care Reform 340B expanded to rural and children’s hospitals but no inpatient discounts. Medicaid expansion and health exchanges, but reimbursement likely to be inadequate. DSH funding to be reduced but uninsured, under- insured still must be treated. 340B providers need to continue to receive discounts on all drugs, rather than only for certain patient populations. Extending 340B to in-patients still #1 priority. Safety Net Hospitals for Pharmaceutical Access Ted Slafsky (202) 552-5850 www.snhpa.org 5

6. Opportunities for Community Pharmacies with 340B Program New guidelines allow for expanded use of contract pharmacies. Currently approx. 2600 contract pharmacy arrangements. Majority are with community pharmacies. New guidelines should encourage dramatic growth in number of contract pharmacy arrangements. 340B providers willing to pay for MTM, formulary management, and other services. Safety Net Hospitals for Pharmaceutical Access Ted Slafsky (202) 552-5850 www.snhpa.org 6

7. Independent Pharmacies Participating & Flourishing as Contract Pharmacies Many great success stories already for community pharmacies. Eaton Apothecary, Holliston MA Contracts with 10 federally qualified health centers (FQHCs), one FQHC-Look-Alike, and two hemophilia treatment centers to provide pharmacy management Advantages: 1.Adds volume of business: thousands of scripts/month for a pharmacy location 2.Niche business that chains may be less interested in. 3.Now may partner even if covered entity has contract with chain. eatonapothecary.com/services/partner.php Safety Net Hospitals for Pharmaceutical Access Ted Slafsky (202) 552-5850 www.snhpa.org 7

8. Independent Pharmacies Participating & Flourishing as Contract Pharmacies (cont’d) Taos, NM Pharmacy & Holy Cross Hospital (47-bed nonprofit) ◦ Robust patient safety initiative focused on diabetes care. ◦ Provides access to medications and MTM for the uninsured and under-insured. Goodale Pharmacy (Dover, NJ): ◦ Contracts with Zufall Health Center (FQHC). ◦ Collaborates with NJ Primary Care Association. ◦ Part of HRSA patient safety initiative. Safety Net Hospitals for Pharmaceutical Access Ted Slafsky (202) 552-5850 www.snhpa.org 8

9. Capitalize on 340B Experience Rural Hospitals often don’t have own pharmacies. Contract with them! Chains are already approaching hospitals. Safety Net Hospitals for Pharmaceutical Access Ted Slafsky (202) 552-5850 www.snhpa.org 9

10. Educational Opportunities SNHPA Willing to Co-Host Webinar with NCPA 14 th Annual 340B Coalition Conference July 19-21, 2010 Omni Shoreham Hotel, Washington, DC Special Breakout Session for Community Retail Pharmacies www.340Bcoalition.org Drug Discount Monitor www.drugdiscountmonitor.com SNHPA Ted Slafsky (202) 552-5850 www.snhpa.org

11. SNHPA Contacts Bill von Oehsen President and General Counsel william.vonoehsen@snhpa.org (202) 872-6770 Ted Slafsky Executive Director ted.slafsky@snhpa.org (202) 552-5860 Stuart Gordon Director, Legal and Regulatory Affairs stuart.gordon@snhpa.org (202) 552-5851 SNHPA Ted Slafsky (202) 552-5850 www.snhpa.org