1. Working Together To Improve Access To Care Presentation to Center for Business Intelligence Patient Assistance Programs Conference March 11, 2003 Alexandria, VA Ted Slafsky Director Public Hospital Pharmacy Coalition Powers, Pyles, Sutter & Verville, PC 202-872-6742 Ted.Slafsky@ppsv.com Powers, Pyles, Sutter & Verville, PC www.phpcrx.org Ted Slafsky - ted.slafsky@ppsv.com (202) 466-6550

2. The Public Hospital Pharmacy Coalition Established in 1992 When 340B Law Passed Section 340B of Public Health Service Act (Section 602 of VHCA) DSH Hospitals in 340B Drug Discount Program Part of National Association of Public Hospitals and Health Systems Formed to Increase Affordability and Accessibility of Rx Care for Poor and Underserved Powers, Pyles, Sutter & Verville, PCTed Slafsky – ted.slafsky@ppsv.com (202) 466-6550

3. 340B Program Created in 1992, Two Years After Passage of Medicaid Drug Rebate Law Rx Companies Required to Give Best Price to Certain DSH Hospitals, FQHCs, ADAPs, Other Public Health Clinics Receiving Federal Grants Operated by Public Health Service’s Pharmacy Services and Assistance Branch Within Health Resources and Services Administration Minimum 15% Discount Off of Average Manufacturer Price and 11% Discount for Generics Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

4. Eligibility Criteria for Hospitals Owned or Operated by State or Local Government Granted Governmental Powers by State or Local Government Private Non-Profit with Contract With State or Local Government to Serve the Indigent –Must Be Receiving No or Very Little Reimbursement For Services Medicare DSH Adjustment % of 11.75 or Greater Must Withdraw from GPO for Outpatient Purchases Only 160 of the 5,800 U.S. Hospitals Participate in 340B Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

5. Importance of 340B Program and PAPs to our Hospitals Public Hospitals Provide Care to All Regardless of Ability to Pay 44% of Outpatient Visits by Uninsured NAPH Hospitals Represent Only 2% of Hospitals in U.S. but Provide ¼ of Uncompensated Care Treat Patients with Multiple Complications (AIDS, TB, Diabetes) Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

6. Importance of 340B Program and PAPs (cont’d) 41 Million Under 65 Uninsured Another 13 Million Medicare Beneficiaries Have No Drug Coverage A Good Portion of These Patients Come to DSH Hospital Pharmacies for Care Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

7. Importance of 340B and PAP Programs (cont’d) Federal and Local Funding Evaporating Many Outpatient Pharmacies Have Been Forced to Close Others Adopting Restrictive Formularies and Increased Cost Sharing Many Considering Closing Their Doors Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

8. Importance of 340B Program and PAPs (cont’d) 340B Program Saves Hospitals Over $2 Million Annually Saves Medicaid Over $50 Million Each Year by Billing at Acquisition Cost Saves Millions to State ADAP Programs Each Year PAPs Save Hospitals Millions Each Year Enables Pharmacies to Remain Open and Improves Access to Care Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

9. Joint Survey Between UHC and PHPC Summer 2002 80% Utilizing PAPs –Down From 90% in Year 2000 University of New Mexico Saved $3.7 Million in FY 02 From PAPs –43% of All Outpatient Drugs Powers, Pyles, Sutter & Verville, PCTed Slafsky – ted.slafsky@ppsv.com (202) 466-6550

10. Ways to Reduce Burden on 340B Hospitals and Their Patients 1) Modify PAP Application Process To Coordinate With Hospitals Existing Procedures 2) Accept Hospital’s Definition of Indigence. Take Advantage of Existing Financial Screening 3) Provide Bulk Shipment Replacement –Product Inventory Is Front-Loaded –Products Replaced In Bulk Based On Documented Usage 4) Allow Electronic Submission of Forms Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

11. Ways to Reduce Burden on 340B Hospitals and Their Patients (cont’d) 5) Reports Submitted To Rx Companies Include Data To Allow Monthly or Quarterly Audit and Review 6) Do Not Require Re-Application Every 30 Days 7) Help Hospitals Treat Growing Number of Undocumented Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

12. Most Popular Institutional Programs 1) AstraZeneca 2) Bristol-Myers Squibb 3) Ortho McNeil 4) Merck 5) Aventis Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

13. Merits of AstraZeneca Program Patient Confidentiality Maintained Bulk Replacement on a Quarterly Basis Entire Product Line is Available for Bulk Replacement Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

14. Bulk Replacements are a Win Win Improves Patient Compliance and Quality of Care Reduces Risk of Untreated Diseases and Adverse Consequences Lowers Labor Costs for All Opens Opportunities For Patients To Have Access To The Newest (And Potentially Best) Drugs Patients May Become Paying Customers Increases Brand Loyalty Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

15. Bulk Replacements are a Win Win (cont’d) Increased Feeling of Partnership With Rx Company Hospitals Provide Support To Prescribers- Pocket Card and Posters Corporate Partners Recognized Tax Write Off Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

16. Alternatives to Free Drugs 1) Nominal Prices 2) 340B Subceiling Discounts 3) Drug Discount Cards? Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

17. Alternatives to Free Drugs 1) Nominal Pricing Will Not Impact Price Given To Government Purchasers –Exempt From All Federal Discount Programs  VA 603 Program (Federal Ceiling Price)  Medicaid Rebate  340B  AMP and Best Price Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

18. Alternatives to Free Drugs (cont’d) 2) 340B Subceiling Discounts  340B Law Creates Ceiling, Not Floor  Exempt From Best Price  Hospitals Saved $21 Million In Additional Discounts in 2001 3) Drug Discount Cards?  Members and Patients Have Some Concerns 4) Other Suggestions? Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

19. Other Issues Where Can PAP Drugs Be Dispensed? Perception That Bulk Shipment Arrangements Only Allowed With Hospitals With Outpatient Pharmacies However, Hospitals Often Can Dispense PAP Drugs Through Its Acute Care Pharmacy Even Without Licensed Outpatient Pharmacy Depends on State Pharmacy Law Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550

20. Resources PHPC Web Site – www.phpcrx.org Ted Slafsky – ted.slafsky@ppsv.com or (202) 872-6742 Bill von Oehsen – william.vonoehsen@ppsv.com or (202) 872-6765 OPA Web Site - www.hrsa.gov/odpp/ 340B Coalition Conference July 14-16, 2003 www.340bcoalition.org Powers, Pyles, Sutter & Verville, PC Ted Slafsky – ted.slafsky@ppsv.com (202) 466-6550