• Hub and Patient Services Companies. Having the dexterity to navigate the labyrinth of reimbursement challenges facing brand products is table stakes for hub and patient services companies. Varied benefit design, ever-changing payor requirements for how prior authorizations can be processed, and data privacy laws, among others, are obstacles to providing a streamlined, transparent, and tech-reliant solution. Hub and patient services companies with a broad range of offerings spanning enrollment, reimbursement support, manufacturer-free drug program management, and adherence monitoring are likely to win out over companies offering biopharma one part of a piecemeal solution. • Data-Driven Insights. Across all pharma services companies, the ability to generate data-driven insights is key. Beginning as early as pre-commercialization and extending to the end of a product’s life cycle, clean and actionable data drives market access. Whether it be supporting expanded payor coverage criteria, understanding prescribing and utilization patterns, or targeting reimbursement challenges, crisp and actionable data is invaluable for biopharma companies. • Geographical Access to Care. Geography is also a factor in access to care. Whether it be due to a rural location, socio-economic considerations that limit access to sites of care, or even our “on demand” culture, drug manufacturers look to pharma services companies to bridge the gaps. Consumer-driven prescribing with integrated dispensing, alternative sites of care for non-self-administered drugs, technology applications to reduce steps and redundancies are just some of the solutions upon which biopharma companies rely. 3. Continued Market Response to 340B Program Court Decision BY JEFF DAVIS In 2024, we will continue to see healthcare providers who participate in the federal 340B drug pricing program consider opportunities to expand their use of discounted drugs purchased through the 340B program and increase access to program savings. This comes on the heels of a recent federal district court decision ruling against the government’s narrow interpretation of a 340B-eligible “patient.” Under the 340B statute, safety net providers can purchase outpatient drugs at discounted prices and use them for their “patients.” The more individuals who qualify as eligible patients, the more 340B drugs a provider can use and the more program savings a provider can generate. On November 3, 2023, a judge in the U.S. District Court for the District of South Carolina overturned part of the government’s interpretation of what a 340B-eligible patient entails. In Genesis Healthcare Inc. v. Becerra , the court ruled in favor of a 340B provider (Genesis) that challenged an audit finding issued by the Health Resources and Services Administration (HRSA). HRSA took the position that Genesis committed diversion in violation of the 340B statute by using 340B drugs for individuals who were not the provider’s patients because the prescriptions were not written at the provider’s locations and did not originate with Genesis. The court found that a prescription does not need to originate with the provider to be 340B-eligible, although the patient must still have had an initial provider encounter, and the provider must still have an ongoing relationship with the patient. As we begin the new year, 340B providers and their pharmacy partners will continue to consider the impact of the Genesis decision on their 340B programs, including whether there are opportunities to update their policies on patient eligibility to qualify additional prescriptions as 340B-eligible. 340B providers also will continue to consider whether opportunities to update 340B policies may help mitigate the impact of drug manufacturer restrictions on the use of 340B drugs through contracted pharmacies, which have diminished the ability of 340B providers to generate program savings in recent years. These developments are also likely to impact deal activity in and around this space on a go-forward basis.
3 HEALTHCARE PRIVATE EQUITY: 2024 OUTLOOK & TRENDS IN M&A |
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