Dr Edward Licitra Talks 340B, Building Employer Relationships


340B was developed with positive intentions, but has resulted in unintended consequences, said Edward J. Licitra, MD, PhD, chairman and chief executive officer, Astera Cancer Care.

Edward J. Licitra, MD, PhD, chairman and chief executive officer, Astera Cancer Care, took part in the recent COA Payer Exchange Summit as a participant in the dinner discussion, "Value-Based Care in Action."

Here, Licitra talks about how 340B policy impacts Astera as well as barriers community practices face when forming relationships with employers, one of the points highlighted during the dinner discussion.


How does 340B impact your practice?

So, 340B is a program which was developed a number of years ago, and it had the best of intentions. However, over the last several years 340B has actually resulted in unintended consequences; 340B and the rebates that it provides for certain organizations and the institutions have resulted in consolidation of health care providers away from community based settings, and into much more expensive hospital based settings. This in general has not been good for community oncology. But it's also probably not been good for health care in general, since [in] those settings—where the patient was ultimately treated—the cost is much higher. I also think that it will drive the prices of pharmaceuticals higher; because of the excessive rebates that are being paid out by the pharmaceutical industry, that will ultimately kind of translate itself into higher launch costs for drugs. So ultimately, we believe in the 340B program, if it's utilized for the proper patient, but unfortunately, it has been overutilized, in my opinion, and in the opinion of many people. And, I think we need to kind of rein it in a little bit. And if we do, then I think we'll get back to a situation where 340B will achieve its objective, without really disrupting the way that care is delivered in terms of consolidation and cost.

What barriers do community practices encounter in establishing direct relationships with employers?

So, employers are really important to build relationships with as it relates to contracting. Most companies in the United States are self-funded, or they have self-funded insurance. And, we've initiated a lot of efforts to work with self-funded employers. But what we really need to do is … educate self-funded employers about the value of community based care. [With] self-funded employers, often they know about the large institutions, the large academic centers; their benefit consultants give them a lot of information about those centers. And I think we ultimately as community based providers have to get the story out and get the word out and show the employers that there are other options, and some of those options can turn out to be much better than the options that they're currently utilizing. So I think the biggest thing that we can do is continue to work in the context of talking to employers educating them regarding the things that we can provide for their employees. And ultimately after some period of time, I think they will see the value of community oncology and then that will be better for both the employer and for their employees who will be our patients.

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