Ted Okon Addresses Payment Reform in Oncology, Issues of 340B

April 8, 2021

Ted Okon, MBA, executive director of the Community Oncology Alliance, discusses what influence the new administration may have on payment reform in oncology and issues regarding the 340B drug pricing program.

Ted Okon, MBA, is the executive director of the Community Oncology Alliance (COA).

Transcript

As the transition to Oncology Care First (OCF) from the Oncology Care Model (OCM) grows closer, what are some policy priorities for COA in the coming year?

COA’s been very, very involved in oncology payment reform. If you look on the COA website, we have a map of some 35 different oncology payment reform models across the country and that includes the OCM. That model is winding down, and it remains to be seen what they will do next.

We had a hint of that a couple years back with the OCF, but now you have a new administration in place, you have a new CMMI administrator in Liz Fowler, who's actually a terrific person, I've known Liz for 20 years. And I'm really hopeful this administration will not only put more effort into payment reform, but more effort that's not shoved down the throats of providers and other stakeholders, but where they take the input of stakeholders and providers and really try to fashion models that work and have a high degree or a high chance of success.

I'm hopeful with the OCF model as we hear more details that it will be more of a cooperative effort. We enjoy a great relationship with the CMMI people and the staff, Lara Strawbridge and others, and I'm really looking forward to working with Liz Fowler on these models.

There has been some progress in 340B in recent years. Are you hopeful this will continue in the new administration?

I think one of the biggest problems when we talk about drug pricing is 340B. The 340B advocates would basically tell you that it's just money that's doled out by the pharmaceutical companies, but I think if you look at the massive amounts of profits that hospital systems are making from drugs, especially those hospital systems that have 340B, it's kind of shocking.

If you really want facts behind that look no further than the one of the latest Sanford Bernstein reports that looks at the data from hospitals. Hospitals as of the beginning of this year are required to basically put up their pricing data on drugs and services, and although a lot of hospitals haven't complied, those that had, Bernstein found that that literally hospitals are making 250% profit margins on drugs, and that's not including their 340B discount.

So, I think 340B is a financial bubble that is going to burst. It tends to be a little bit more partisan so I don't know how quickly the Democrats will move on it, but I think there are so many holes with 340B and especially with the fact that hospital systems are benefiting, not patients, from the discounts.

I think it's going to force Congress to do something and move on 340B. So, it'll be an interesting year ahead. And I can just say from COA’s perspective, we're going to push the 340B discounts, follow the patient, and don't go to the building.