A Candid Interview with the Retiring Director of Pharmacy Affairs for the Public Health Service

On January 1st 2010, Jimmy Mitchell, Director of Pharmacy Affairs for the Public Health Service (PHS), announced his retirement. According to Mr. Mitchell’s announcement, he will remain as senior advisor to the new director for a period of time to maximize a smooth transition and to minimize interruption of Office of Pharmacy Affairs services. Following this transition, which is estimated to take 6-9 months, Mitchell will retire after 40+ years of exceptional service with the PHS. Recently, on behalf of C¬ompliance Implementation Services (CIS), I had the pleasure of speaking with Mitchell regarding his upcoming retirement and his take on the projected future of the Office of Pharmacy Affairs (OPA) and 340B program. After his many years directing this agency, I thought it would be an opportunity for the industry to gain his perspective on how the OPA and 340B program has changed over time and how it may evolve in the future. It remains clear that we all have a stake in helping organizations that provide access to safe and effective pharmaceuticals, such as public health clinics, hospitals, and similar programs for the underserved.

It is evident that Mitchell believed improving communications between the stakeholders of these programs and the programs themselves was directly correlated with the program’s success. “Stakeholders have a responsibility to make this program work,” Mitchell said. It has taken some time, but now stakeholders such as service providers, manufacturers, and the OPA are able to talk civilly, work collaboratively, and provide health care for the nation’s neediest.

The Office of Pharmacy Affairs has worked diligently with providers and manufacturers to resolve pricing and other issues. OPA has worked on other problems in the past and anticipates working more closely with drug companies going forward. One example is the development of the Verified Price File, which has been a voluntarily effort to date. OPA has not observed resistance from pharmaceutical companies and, in many cases, large manufacturers have already shared pricing and product data with OPA. This is direct reflection of Mitchell’s ability to effectively direct the program while coordinating OPA initiatives with 340B entities, state programs, and manufacturers.

We see another evolution in the program regarding average manufacture prices (AMPs) and unit rebate amounts (URAs) that are being provided by the Centers for Medicare & Medicaid Services (CMS) on a quarterly basis though an inter-agency agreement. However, defining the term “unit” is the biggest challenge to improving accurate pricing data. Mitchell commented on this challenge, stating that although the will and technology to improve accurate pricing data is evident, the necessary resources are not yet available.

Moving forward, it is necessary to provide credible education for covered entities, states, manufacturers, and wholesalers. Currently, a “cottage industry” has grown up around the 340B program to process data and provide services to manage the program. Mitchell reiterated that experience and consistency are important, so it is unfortunate to see significant turn-over among stakeholders. This lack of experience and consistency has resulted in a range of quality. It is crucial that efforts continue to standardize information, policies, and procedures in an effort to maximize efficiency and cost-effectiveness.

Mitchell reminded us that prior to the last two years, there was not any direct funding for the 340B program. In more recent years, the Health Resources & Services Administration (HRSA) has been generous in providing funding for the program. HRSA facilities are less than one-quarter of the covered entity population; However, OPA has been benevolently resourced by HRSA over the years. Mitchell noted that fiscal year 2010 marked the first year that OPA received a dedicated funding line in the budget, and the President’s proposed budget for fiscal year 2011 includes $5 million for these services.

He also anticipates the following:

• Increased overall program integrity, as it is an important “brick in the wall” of the OPA foundation.
• Improved integrity of the database via increased automation, resulting in reduced manual intervention.
• Improved patient safety and increased clinical pharmacy services resulting in decreased adverse effects of pharmaceuticals.
• Greater demands for transparency and integrity on all fronts.

For the program to function with maximum integrity, all stakeholders must be actively involved. As a result, we should see a decrease in overhead for manufacturers, as well as minimized odds of diversion and duplicate discounts with Medicaid.

The OPA team works closely with state Medicaid programs and with CMS. Currently, there is a unique opportunity to work with these governmental entities. A sense of urgency is heightened due to current state funding needs. OPA is willing to work with the states to increase the effectiveness of Medicaid as it interacts with 340B providers. Since they are separate programs, Mitchell admits that “it won’t be easy, but I think it’s a great opportunity.”

Mitchell feels that the greatest changes in the program include:

• The willingness of stakeholders to talk with one another civilly; a big change.
• Doubling of the program over the last decade, which has a high probability of doubling again, according to concepts currently under consideration.
• Emergence of the Prime Vendor Program (PVP), which has increased its value to the covered entities by increasing the efficiency and effectiveness of the program. The PVP provides services via a five-year competitively awarded contract. There is no federal funding provided.
• Implementation of Pharmacy Services Support Center (PSSC) — under contract with the American Pharmacist Association — to help small clinics get high-quality technical assistance and ramped-up educational programs. PSSC is implemented through a competitively awarded contract, and clinics can email requests for assistance. They work with the sites to provide both “boots on the ground” in some instances, as well as advising small clinics and hospitals on consultants when appropriate.

Mitchell was kind enough to entertain my questions regarding the current status of the PVP and how manufacturers may be able to work most effectively with the PVP. Here is what he said:

• “The program is administered by Apexus, which became a non-profit at HRSA’s request. Any revenue generated by the program is used to run the program or returned to the covered entities.”
• “The PVP scrubs the eligible entities database, which gives manufacturers greater assurance that only covered entities legally able to access the program are listed, thereby reducing exposure from inadvertently setting a new ‘best price’ for the Medicaid program.”
• “10,000 entities participate, which decreases the cost of accessing those entities for manufactures participating in the 340B program.”
• “Chris Hatwig, vice president of the program brings passion, commitment, and experience to the PVP.”

A pertinent question within the industry is how to best communicate with OPA on restating PHS/340B pricing. Mitchell has stated many times that if you’ve overcharged an eligible account, you have to make them whole, suggesting that “confession is good for the soul.” He strongly encourages manufacturers with pricing discrepancies to “work with us,”as the OPA goal is to make the program work most effectively. “The safety net community (PHS/340B eligible entities) is a national resource that needs to be — and increasingly is — recognized as such,” said Mitchell.

Additional insights included a prediction of natural growth of 3-4% per year. Moving forward, we should expect to see “more integrity, more transparency and more accountability,” said Mitchell. Integrity provisions have been recommended by the Office of the Inspector General, and HRSA has endorsed them. Constraints on their implementation include limited resources and, in some cases, the need for additional legal provisions.

OPA’s mission is to promote access to clinically effective pharmacy services, and manufacturers have a vested interest in maximizing positive, efficient use of the program and the products it provides. There is a great opportunity for teamwork through a collaborative effort while maintaining a focus on chronic disease populations to maximize the use of “these fantastic drugs,” as Mitchell calls them. The initiative is Patient Safety & Clinical Pharmacy Services Collaborative (http://www.hrsa.gov/patientsafety/ ).

Currently, there are 110 teams comprised of more than 350 organizations, including health departments, medical / pharmacy schools, and many other health care entities.

In conclusion, Mitchell sees a bright and vital future for the program and encourages all stakeholders to stay in contact with each other and OPA. Open and clear communication is the key to successful participation in the 340B program. I’d like to wish Mitchell well as he approaches retirement. He has been the “face of OPA” for many years and has made countless contributions to its success. Many can thank him for that.

About Jimmy Mitchell

Jimmy R. Mitchell, RPh, MPH, MS, is the Director of the Office of Pharmacy Affairs (OPA) working in the U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA), and Healthcare Systems Bureau (HSB). He has served the Public Health service for more than 40 years and plans to retire this year, assuming the position of Senior Adviser and Acting Director, OPA.

About the Author

Bill Baxter is the Strategic Advisor for Government Affairs at Compliance Implementation Services (CIS). Before joining CIS, Bill was a Director of Medicaid Market & Rebates at Johnson & Johnson Health Care Systems, where he was responsible for Medicaid basic and supplemental rebates and state pharmaceutical assistance rebate issues for all J&J operating companies. His extensive industry experience includes field sales management, sales training, government affairs, and marketing for Ortho-McNeil Pharmaceuticals, Johnson & Johnson ICOM, and Johnson & Johnson Health Care Systems.

Article Summary

As recent healthcare reform legislation moves forward, the author speaks with 40-year Public Health Service veteran Jimmy Mitchell regarding his upcoming retirement and his take on the projected future of the Office of Pharmacy Affairs (OPA) and the 340B program. The author seeks to gain Mitchell’s perspective on how OPA and the 340B program have changed over time and how both may evolve in the future.