COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Counsel

DATE:

December 5, 2005

BOARD MEETING DATE:

December 13, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Thomas F. Casey, III, County Counsel

SUBJECT:

Resolution Authorizing Agreement with the Law Firm of Powers, Pyles, Sutter and Verville PC for Advice and Services in Extending the Federal 340B Discount Pharmacy Program at San Mateo Medical Center to County Correctional Health Patients

RECOMMENDATION:

Adopt a Resolution authorizing and directing the President of the Board to execute an agreement with the law firm of Powers, Pyles, Sutter & Verville PC for advice and services in extending the federal 340B discount pharmacy program at San Mateo Medical Center to County correctional health patients

VISION ALIGNMENT:

Commitment: Ensure Basic Health and Safety for All.

Goal(s): Provide residents access to healthcare and preventive care.

BACKGROUND: The federal 340B drug pricing program provides access to reduced price prescription drugs to more than 10,000 health care facilities certified by the federal Department of Health and Human Services (HHS) as “covered entities.” Section 340B requires drug manufacturers whose drugs are covered by the Medicaid program to enter into an agreement with the secretary of HHS obligating the drug companies to comply with Section 340B. The San Mateo Medical Center (SMMC) is an eligible covered entity that in fact participates in the 340B program at a significant cost savings to the County and its patients. Because of the success of the program, the County is interested in pursing the possibility of extending the program to correctional health patients.

DISCUSSION: The SMMC, in conjunction with the Health Department and Correctional Health, have been meeting for several weeks to evaluate the feasibility and efficacy of extending the 340B pharmacy discount program to correctional health. Although seemingly advantageous on its face, in fact, doing so would be relatively novel, and extremely complex given the regulatory framework that governs 340B and hospitals in general. William von Oehsen, III, a partner in the Law Firm of Powers, Pyles, Sutter and Verville PC is a nationally-renowned expert in assisting public hospitals in 340B matters. He would assist and advise the County in its legal options under the complex regulatory framework. If the County determines that extending the 340B program to Correctional Health yields significant cost savings and can be established in accordance with federal and state law, then Mr. Von Oehsen will assist the County in preparing the appropriate documents and interfacing with federal regulatory agencies to the extent necessary to qualify the County for the additional 340B pricing.

FISCAL IMPACT: The agreement, as currently proposed, would pay the Law Firm of Powers, Pyles, Sutter and Verville PC, on a time and materials basis, with a cap of $20,000. This contract includes a termination clause allowing the Board to terminate the contract upon thirty days notice.