340B Drug Pricing Program Update July 30, 2014 CDR Krista M. Pedley, Pharm.D., MS Director U.S. Department of Health and Human Services Health Resources and Services Administration Healthcare Systems Bureau Office of Pharmacy Affairs Intent of the 340B Program Permits eligible safety net providers “to stretch scarce Federal Resources as far as possible, reaching more eligible patients and providing more comprehensive services.” H.R. Rep. No. 102-384(II), at 12 (1992) 340B Program: Overview • Authorized by the Veterans Health Care Act of 1992 and is administered by the Health Resources and Services Administration (HRSA). • Provides discounts on covered outpatient drugs to certain safety-net covered entities - Average savings of 25-50% • Manufacturers participating in Medicaid agree to charge covered entities a price that will not exceed the 340B “ceiling price”. • The “ceiling price” is calculated based on data obtained from the Centers for Medicare & Medicaid Services (CMS). 340B Program Benefits • Covered entities benefit when the covered entity is able to bill the patient’s insurer (if insured) at a negotiated rate that is higher than the 340B price paid to obtain the drug. • HRSA has no statutory authority to dictate how entities use the savings generated by the 340B program. • Currently, we have 11,000 participating covered entities with 15,000 associated sites. • Less than 5,000 covered entities have arrangements with 15,000 contract pharmacy locations. Eligible Entities Federal Grantees • Comprehensive Hemophilia Treatment Centers • Federally Qualified Health Centers • Urban/638 Health Center • Ryan White Programs • Sexually Transmitted Disease/Tuberculosis • Title X Family Planning Hospital Types • Disproportionate Share Hospitals • Critical Access Hospitals • Rural Referral Centers • Sole Community Hospitals • Children’s Hospitals • Free Standing Cancer Hospitals Registration • Registration deadlines 340B Enrollment Steps 1. Determine Eligibility 2. Complete Online Registration during open registration period OPA notifies applicant of eligibility status http://opanet.hrsa.gov/opa/Default.aspx 3. OPA verifies eligibility either by contacting State grantee or Federal Project Officer 4. Await Decision From OPA 340B Database • Entities are not eligible for the program unless listed in the 340B database • Entities are required to keep their information up to date on the database and ensure sites are properly listed • Includes the Medicaid Exclusion File Requirements • It is a covered entity’s responsibility to immediately inform HRSA of a change in eligibility status – entity should stop purchasing • Entities should also report non-compliance to HRSA • All offsite outpatient facilities and subgrantee sites are required to enroll and be listed on the 340B database Diversion • A 340B drug is provided to an individual who is not a patient of that entity • Required to follow patient definition guidelines 61 Fed. Reg. 55156 (October 24, 1996) • For ADAPs: an individual is considered a patient if they are registered as eligible by the ADAP 12 Duplicate Discounts • Duplicate Discount = Accessing the 340B Discount and Medicaid Rebate on same drug • Safety-net providers required to inform HRSA • HRSA maintains this list known as the Medicaid Exclusion File on HRSA’s public website • HRSA provides guidance to covered entities and states “Final Notice, Duplicate Discounts and Rebates on Drug Purchases published at 58 Fed. Reg. 34058 (June 23, 1993). 13 ADAP Requirement • ADAPs cannot receive a 340B rebate on a drug that was already purchased at the 340B price by another 340B covered entity • ADAPs should work with other covered entities to ensure compliance with this requirement Audits – HRSA conducted • All covered entity types considered for risk-based audit selection • Risk-based factors – length in program, number of outpatient facilities, number of contract pharmacies, complexity of program, volume of purchase • Target audits – focus on specific allegation • Conducted by HRSA regional staff • One pager on audit process available at http://www.hrsa.gov/opa - Program Integrity page On-site Process • Audit Focus Areas: • Eligibility status • Policies and procedures – procurement, inventory, distribution, dispensing, billing • Internal controls • Policies, procedures, & records – Diversion • Procurement & distribution – duplicate discount • Sampling • Include contract pharmacy arrangements HRSA Audit: Next Steps 1. HRSA Notice and Hearing; entity has 30 days to disagree with report 2. 60 days to submit corrective action plan*; *If no corrective action plan within 60 days of final report, entity terminated 3. Audit Summary, public letter and corrective action, once approved, posted on HRSA website 4. Results support education of covered entities HRSA Audits of entities • Conducted 218 audits of covered entities over the past three fiscal years to date, encompassing over 2100 outpatient facilities/subgrantees and over 6100 contract pharmacy sites • FY12 audits have been finalized and posted on our website. and there were findings in all areas of program compliance. • FY 15 – plan to double the number of audits we conduct Audits – Manufacturer conducted • Authority • Reasonable cause • Independent auditor • Submit audit workplan to OPA prior to conducting • OPA encourages manufacturers to submit plans and we will work closely with them throughout the process Audits – Manufacturer conducted • HRSA has approved 9 audit workplans • Reports are being analyzed • Encourage manufacturers to share lessons learned Annual Recertification • Required by Statute • ADAP recertification - January 2015 • Ensure program integrity, compliance, transparency and accountability • Ensure accuracy of covered entity information in the 340B database • It is the covered entity’s responsibility to ensure the accuracy of the information in the 340B database • Entities must self-disclose programmatic violations 340B Peer-to-Peer Program • High performing 340B entities (peer mentors) selected by HRSA - provide practical examples of 340B integrity and quality that serve as a resource for other entities • Webinars held twice monthly (2nd and last Wednesday of each month) - topics presented by peer mentors – Available for free to all 340B stakeholders – Webinar Registration information: OPA website (www.hrsa.gov/opa), Apexus website (www.340bpvp.com), HealthcareCommunities.org and the ‘340B Resource Network’ group on LinkedIn • Upcoming webinar topics include: Evaluating contract pharmacy transaction reports & 340B billing systems 340B Resources HRSA Prime Vendor Program (PVP) • • • • • • • • Contract with Apexus No cost to participate www.340bpvp.com ApexusAnswers@340bpvp.com 340B University – educational opportunity Drug price negotiation services Multiple wholesale distributor agreements Favorable discounts on other pharmacy related products/service Contact Information Office of Pharmacy Affairs (OPA) Phone: 301-594-4353 Web: www.hrsa.gov/opa Prime Vendor Program (PVP) Phone: 1-888-340-2787 ApexusAnswers@340bpvp.com Web: www.340bpvp.com