340B Drug Pricing Program Update

340B Drug Pricing Program Update
July 30, 2014
CDR Krista M. Pedley, Pharm.D., MS
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
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
• Federally Qualified Health
• Urban/638 Health Center
• Ryan White Programs
• Sexually Transmitted
• Title X Family Planning
Hospital Types
• Disproportionate Share
• Critical Access Hospitals
• Rural Referral Centers
• Sole Community
• Children’s Hospitals
• Free Standing Cancer
• Registration deadlines
340B Enrollment Steps
1. Determine Eligibility
2. Complete Online Registration during open
registration period
OPA notifies applicant of eligibility status
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
• 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
• All offsite outpatient facilities and subgrantee
sites are required to enroll and be listed on the
340B database
• 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
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).
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
Audits – HRSA conducted
• All covered entity types considered for risk-based audit
• Risk-based factors – length in program, number of outpatient facilities,
number of contract pharmacies, complexity of program, volume of
• 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
3. Audit Summary, public letter and corrective
action, once approved, posted on HRSA
4. Results support education of covered
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
• 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
• 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
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
[email protected]
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
[email protected]
Web: www.340bpvp.com
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