The 340B Drug Pricing Program: The Basics

INTEGRITY ● ACCESS ● VALUE 1

The 340B Drug Pricing Program: The Basics

Paul ShankHealth & Human Services Consultant, Health Resources and Services AdministrationHealthcare Systems Bureau, Office of Pharmacy AffairsNorth Carolina Hospital AssociationAugust 26, 2010


Learning Objectives

Intent of the program

1

340B Pricing determination

2

Entity eligibility

3

Entity enrollment procedure

4Program

requirements and

prohibitions

5

Program guidance and policy

6

Patient eligibility

determination

7

Drug delivery options

8

Available resources

9


Intent of the 340B Program

Patients340B Eligible Entities

Safety net providers

SAVINGS

Improve financial stability

Stretch dollars to

serve vulnerable patients


The 340B Price

Drug Manufacturers

The 340B price is actually a “ceiling” price

25-50% of the average wholesale

price

DRUG PRICING PROGRAM

340B

Can offer sub-ceiling prices


340B Entity Eligibility

The eligibility to

purchase at the 340B

price belongs only to

the entities


340B Enrollment Procedure

DEADLINES

participation begins 1 month after the enrollment deadline

FIND THE FORM

COMPLETE THE FORM

http://www.hrsa.gov/opa/legalresources.htm

Click on “Introduction to 340B”


340B Statute Requirements and Prohibitions

Audit Resell/Transfer

Prohibition

Duplicate Discount

Prohibition

Prime Vendor DisproportionateShare Hospital

GPO Exclusion


340B Regulation and Policy

Federal Register Notice publication

www.hrsa.gov/opa/federalregister.htm

OFFICE OFPHARMACY AFFAIRS

Definition of a Patient

entity has established relationship & maintains records of care

1

3 patient receives health care consistent with range of services from the covered entity

2 patient receives health care services from health care professional employed/contracted with entity

INTEGRITY ● ACCESS ● VALUE

CAH Pre-registration Checklist

Step 1. Verify EligibilityStep 2. Identify 340B eligible out-patient settings and

services where 340B drugs will/may be used. Step 3. Evaluate medication use trends for all 340B eligible

out-patient settings to determine financial impact.Step 4. Determine if 340B medications will be used for

Medicaid patients.Step 5. Consider pharmacy service model and operational

systems.Step 6. Consider 340B PVP participation by visiting:

https://www.340bpvp.com/public/Step 7. Complete 340B Registration Forms found at

https://opanet.hrsa.gov/OPA/Registration/RegistrationMain.aspx Step 8. Request Free Technical Assistance for

implementation!Contact PSSC with any questions (1-800-628-6297 or

[email protected]).

9


340B Implementation Options

340B Eligible Entities

Alternative Methods Demonstration Projects

www.hrsa.gov/opa/alternativemethods.htm

OFFICE OFPHARMACY AFFAIRS


Integrity

Integrity Resource:

Develops innovative pharmacy

service models and supports

technical assistance

Serves as Federal resource

for pharmacy practice

Administers 340B program

• Access to affordable drugs

• Application of “best practices”

Office of Pharmacy Affairs (OPA)

• Efficient pharmacy management

• Systems to improve patient outcome

Importance of Comprehensive Pharmacy Services


Access Resource:

Helps eligible entities,

implement and optimize the

340B program

Providesinformation resources,

policy analysis &education

Access

Pharmacy Services Support Center (PSSC)

• Call Center

• Web Site

• Outreach Program

• Pharmacy Technical Assistance Program

Operates


Value Resource:

Offers value added products

and services

Offered at no cost to entity

Negotiates sub-ceiling prices

Helps with access to drug

distribution solutions

Value

Prime Vendor Program (PVP)


340B & Medicaid: Avoiding Duplicate Discounts

Duplicate Discounts on 340B Drugs


Duplicate Discounts on 340B Drugs

When does a duplicate discount occur?

Purchased with an up-front 340B discount

Credited with a back-end transaction Medicaid rebate

And

A duplicate discount occurs when the same drug is:


340B EnrollmentForm

A 340B covered entity is required to indicate on the 340B Enrollment Form if it intends to bill Medicaid for Drugs purchased at 340B prices.


Billing Medicaid

• “If a drug is purchase by or on behalf of a Medicaid beneficiary, the amount billed may not exceed the entity’s actual acquisition cost for the drug, as charged by the manufacturer at a price consistent with the Veterans Health Care Act of 1992, plus a reasonable dispensing fee established by the State Medicaid agency.”

– ftp//ftp.hrsa.gov/bphc/pdf/opa/FR05131994.pdf, pg. 25112


Time for a Poll!

Do you currently have an outpatient/retail pharmacy?


An Overview

•The desire to increase patient access to affordable medications.

•Entity contracts with one pharmacy per site.•Entity purchases and owns the medications.•The contract pharmacy provides

professional, administrative, and clerical services.

•Detailed receiving/dispensing records.•Diversion prevention tracking system.


Implementation

•Form a Pharmacy Project Team.

•Establish Project mission and philosophy.

•Complete 340B Program application.

•Complete pharmacy needs assessment.

–Should you consider an outside pharmacy management vendor?

•Evaluate potential contract pharmacies.

–RFP if needed


Time for a Poll!

Do you have space, expertise, and resources to build a retail pharmacy in your facility?


Implementation: Evaluating the Pharmacy

• Consider the importance of comprehensive pharmacy services as an integral component of primary health care.

• Comprehensive pharmacy services include patient access to affordable pharmaceuticals, application of "best practices" and efficient pharmacy management and the application of systems that improve patient outcomes through safe and effective medication use.

• How will your contract pharmacy meet your needs for comprehensive pharmacy services?


Time for a Poll!

Do you have a pharmacy in your area that could be contracted to dispense 340B drugs?


Implementation

•Select a wholesaler.

•Sign Prime Vendor Program agreement.

•Develop an audit plan.

•Develop a formulary system.

•Develop a Policy and Procedures Manual.

•Choose pharmacy, negotiate contract, submit the Self-certification Form. (ftp://ftp.hrsa.gov/bphc/pdf/opa/CPSelfCert.pdf)


“The Flow”Entity Wholesaler Contract Pharmacy Patient

Money Flow

Collects:- Payments collected by pharmacy

Collects:- Money from entity

Collects:- A per prescription dispensing fee from entity- Patient payments- 3rd party reimbursement on behalf of entity

Pays:- Wholesaler for drugs-Contract pharmacy a per prescription dispensing fee-Admin fees as negotiated

Pays:- Collections due to the entity

Pays:- Pharmacy amount due for prescription as determined by entity

Drug Flow

- Opens account with wholesaler as a bill to ship to arrangement

- Delivers drugs to contract pharmacy

- Dispenses drugs to patients- Manages and stores drug inventory owned by entity- Often orders drugs on entity’s behalf

- Receives drugs from contract pharmacy


The Patient Safety & Clinical Pharmacy ServicesCollaborative (PSPC) 2.0

• The mission of this Collaborative is to advance the delivery of world class care by spreading the integration of clinical pharmacy services and patient safety principles to improve health outcomes in safety-net populations.

• HRSA invites you to form a team with other health care organizations in your community to take part in this exciting and unprecedented opportunity!

• The PSPC Participation Package is NOW available at www.hrsa.gov/patientsafety.

• Don’t delay, the deadline to submit a completed Participation Packages is July 31, 2009!


What if?

•What if we would like to have more than one contract pharmacy per site?

•What if we have an in-house pharmacy that we would like to supplement?

•What if…..?


Medicaid, Medicare & Third-Party Payers

How does 340B work with these various payers?


Time for a Poll!

What is your OUTPATIENT Medicaid volume?


Time for a Poll!

What is your Medicaid MCO volume for Medicaid patients?


Time for a Poll!

What is your OUTPATIENT Medicare volume?


Help!

Health Resources and Services Administration Pharmacy Services Support Center at

American Pharmacists Association

PSSC Call Center: (202) 429-7518

Or(800) 628-6297

Email: [email protected]

The 340B Drug Pricing Program: The Basics

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