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The 340B Drug Pricing Program: The Basics

Paul Shank, MBAHealth & Human Services Consultant, Health Resources and Services AdministrationHealthcare Systems Bureau, Office of Pharmacy AffairsJuly 14, 2010

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340B Program

• Created by Congress in 1992 to lower the drug costs of safety net providers

• Legislative intent: to help safety net providers stretch their scarce tax dollars in order to provide more services and serve more vulnerable patients

• Administered by Office of Pharmacy Affairs (OPA) within the Health Resources and Services Administration (HRSA)

• Requires drug manufacturers participating in Medicaid and/or Medicare Part B to participate in the 340B Program.

2SNHPA www.snhpa.orgNRHA www.ruralhealthweb.org

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Registered Entities

OPA maintains databases of participating covered entity sites, manufacturers & contract pharmacies

As of June 2010:– 14,600 covered entities

– 870 manufacturers

– 3900 pharmacies

Over 800 hospitals currently enrolled – Some rural hospitals already participating as DSH’s

3SNHPA www.snhpa.orgNRHA www.ruralhealthweb.org

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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

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340B Entity Eligibility

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The eligibility to purchase at the 340B price belongs only to the entities

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340B Entity Eligibility

Consolidated Health Centers

Federally Qualified Health Center, or FQHC look-alikes

Family planning (Title X)

Ryan White Care Act (Parts A, B, C, D) grantees

Black lung clinics

Children’s Hospitals

Comprehensive hemophilia diagnostic treatment centers

Native Hawaiian health centers

Urban Indian organizations

Certified tuberculosis clinics

Certain disproportionate share hospitals (>11.75%)

Certified sexually transmitted disease clinics

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New Entities

Now eligible:• Free-standing children’s hospitals & free-

standing cancer hospitals that have Medicare DSH adjustment > 11.75%

• Sole community hospitals and rural referral centers that have Medicare DSH adjustment ≥ 8%

• Critical access hospitals (no DSH threshold)

SNHPA www.snhpa.orgNRHA www.ruralhealthweb.org

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340B Statute Requirements and Prohibitions

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340B Legislation

Program Components

Eligible Entities

Price Formula

Requirements & Prohibitions

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340B Statute Requirements and Prohibitions

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Audit Resell/Transfer

Prohibition

Duplicate Discount

Prohibition

Prime Vendor DisproportionateShare Hospital

GPO Exclusion

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340B Regulation and Policy.

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Federal Register Notice publication

www.hrsa.gov/opa

OFFICE OFPHARMACY AFFAIRS

Interpreting the legislation and

implementing the 340B Program

may at times be a challenge

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340B Program Resources.

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Integrity Access Value

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Integrity Resource:

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Integrity

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

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Access Resource:

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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

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Value Resource:

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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)

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Staying connected to the 340B World

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ASHP meetings June and DecemberAPHA meeting March340B Coalition meetings February and JulyAPhA Pharmacy TodayAccess For AllNetwork at various entity

specific meetings(NACHC, NAPH, Primary Care Associations, etc.)

SNHPA http://www.safetynetrx.org

HRSA http://www.hrsa.gov/opa/

PSSC http://pssc.aphanet.org/

Prime Vendor Program http://340bpvp.com

The MonitorList ServesOthers…

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Contacts:

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www.hrsa.gov/opa

pssc.aphanet.org

pssc@aphanet.org

1-800-628-6297

www.340bpvp.com

340B_primevendor@340bpvp.com

1-888-340-2787

OFFICE OFPHARMACY AFFAIRS

Pharmacy Services Support Center

Prime Vendor Program

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Thank You!