April 2024
Volume 1, Issue 4
Inside this issue
Recent Manufacturer Restriction Changes
Senator Hints at Overhaul of the 340B Program
Selecting the Right TPA
Special points of interest
- Two new manufacturers adding restrictions to contract pharmacy program
- Senator hints at the possibility of a comprehensive overhaul of the 340B Drug Pricing Program passing through Congress as part of an end-of-year legislative package
- Breakdown of State bills being passed, cleared and introduced
- Key factors of choosing the right third-party administrator (TPA) for your 340B Program
HRSA Finalizes Administrative Dispute Resolution (ADR) Process
In a significant move aimed at enhancing transparency and efficiency in the 340B Program, the Health Resources and Services Administration (HRSA) has issued final regulations revamping the process for resolving disputes between 340B covered entities and drug manufacturers. The 340B program, established in 1992, requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations at significantly reduced prices.
The final regulations, published in the Federal Register, outline a structured process for handling disputes related to overcharging or other violations of the 340B program requirements. These regulations come after years of advocacy from various stakeholders seeking clarity and fairness in the resolution of disputes, which have sometimes been contentious and drawn-out affairs.
One of the key features of the new regulations is the establishment of a formal administrative process for handling disputes. Under this process, covered entities that believe they have been overcharged by drug manufacturers or that the manufacturers have violated other program requirements can file a complaint with HRSA. HRSA will then review the complaint and facilitate discussions between the parties involved in an attempt to reach a resolution.
If a resolution cannot be reached through these discussions, the regulations provide for a formal dispute resolution process, which includes the opportunity for a hearing before an administrative law judge. This structured approach is expected to provide greater clarity and fairness to both covered entities and manufacturers, ensuring that disputes are resolved in a timely and equitable manner.
Furthermore, the final regulations also include provisions aimed at promoting compliance with the 340B program requirements. For example, drug manufacturers are required to notify covered entities of any changes to their 340B pricing policies, ensuring that covered entities are aware of their rights and obligations under the program.
The issuance of these final regulations represents a significant milestone in the ongoing efforts to strengthen the 340B program and ensure its integrity and effectiveness. By providing a clear and structured process for resolving disputes, HRSA aims to foster greater trust and collaboration between covered entities and drug manufacturers, ultimately benefiting patients who rely on the 340B program to access affordable medications.
The final regulations issued by HRSA mark a positive step forward in the administration of the 340B Drug Pricing Program. By streamlining the process for resolving disputes and promoting compliance with program requirements, these regulations are poised to enhance transparency, fairness, and accountability within the program, ultimately benefiting patients and healthcare providers alike.
Recent Manufacturer Restriction Updates
As of April 1st, 2024, 32 drug manufacturers have implemented various contract pharmacy restrictions for covered entities within the 340B Pricing Program. In this recent update, several drugs were added to the current restrictions for AbbVie, Astellas, and Teva manufacturers. Two new manufacturers were also included, with formal letters to covered entities by Genentech and Sumitomo. Below is a breakdown of the letters that were sent:
AbbVie
Effective May 1st, 2024, Venclexta will be added to the current list of applicable products under AbbVie’s program integrity initiative.
Exception: Federal grantees, such as community health centers, federally qualified health centers, and Ryan White clinics, will be able to continue to place eligible bill-to/ship-to replenishment orders for their contract pharmacies.
Astellas
Effective May 1st, 2024, Myrbetriq (mirabegron) products will be added to their current list of applicable products under Astellas’ program integrity initiative.
Exceptions: Federal grantees are excluded from the policy and will remain eligible for direct delivery of Myrbetriq products. This will also not impact those covered entities in Arkansas and Louisiana.
To continue getting pricing, covered entities impacted and without an in-house pharmacy capable of dispensing 340B products will need to choose one single contract pharmacy location and designate said pharmacy by April 19th within 340B ESP.
Teva
Effective April 8th, 2024, Teva updated their list of products to include Alvaiz in their contract pharmacy policy under the 340B Program Integrity Initiative.
Exception: All federal grantee-covered entities are exempt from this policy.
Genentech
Effective May 1st, 2024, Genentech will limit 340B pricing on their portfolio of medicines that are adjudicated through a retail or specialty pharmacy except for Hemlibra and Evrysdi. They are encouraging voluntary submission of claims to support program transparency. A single contract pharmacy location registered in the HRSA database, designated by the covered entity or child site, in cases where the covered entity does not have an in-house pharmacy capable of dispensing 340B purchased drugs to its patients. To maintain pricing, these designations must be made through the 340B ESP platform by April 22nd.
Exception: There is no change for federal grantee covered entities.
Sumitomo
Effective May 1st, 2024, Sumitomo will provide the 340B price for APTIOM, GEMTESA, MYFEMBREE, and ORGOVYX brands exclusively to locations registered as a 340B covered entity as described below:
APTIOM, GEMTESA, and MYFEMBREE
If a covered entity does not have an in-house pharmacy capable of dispensing these products purchased at the 340B price, it may designate a single pharmacy within 40 miles of the parent site location.
ORGOVYX
Any covered entity without an in-house pharmacy capable of dispensing specialty products may also designate one specialty pharmacy within Sumitomo’s limited distribution network.
Wholly owned exception: contract pharmacies registered in the HRSA OPAIS database that are wholly owned by a 340B hospital or have common ownership with a health system may remain eligible. You must apply through the 340B ESP platform for their wholly owned application.
If a hospital-covered entity is granted an exemption, it may not also designate an independent contract pharmacy.
Exception: The policy does not apply to covered entities located in Louisiana or Arkansas, provided the covered entities in those states submit 340B claims data within 45 days of dispense for all their contract pharmacy relationships.
These changes will need to be made by April 19th to maintain 340B pricing.
As with all these changes, we recommend that each Covered Entity review its recent claims data to determine the best course of action before making any changes within the 340B ESP platform.
Senator Hints at the Possibility of Overhaul of the 340B Drug Pricing Program
Senator Jane Smith (R), a key figure in healthcare legislation, has hinted at the possibility of a comprehensive overhaul of the 340B Program passing through Congress as part of an end-of-year legislative package. The 340B program has been under scrutiny for years due to concerns about its complexity and oversight.
Senator Smith, who chairs the Senate Health Committee, has been vocal about addressing issues within the 340B program to ensure it operates efficiently and effectively. In a recent interview, she expressed optimism about the prospects of including 340B reforms in broader healthcare legislation expected to be taken up by Congress later this year.
"I believe there is growing bipartisan support for making meaningful reforms to the 340B program," Senator Smith stated. "It's a complex program that serves an important purpose, but it's clear that there are areas where improvements can be made to increase transparency, accountability, and ensure that the program is serving its intended beneficiaries."
The potential overhaul of the 340B program has been a topic of discussion among lawmakers, healthcare providers, and industry stakeholders for some time. Concerns have been raised about the lack of clarity in program requirements, inconsistent oversight, and reports of abuse, such as the alleged diversion of discounted drugs for profit.
Senator Smith emphasized the importance of striking the right balance between preserving the program's intent of helping underserved communities access affordable medications while addressing the concerns raised by various stakeholders.
"We need to ensure that the 340B program is working as intended and that it's benefiting the patients and communities it was designed to serve," Senator Smith remarked. "At the same time, we must also address the concerns raised by drug manufacturers and other stakeholders to create a fair and transparent system."
While the specifics of the proposed 340B overhaul are yet to be finalized, Senator Smith indicated that potential reforms could include measures to improve program integrity, enhance transparency in drug pricing, and strengthen oversight mechanisms.
The prospect of a comprehensive overhaul of the 340B program gaining traction in Congress comes amid broader efforts to address healthcare affordability and access issues. With healthcare remaining a top priority for lawmakers on both sides of the aisle, there appears to be growing momentum for bipartisan action to reform the 340B program and other aspects of the healthcare system.
As discussions around healthcare legislation continue to evolve, stakeholders will be closely watching for developments regarding the fate of the 340B program and the potential impact of any reforms on patients, providers, and pharmaceutical companies alike.
Current Status on State Bills and Laws that Prohibit Drugmaker 340B Contract Pharmacy Restrictions
Key factors of choosing the right third-party administrator (TPA)
Selecting the appropriate third-party administrator (TPA) is a critical decision for healthcare organizations participating in the 340B Drug Pricing Program. TPAs play a pivotal role in managing various aspects of the program, including compliance, data management, and administrative tasks. With numerous TPAs available in the market, choosing the right partner requires careful consideration and evaluation of several key factors.
Expertise and Experience: When evaluating TPAs, it's essential to assess their expertise and experience in managing 340B programs. Look for TPAs with a proven track record of success and a deep understanding of the complex regulations governing the program. Experience in working with similar healthcare organizations and familiarity with industry best practices can also be valuable indicators of a TPA's capabilities.
Comprehensive Services: A TPA should offer a comprehensive range of services tailored to meet the specific needs of your organization. This may include program enrollment, eligibility verification, inventory management, audit support, and compliance monitoring. Evaluate whether the TPA can provide end-to-end support to streamline the administration of your 340B program effectively.
Technology and Data Management: Robust technology infrastructure is crucial for efficient management of a 340B program. Choose a TPA that utilizes advanced software solutions for data management, reporting, and compliance tracking. The TPA should be able to provide real-time visibility into program performance and facilitate seamless integration with your organization's existing systems.
Compliance and Audit Support: Compliance with 340B program requirements is paramount to avoid penalties and ensure program integrity. A reputable TPA should have robust compliance protocols in place and offer comprehensive audit support to help your organization navigate audits and inspections successfully. This includes maintaining accurate records, conducting regular internal audits, and providing guidance on compliance issues.
Customer Support and Collaboration: Effective communication and collaboration are essential for a successful partnership with a TPA. Choose a provider that offers responsive customer support and is committed to working closely with your organization to address any concerns or issues that may arise. The TPA should be accessible and proactive in providing guidance and assistance as needed.
Cost and Value: While cost is an important consideration, it should not be the sole determining factor when selecting a TPA. Evaluate the overall value proposition offered by the provider, considering factors such as the quality of services, expertise, technology infrastructure, and compliance support. A TPA that delivers tangible benefits and helps optimize your 340B program's performance may justify a higher upfront investment.
Selecting the right Third-Party Administrator is a critical decision that can significantly impact the success of your organization's 340B program. By carefully evaluating TPAs based on their expertise, services, technology capabilities, compliance support, and overall value proposition, healthcare organizations can choose a partner that aligns with their needs and objectives, ultimately maximizing the benefits of the 340B program for their patients and communities.
ACI 340B Management
Our mission is to take the burden of the 340B program off you and your already taxed staff. “You manage your hospital, and we will manage your 340B program.”
Our experienced team supplements your staff by implementing, evaluating, and managing your 340B program while providing measurable benefits to you and your community. We understand the operations, regulations and technology required for program compliance.
ACI’s vendor-neutral approach ensures that your hospital will be matched with an administrator and technology vendor that best suits your hospital’s needs. Our team proactively monitors your program to catch problems before they happen. We are your ultimate 340B resource and are here to support your hospital in any way possible.