What is 340B? Why was it created? When was it created?
Created under Section 602 of the Veterans Health Care Act of 1992. Requires drug manufacturers participating in the Medicaid program to enter into an agreement with the Secretary of Health and Human Services to provide discounts on covered outpatient drugs purchased by specified government-supported facilities, called “covered entities”, that serve the nation's most vulnerable patient populations. Covered entities are free to negotiate even deeper discounts than the best price amount.
Who participates in the 340B program?
Covered entities include: certain high-volume disproportionate share hospitals (DSH's), as well as specified grantees of the Public Health Service, including certain federally qualified health centers (FQHCs), state operated drug assistance programs, the Ryan White CARE Act Title I, Title II, and Title III programs, tuberculosis, black lung, family planning and sexually transmitted disease clinics, hemophilia treatment centers, public housing primary care clinics, homeless clinics, Urban Indian Clinics and Native Hawaiian health centers.
To whom may the covered entity dispense drugs?
Section 340B prohibits the sale or transfer of discounted outpatient drugs to anyone other than a patient of the covered entity.
How do covered entities obtain the discounts?
Manufactures can't charge more than the 340B ceiling price regardless of whether the covered entity purchases pharmaceuticals through a wholesaler or directly from the manufacturer.
Billing restrictions?
Drugs purchased under Section 340B shall not be subject to both a 340B discount and a Medicaid rebate. The mechanism for complying with this provision is that covered entities submit their pharmacy Medicaid provider numbers to OPA which then submits them to state Medicaid agencies.
A ship-to-bill procedure may be used in which the covered entity purchases the drug, the manufacturer bills the covered entity for the drugs that it purchased but ships the drugs directly to the contract pharmacy.
Contract pharmacy MUST: provide the covered entity quarterly financial statements, a detailed status report of collections, and a summary of dispensing and receiving records.
Savings?
Pharmaceutical prices available under Section 340B are significantly lower than both retail and wholesale prices. Based on a recent analysis of 200 popular outpatient drugs, 340B prices are, on average, 54 percent lower than the average wholesale price (AWP). Another recent survey found 340B prices to be 24 percent lower than that available to group purchasing organizations. Hospital participants have experienced an average of over $2 million in savings annually
How do pharmacists get into it?
Basically a lot of paperwork (see p. 12 of the Massachusetts guide)
What are some pitfalls to watch out for?
How do pharmacies get reimbursed?
Clinics contracting with pharmacies
CHC's must address the following 2 issues: scope of project and mandate to deliver service regardless of one's ability to pay.
File change of request to address scope mandate: have to consider finances and whether they are obligated to provide free drugs, sound fiscal management, any payment policy may not be applied in a discriminatory manner
State 340B Payment Policies
Medicaid participation (“carve-in”) - if they decide to accept medicaid patients, they may only charge the acquisition price for the drug plus a reasonable dispensing fee
MassHealth can benefit from 340B pricing because 340B prices can be lower than the current prices Medicaid pays for the drug after the Medicaid rebate.
What a CHC Should Expect From a Pharmacy p. 8 agreement with the health center that the pharmacy will meet all of the requirements of Section 602 of the Veterans Health Care Act of 1992 and Section 340B of the Public Health Service Act. These include: ensuring that there is no diversion of drugs bought by the health
