340b and your organization
DESCRIPTION
340B AND YOUR ORGANIZATION. Fungisai Nota, PhD. * Andrew Welsh Andrew Lofurno AIDS Care Group Ryan white all titles meeting, Washington dc November 27 th -29 th , 2012 *Contact Information: [email protected]. 340B Program Evolution. Creation of the 340B Program. - PowerPoint PPT PresentationTRANSCRIPT
FUNGISAI NOTA, PHD. *ANDREW WELSH
ANDREW LOFURNO
AIDS CARE GROUP
RYAN WHITE ALL TITLES MEETING, WASHINGTON DC
NOVEMBER 27 T H -29 T H , 2012
* C O N TA C T I N F O R M AT I O N : F N O TA @ A I D S C A R E G R O U P. O R G
340B AND YOUR ORGANIZATION
340B Background
340B Program Evolution
1992340B Statute
19931st Guidelines
1996 Contract Pharmacy,PatientDefinition
2004Vendors
2010 Affordable Care Act
1st Proposed Regulations
Creation of the 340B Program
Certain safety net covered entities
Outpatient drugs
Price discountsRequired for all
manufacturers in Medicaid
340B Progra
m
Intent of the 340B Program
Stretch scarce federal resources1
Reach more eligible patients1
Provide more
comprehensive services1
Reduce price of
pharmaceuticals for
patients
Expand services
offered to patients
Provide services to more patients
1. HR Rep No. 102–384, pt 2, at 12 (1992).
Patient Definition
340B Eligible Entities
* 340B eligible through Section 7101 of the Affordable Care Act
Hospital Eligibility Criteria
*340B eligible through Section 7101 of the Affordable Care Act
Hospital Outpatient Facilities
In order for outpatient facilities to become eligible for the 340B Program:
The outpatient facility must be an integral part of the hospital
The outpatient facility must be included as reimbursable on the covered entity’s most recently filed Medicare Cost Report
To register additional outpatient facilities, complete the online Register an Outpatient Facility registration at: http://opanet.hrsa.gov/OPA/CERegister.aspx
340B Enrollment Procedure
http://opanet.hrsa.gov/OPA/CERegister.aspx
340B Implementation
1. History of 340B
2. The Intent of 340B Program
3. Who is eligible
4. Key dates
Part 1 - Summary
340B Prohibitions and Requirements
340B Covered Drugs
340B Prohibitions and Requirements
Duplicate Discount
s
Diversion
Duplicate Discount on 340B Drugs
Examples of Duplicate Discounts
Examples of Duplicate DiscountsCont’d
1. CMS. Letter re: medication prescription drug rebates. April 22, 2010. Available at: www.ncsl.org/documents/health/42210PPACADrug_Rebate_ SMD.pdf. Accessed November 22, 2011.
Billing Medicaid
Medicaid Exclusion File and 340B Contract Pharmacies
The Medicaid Exclusion File
CE Decision to Use 340B DrugsCarve-In
CE Responsibilities for Avoiding Duplicate Discounts
It is ultimately the responsibility of the 340B participating entity to ensure accurate reporting of Medicaid billing of any 340B drugs to OPA and the state
Medicaid agency.
Avoiding Duplicate Discounts
Diversion Prohibition
GPO Exclusion
The Orphan Drug Exclusion
The Orphan Drug Product Designation Database can be found at: http://www.accessdata.fda.gov/scripts/opdlisting/oopd/index.cfm
Part 2 - Summary
1. Determining which drugs are covered under 340B
2. Diversion / Exclusion / Duplicate discounts 3. Carving – in or Carving - out Medicaid4. GPOs and Orphan drugs
OPTIMIZING YOUR 340B PROGRAM
340B Prime Vendor Program
PVP Mission and GoalsImprove access to affordable medications for
covered entities and their patientsPrimary goals:
Lower participants’ supply costs by expanding the current PVP portfolio of sub-340B priced products
Provide covered entities with access to efficient drug distribution solutions to meet their patients’ needs
Provide access to other value added products and services meeting covered entities’ unique needs
Estimated Prices For Selected Public Purchasers as a Percent of AWP
Stephen Schondelmeyer, PRIME Institute, University of Minnesota (2001)
100.0%
80.0%
67.9%
60.5%
51.7%
49.0%
47.9%
34.6%
0% 20% 40% 60% 80% 100%
AWP
AMP
Medicaid (Min.)
Medicaid Net
FSS
340B
FCP
VA Contract
Private Sector Pricing
The 340B Price
25%–50% of the average wholesale price
Drug Manufacturers
Drug Pricing Program
340B
The 340B price is actually considered a “ceiling” price
Can offer sub-ceiling prices
Benefits of PVP to Participants
Ease of enrollment and activation of pricing by wholesaler
Access to 340B sub-ceiling prices for covered drugs
Access to discounts on other value added outpatient products such as vaccines and diabetic supplies
Participant communications Support of DSHs and HRSA grantees by funding
340B education and networking opportunities
Value of PVP to Participants
Savings - average sub-ceiling savings on PVP contract purchases for all participants = 16% in 2007
Diminishes the need for Independent Sub-Ceiling contracts and the resources that they require to manage
Provides a “One Stop Shopping” model for outpatient pharmacy services such as 340B split-billing software
Access to lowest priced vaccines in the marketplace
Access to market reports to help cut formulary costs
Cost Savings Analysis Summary
Current Annualized Purchases = $538,576Projected Annualized Purchases if the participant
takes advantage of all categories of savings (1:1, generic exchange, and therapeutic exchange = $331,131
Annualized Savings of $205,455Percent Savings of 38% This analysis was for a FQHC switching from a
GPO Model to a 340B plus Prime Vendor Model
Supplier Agreements Allendale Pharmaceutical Alliant Pharmaceuticals AMO (pending) Astra-Zeneca Pharmaceuticals Abraxis Pharmaceutical Akorn Inc. ASD (flu vaccine) Bayer Diagnostics Bedford Labs Can-am Care LLC Caraco Pharmaceutical Labs Cytogen Dabur Pharmaceuticals FFF (flu vaccine) G&W Laboratories Geritrex Corporation GlaxoSmithKline Hawthorne Pharmaceuticals, Inc Home Diagnostics Inc. Early Detect Lilly & Company
Major Pharmaceuticals Medicure Morton Grove Pharm Inc. NitroMed Inc. Novartis Vaccines Novo Nordisk Okomoto USA Inc. Organon USA, Inc. Paddock Labs RD Plastics Co Inc. Rx Elite Holdings, Inc. Sandoz Pharmaceutical Teva Health Systems Total Pharmacy Supply Tri State Distribution Stratus Pharmaceuticals Trinity Biotech X-Gen Pharmaceuticals Watson Pharma Inc. Wyeth Pharmaceuticals
Other Products and Services
Vaccines PAP software Split billing software Auditing/overcharge recovery services Repackaging services Prescription vials/labels/printer cartridges Diabetic/TB syringes PBM services OTC diagnostic test kits HIV rapid test kits Pharmacy automation/technology
Manufacturers & 340B Pricing
Must provide 340B pricing if their drug(s) is covered by Medicaid
Cannot sell covered drug above 340B ceiling price to covered entity
Are not prohibited from selling outpatient drugs at below 340B ceiling price
Prices offered covered entities are exempt from “best price” but not Non-FAMP calculation
Are not required to offer sub-ceiling price to other covered entities or Medicaid
Can obtain Non-FAMP pricing exemption for sub-ceiling pricing through HRSA’s 340B Prime Vendor Program
Manufacturers – 340B Pricing and Medicaid Rebate Programs
Medicaid and 340B entities receive prices based on either “Best Price” OR Average Manufacturer Price (AMP) – 15.1% for branded drugs
Additional discounts are applied if price increases exceed the Consumer Prime Index (CPI)
Generics – AMP minus 11% “Best Price” is not part of generic calculationPricing - recalculated quarterlyDiscounts are upfront. No backend rebates
PRIME VENDOR CONTRACTING
• Contract methodology- build upon existing supplier
relationships- new supplier contracting- savings vs. revenue- target high dollar/ proprietary drugs- negotiations vs. bidding on select drug
classes- value added products and services
Positive (+) Negative (- )
Entity pays flat fee per claim Stop-loss function (prevents
3rd party transmission is loss to entity)
Entity does not pay fees on claim reversals
Entity pays lowest of U&U, MAC, and 340B
Entity pays fees based on % of revenue or drug cost
Entity does not keep Medicaid/3rd party reimbursement
Vendor recruits patients to its mail order pharmacy
Early cancellation fees Entity not allowed to select
wholesaler Entity might end may end up
purchasing partial bottles at high rates due to non-replenishment
CHOOSING A CONTRACT PHARMACY
Part 3 - Summary
1. Understanding PVP
2. Expected gains from joining the PVP
3. Choosing contract pharmacies
340B POLICIES
Guidelines Regulations (proposed)
• Patient Definition*• Contract Pharmacy*• Audits*• Dispute Resolution*• Outpatient Facilities• Duplicate Discounts
Manufacturer Civil Monetary Penalties
Administrative Dispute Resolution
Orphan Drugs
340B Policies
340B Guidance and Policy
http://www.hrsa.gov/opa/federalregister.htm
340B Proposed Regulations
Drug Delivery Contract Pharmacies
340B Usage Considerations
340B Program Support
Office of Pharmacy Affairs (OPA)
340B Program Integrity Resource
340B Program Integrity Resource
Functions of OPA
Clinically and Cost-EffectivePharmacy Services
MAKING 340B PROGRAM WORK
1. Maintain updated records on OPA website.2. Choose your contact pharmacy wisely3. Conduct regular internal audits4. Devote adequate quality personnel for 340b5. Develop and update your organization’s
340B standard operating procedures (SOPs)6. If you deliver the medication – combine it
with case management to increase adherence
GETTING READY FOR AN AUDIT
Have Policies and Procedures- do not create them for the purpose of the audit- detail entire process
Be proactive- get information to the auditor when requested in an easily
digestible format Audit Now
- trace clinically significant encounters monthly- involve social workers, patient financial services, and medical
records. Understand state Medicaid managed care
- get to know your Medicaid office that processes claims for your entity Stand your ground with C-suite, do not be pressured into risky
practices.
QUESTIONS
MAIN SOURCES USED
OPAHRSAAPEXUS – 340B PVP