The 340B Drug Pricing Program: The Basics

1. The 340B Drug Pricing Program: The Basics Paul Shank Health & Human Services Consultant, Health Resources and Services Administration Healthcare Systems Bureau, Office of Pharmacy Affairs North Carolina Hospital Association August 26, 2010

2. Learning Objectives Intent of the program 340B Pricing determination Entity eligibility 1 2 3 Entity enrollment procedure Program requirements and prohibitions Program guidance and policy 4 5 6 Patient eligibility determination Drug delivery options Available resources 7 8 9

3. Safety net providers 340B Eligible Entities Patients Intent of the 340B Program SAVINGS Improve financial stability Stretch dollars to serve vulnerable patients

4. The 340B Price 340B The 340B price is actually a “ceiling” price DRUG PRICING PROGRAM Drug Manufacturers 25-50% of the average wholesale price Can offer sub-ceiling prices

5. 340B Entity Eligibility The eligibility to purchase at the 340B price belongs only to the entities

6. 340B Enrollment Procedure http://www.hrsa.gov/opa/legalresources.htm Click on “Introduction to 340B” FIND THE FORM COMPLETE THE FORM DEADLINES participation begins 1 month after the enrollment deadline

7. Audit Resell/Transfer Prohibition Duplicate Discount Prohibition Disproportionate Share Hospital GPO Exclusion Prime Vendor 340B Statute Requirements and Prohibitions

8. Federal Register Notice publication OFFICE OFPHARMACY AFFAIRS entity has established relationship & maintains records of care 1 patient receives health care services from health care professional employed/contracted with entity 2 Definition of a Patient patient receives health care consistent with range of services from the covered entity 3 340B Regulation and Policy www.hrsa.gov/opa/federalregister.htm

9. CAH Pre-registration Checklist • Step 1. Verify Eligibility • Step 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 pssc@aphanet.org).

10. 340B Implementation Options OFFICE OFPHARMACY AFFAIRS Alternative Methods Demonstration Projects www.hrsa.gov/opa/alternativemethods.htm 340B Eligible Entities

11. Integrity Importance of Comprehensive Pharmacy Services Integrity Resource: Office of Pharmacy Affairs (OPA) 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” • Efficient pharmacy management • Systems to improve patient outcome

12. Operates Access Resource: Pharmacy Services Support Center (PSSC) Helps eligible entities, implement and optimize the 340B program • Provides • information resources, • policy analysis & • education Access • Call Center • Web Site • Outreach Program • Pharmacy Technical Assistance Program

13. Value Resource: Prime Vendor Program (PVP) Negotiates sub-ceiling prices Helps with access to drug distribution solutions Offers value added products and services Offered at no cost to entity Value

14. Duplicate Discounts on 340B Drugs 340B & Medicaid: Avoiding Duplicate Discounts

15. Duplicate Discounts on 340B Drugs • When does a duplicate discount occur? A duplicate discount occurs when the same drug is: Purchased with an up-front 340B discount Credited with a back-end transaction Medicaid rebate And

16. 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.

17. 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

18. Time for a Poll! • Do you currently have an outpatient/retail pharmacy?

19. 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.

20. 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

21. Time for a Poll! • Do you have space, expertise, and resources to build a retail pharmacy in your facility?

22. 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?

23. Time for a Poll! • Do you have a pharmacy in your area that could be contracted to dispense 340B drugs?

24. 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)

25. “The Flow”

26. 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! 

27. 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…..?

28. Medicaid, Medicare & Third-Party Payers • How does 340B work with these various payers?

29. Time for a Poll! • What is your OUTPATIENT Medicaid volume?

30. Time for a Poll! • What is your Medicaid MCO volume for Medicaid patients?

31. Time for a Poll! • What is your OUTPATIENT Medicare volume?

32. Help! • Health Resources and Services Administration Pharmacy Services Support Center atAmerican Pharmacists Association • PSSC Call Center: • (202) 429-7518 • Or • (800) 628-6297 Email: pssc@aphanet.org