340B Pharmacy Update. Wesley R. Butler

Transcription

1 HCCA Mid Central Regional Annual Conference 340B Pharmacy Update Wesley R. Butler

2 Introduction Caveat This presentation is intended as an overview of a complex area of law and should not be construed as, or relied upon, as legal advice. Take Away Advice: Become familiar with the Guidance Focus on analysis, not answers Don t hesitate to ask for help PSSC SNHPA 2

3 Overview The Past History, Policy and Purpose The Present Compliance Issues Diversion Double-dipping and Medicaid Rebates Cherry-picking pharmaceuticals Reimbursement The Future Network contract pharmacies Manufacturer audits and appeals 3

4 History Section 602 of the Veterans Health Care Act of 1992 created Section 340B of the Public Health Service Act (42 USC 256b) Implementation of 340B Program given to Office of Drug Pricing (now Office of Pharmacy Affairs), within Bureau of Primary Health Care, within HRSA, within DHHS Basic elements of 340B Program largely unchanged, except for recent expansion efforts Contours of 340B Program defined by HRSA Guidance The 340B Program very much a work-in-process 4

5 Policy and Purpose Provides discounts on outpatient drugs for certain safety-net covered entities Not a reimbursement program Purpose is to allow safety-net covered entities to apply savings to improve or expand patient services Pharmaceutical manufacturers that participate in Medicaid must also participate in the 340B Program 340B drug purchases approached $6 billion in B savings may be as high as 50% of AWP 5

6 Compliance Issues and General Considerations Why should I worry about 340B? (Unclear Rules) x (Complex Rx Operations) x (Substantial Dollars) = Risk Enforcement? Not much at present by OPA, HHS-OIG, CMS or others Increased audit and challenge activity by Rx Manufacturers Greatest consequences? Suspension from the 340B Program CMP for knowing/intentional violations (42 USC 256b(d)(2)(B)(v)(I)) Repayment of discount (42 USC 256b(a)(5)(D)) False claim liability 6

7 Diversion Prohibits the resale or transfer of drugs purchased under the 340B Program to a person who is not a patient of the covered entity (42 USC 256b(a)(5)(B)) Definition of Patient under 340B HRSA s Three-Part Definition Test Third Prong does not apply to DSH hospitals What does it take to establish a relationship? In process for revision 7

8 Diversion (Cont.) Resale or transfer to non-patients may violate HRSA s patient definition requirement and the Prescription Drug Marketing Act of case Physician civil settlement with DOJ for $565, case $2.3 million finding of liability against a DSH hospital Inventory Management Effective tracking processes separating 340B from non-340b Replenishment models require accurate NDC-to-NDC match 8

9 Double-Dipping and Medicaid Rebates Although the 340B Program is essentially a price control, Congress sought to assure that dispensed drugs would not be subject to both the discounted 340B price and a Medicaid rebate. Rx Mfr 340B CE Medicaid 9

10 Double-Dipping and Medicaid Rebates (Cont.) Cannot bill Medicaid for a 340B drug for which Medicaid then seeks a rebate from the Rx manufacturer Operational Fixes? Medicaid carve outs (State should seek rebate) 340B pass through (State should not seek rebate) Does Medicaid really expect us to capture and submit the NDC? What about Medicaid managed care? 10

11 Cherry-Picking If a drug is used on an outpatient, OPA expects that the drug will be purchased under 340B CE cannot choose 340B drugs for some patients and non-340b drugs for others This includes underwater drugs where the 340B price is actually higher than the contract price Is this operationally feasible 100% of the time? What about drug shortages? Orphan drugs? 11

12 The Future Network contract pharmacies may expand the effect of the 340B Program but it also expands the risks of compliance New Patient definition guidance may be forthcoming Increased Rx manufacturer audits and payback demands Medicaid MCOs, PBMs and others want access to the 340B discount 12

13 Thank you Questions? Wes Butler T