Navigating 340B - A Supply Chain Primer

A Guide for Supply Chain Professionals to Support Pharmacy in Eligible 340B Programs

July 07, 2016 | Content Areas: Strategic Planning | Tags: Cost Management, Pharmacy, Regulatory | Formats: White Paper
Authors: Ray Moore, MBA, CMRP, FAHRMM

Ray Moore, MBA, CMRP, FAHRMM
Contracts Manager Lead, Supply Chain
PeaceHealth
Vancouver, WA

Abstract

The purpose of this white paper is to prepare Supply Chain professionals to better understand how to support navigating some of the risks and opportunities inherent in participating in the 340B Drug Discount Program. Pharmacy and Finance need to be most familiar with the details of participation and compliancy, but Supply Chain professionals are also increasingly being expected to support an organization’s engagement in the program. This increased expectation is arising not only from growing responsibility for Pharmacy’s Supply Chain, but also due to products that Supply Chain may be ordering or managing that need to be accounted for under the program in order to remain compliant. The 340B program is a discount pricing program derived from Section 340B of the Public Service Act that allows eligible health care providers access to preferential pricing for eligible medications. Savings can be significant. 340B program participants can realize 20-50% off their existing drug costs. However, navigating the full extent of opportunities and managing the risks can be complicated as the program has continued to evolve since its inception, and eligibility criteria and compliance requirements are subject to change. Developing policy on defining eligibility, eligible entities (Covered Entities), eligible patients, and eligible medications is crucial in supporting an organization’s consistency in how to interpret and act on required criteria, thus helping an organization avoid risk for potential disqualification from the program. Even with these complexities, careful planning and management the 340B Drug Discount Program can yield significant value to organizations that qualify.

Acronym Definitions

  • AMP – Average Manufacturer Price: AMP is the average unit price paid to manufacturers by wholesalers for drugs distributed to retail pharmacy class of trade. 
  • DSH – Disproportionate Share Hospitals: Disproportionate share hospitals are those that have a DSH adjustment percentage greater than 11.75%, calculated as the sum of percentage of Medicare inpatient days and the percentage of total patient days attributable to patients eligible for Medicaid but not eligible for Medicare Part A.
  • FDA – U.S. Food and Drug Administration: The FDA is a federal agency responsible for regulating food safety, tobacco products, dietary supplements, pharmaceuticals, blood, medical devices, and veterinary products.
  • GPO – Group Purchasing Organization: A GPO is an organization that leverages the collective buying power of its members to obtain discounts from vendors.
  • HRSA – Health Resources and Services Administration: HRSA is the primary federal agency for improving access to health care services for people who are uninsured, geographically isolated, or medically vulnerable.

 

The purpose of this white paper is to help prepare Supply Chain professionals to better understand how to support navigating risks and opportunities inherent in participating in the 340B Drug Discount Program.

The 340B Drug Discount Program is a complex opportunity to manage. Not only can eligibility criteria and compliance requirements be dynamic in nature, but the breadth of opportunities to leverage within the program are also subject to change. Further, there are variations in the opportunities and compliance requirements depending on the type of Covered Entity an organization qualifies as. However, the 340B program can also be a high-value opportunity for those who qualify, yielding 20-50% off existing drug costs if managed optimally. So for Supply Chain professionals needing to engage in supporting participation in the 340B program, it is important to understand the basics of 340B and Supply Chain’s role.

Three key topics are addressed in this white paper, including what is 340B, what are the eligibility criteria, and what is Supply Chain’s role.

1. What is 340B?

Description and History of Program
The 340B Drug Discount Program is a discount pricing program derived from Section 340B of the Public Service Act allowing eligible health care providers access to preferential pricing for eligible medications. The program supports Disproportionate Share Hospitals (DSH) and select other eligible health care organizations that serve underprivileged populations in their efforts to provide cost-effective care to these more vulnerable patient populations. Through Section 340B drug manufacturers are required to provide eligible outpatient medications to eligible patients at highly discounted prices to providers who qualify as eligible health care organizations. Eligible health care providers are primarily those that serve a disproportionate amount of care to underprivileged populations, and are described in greater detail in Section 2 of this paper. 

The 340B program began in 1992 requiring drug manufacturers to provide eligible outpatient medications to eligible patients at lower prices to eligible providers. One of the key goals of the program is the enable “covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” (“340B Drug Pricing,” n.d.) The program was passed by Congress as part of the Veterans Health Care Act of 1992, Public Law 102-585.

Before the 340B program was launched in 1992, Congress had created the Medicaid Drug Rebate Program two years earlier. This program targeted leveraging manufacturer rebates paid to states based on Medicaid sales as a means to offset costs for entities serving higher-than-average volumes of underprivileged populations (National Health Policy Forum, 2009). Congressional hearings two years later in 1992 yielded evidence that the Medicaid Drug Rebate Program was not reducing the net drug costs for these entities as intended, which then led to the 340B Drug Discount Program of the Veteran Health Care Act of 1992 (Stefanie Berman, 2004).

To support the 340B program the U.S. Government established the Prime Vendor Program for managing the program’s drug pricing. The 340B Prime Vendor Program is managed by Apexus through a contract awarded by Health Resources and Services Administration (HRSA). As the government’s awarded 340B Prime Vendor, Apexus is responsible for securing sub-ceiling discounts on outpatient drug purchases and discounts on other Pharmacy related products and services for participating public hospitals, community health centers, and other eligible safety-net health care providers electing to join the program (“340B University,” n.d.). In essence, Apexus is the group purchasing organization (GPO) for all 340B contracted pricing.

Navigating the dynamic nature of eligibility criteria and compliance requirements is complicated. It is important for participating entities to refer to HRSA for current criteria. Not just when determining whether an organization is eligible and should participate, but also periodically throughout participation in the program. Compliance requirements and guidelines have evolved since the program began. For example, at the time this whitepaper was written a number of significant changes to the 340B program were still being debated, referred to as the “Mega-Reg” or “mega guidance”. Public comment period for these proposed changes ended October 27, 2015, and the breadth and timing of changes to come still had not been determined.

Pricing & Saving
Pricing for prescription drugs purchased under the 340B Drug Discount Program are based on the average manufacturer price (AMP) reduced by a minimum of at least 23.1% for most brand-name prescription drugs, 17.1% for brand-name pediatric drugs and clotting factor, and 13% for generic and over-the-counter drugs (“Overview,” n.d.). The Government Accountability Office stated in 2011 that according to HRSA, program participants can save 20-50% off their existing drug costs and may additionally generate 340B revenue as well (United States Government Accountability Office, 2011).

Savings are not only derived from deeper discounts that can be afforded via other contracting opportunities such as GPO contract portfolios, but also due to the greater breadth of drugs that 340B contract pricing covers. For example, many branded oncology drugs have discounted 340B contracted pricing but do not have contract pricing available elsewhere.

Additional Discounts
In addition to the outpatient drug 340B pricing discounts, 340B eligible health care providers designated as Disproportionate Share Hospitals (DSH) can access additional opportunities for discounted pricing on select inpatient drugs from participating vendors. These are typically referred to as DSH inpatient pricing contracts. Unlike 340B contracts for eligible outpatient use which cannot be shared with GPOs, DSH inpatient pricing contracts are voluntary discount agreements for eligible entities that can be administered by an organization’s primary group purchasing organization (GPO). DSH pricing is usually 2-3% lower than GPO best pricing (“340B University,” n.d.). 

2. Eligibility Criteria

Participation in the 340B Drug Discount Program involves three criteria which must all be met. This includes being a provider who qualifies as an eligible health care organization or “Covered Entity” caring for “Eligible Patients” dispensing “Eligible Outpatient Drugs”.

Defining Covered Entities
Only non-profit health care organizations with certain Federal designations or receiving select Federal funding are eligible to access 340B pricing as a “Covered Entity”. Covered Entities include Disproportionate Share Hospitals (DSH), Sole Community Hospitals, Critical Access Hospitals, and a number of select specialty clinics, health centers, and rural referral centers. The breadth of entity types included in the eligibility definition has been extended several times since the 340B Drug Discount Program was enacted into law in 1992. For a full listing of eligible Covered Entities visit the HRSA Eligibility and Registration website at http://www.hrsa.gov/opa/eligibilityandregistration/. The following are brief definitions to better understand the differences between a few of the more common eligible entities including Disproportionate Share Hospitals, Sole Community Hospitals, Critical Access Hospitals, and Rural Referral Centers.

  • Disproportionate Share Hospitals: This designation is for facilities with a Disproportionate Patient Percentage of 11.75% or higher. The percentage is calculated as the sum of the percentage of Medicare inpatient days attributable to patients entitled to both Medicare Part A and Supplemental Security Income plus the percentage of total inpatient days attributable to patients eligible for Medicaid but not entitled to Medicare Part A (Centers for Medicare & Medicaid Services, 2014). The Finance department of an organization is typically measuring this percentage for their organization.
  • Sole Community Hospitals: Requirements for receiving Sole Community Hospital classification can include being located at least 35 miles away from other like hospitals, and is not limited to hospitals with less than a specific number of inpatient beds. In addition to meeting the criteria determined by Centers for Medicare & Medicaid Services to be classified as a Sole Community Hospital, the entity must also have a disproportionate share adjustment percentage equal to or greater than 8 percent in order to be eligible to participate in the 340B program.
  • Critical Access Hospitals: Requirements for receiving Critical Access Hospital certification include but are not limited to only have 25 inpatient beds or less, and being located in a rural area at least 35 miles away from any other hospital. All Critical Access Hospitals are eligible to participate in the 340B program. 
  • Rural Referral Centers: High-volume acute care hospitals in rural communities that treat a large number of complicated cases. In addition to meeting the criteria determined by Centers for Medicare & Medicaid Services to be classified as a Rural Referral Center, the entity must also have a disproportionate share adjustment percentage equal to or greater than 8 percent in order to be eligible to participate in the 340B program.

Not all 340B Covered Entities are created equal. It is important for Supply Chain professionals to recognize some unique differences in 340B Covered Entities that exist, such as different restrictions for entities depending on their classification. Key among these differences are the following:

  • Non-GPO Pricing Requirements: This ruling does not apply to all 340B facilities. Only 340B eligible entities not designated as sole community, critical access, and rural referral centers are prohibited from using GPO pricing to replenish Eligible Outpatient Drugs used on Eligible Patients. The ruling is mandated per section 340B(a)(4)(N) of the Public Health Service Act as amended by the Affordable Care Act (Health Resources and Services Administration, 2013).
  • Orphan Drugs: Another difference for 340B eligible entities designated as sole community, critical access, free-standing cancer centers, and rural referral centers is that they do not have full access to 340B pricing for orphan drugs. Orphan drugs are drugs designated by the U.S. Food and Drug Administration (FDA) to have been developed for treating a rare disease or condition in which enabling a manufacturer to be granted special development incentives (“Eligibility,” n.d.). A list of current orphan drugs can be pulled from the FDA’s website at http://www.accessdata.fda.gov/scripts/opdlisting/oopd/index.cfm. Sometimes Orphan drugs may receive approval for additional indicated uses beyond what it was developed and approved for, but the drug will still retain its orphan drug designation (U.S. Food and Drug Administration, 2011). This distinction has been the target of much debate the last couple years in relation to the extent these eligible entities could access 340B pricing. From July 2013 to October 2015 the ruling on this subject has changed three times. On July 23, 2013, HRSA issued a ruling that sole community, critical access, and rural referral centers could not purchase orphan drugs under 340B pricing (Federal Register, 2013). In July 2014, HRSA issued an interpretive rule allowing these same entities to be able to access the 340B pricing only when and if the eligible entity is able to document that use of the drug is outside the original indicated use that the orphan drug status was assigned to, but still within an approved indicated use (Health Resources and Services Administration, February 2015). On October 14, 2015, this ruling was changed again, reverting sole community, critical access, and rural referral centers back to not being able to access 340B pricing on orphan drugs under any circumstances (“Orphan,” n.d.).

Defining Eligible Patients
An individual is considered to be an “Eligible Patient” only if the individual is a patient of a Covered Entity, and that entity has an established relationship with the individual which includes maintaining current records of the individual’s health care. This does not include instances when the sole health care service provided is merely the dispensing of a drug.

Defining Eligible Outpatient Drugs
Eligible outpatient drugs are primarily any prescription drugs or over-the-counter drugs written on a prescription used by a Covered Entity in the course of outpatient care. Eligible outpatient drugs also include products more commonly managed outside of Pharmacy such as contrast media and I.V. solutions, but only if not included in a bundled payment. I.V. solutions and other products included in bundled payments can be an exception to needing to be included as an eligible outpatient drug. It is important that final interpretation of inclusion or exclusion of any of these products be approved by the organization’s Legal and Pharmacy leadership.

Products that may be determined as excluded by a Covered Entity to not be eligible outpatient drugs can include hemostatic agents, products used to prepare or maintain a device such as flushes, products used for wound care such as irrigations, anesthesia gases, compounded products, drug eluting devices where the involved drug is secondary to the device, nutritionals, and chemicals and other products with NDCs that are not drugs such as isopropyl alcohol and petroleum jelly. Final interpretation of inclusion or exception of any of these products should be approved by the organization’s Legal and Pharmacy leadership.

Medicaid is another consideration to take into account when defining eligible drugs. There is a requirement to exclude outpatient drugs used on a patient that will be tied to a Medicaid payment, as this is considered receiving a double-discount. There are a couple options to help manage this requirement. One is to elect an “Opt-In Medicaid” option that prevents Medicaid from paying on drugs that could be purchased under the 340B Drug Discount Program. A more common option typically implemented is to track and exclude doses that will be receiving Medicaid payments from being replenished with 340B priced product. Further, it’s important to note most states will allow for Managed Care Medicaid to be included in replenishment purchases made under the 340B program. Consult with HRSA for current guidelines.

Audit Requirements
Participants in the 340B Drug Discount Program are required to track purchases of eligible outpatient drugs made in support of outpatient care versus inpatient care, as the benefits of the program can only be applied toward outpatient care. These requirements include an ability to produce on demand auditable records to demonstrate compliancy. This becomes increasingly complex when both outpatient and inpatient care areas are supported through centralized purchasing, storerooms and pharmacies, and even more complex in tracking within mixed-use areas such as Emergency Rooms, Surgery, Endoscopy, and other areas where patients may be treated as outpatients and then admitted and treatments started immediately as a registered inpatient.

Split-billing software is prevalent in supporting the tracking and audit requirements for Covered Entities, as well as for preventing potential double-discounts related to Medicaid as explained above. It is also prevalent in supporting tracking requirements for Covered Entities that engage in working with Contract Pharmacies, which is further explained in Section 3, “Understanding and Expanding on the Opportunities”. Split-billing software vendors typically have separate software solutions for the inpatient/outpatient splitting and for the Contract Pharmacy tracking software, as each have unique requirements to support.

HRSA states annual self-audits are not expressly required, but Covered Entities participating in the 340B program are required to maintain auditable records to support ongoing compliance and timely identification of any problems (“FAQs,” n.d.). Self-audits including periodic third-party audits can be completed at various frequencies, including monthly, quarterly, and annually. Covered Entity compliance is also enforced through a required annual recertification process. The recertification process involves covered entities reviewing their information in the HRSA 340B database, updating as needed, and attesting to the covered entity’s compliance with 340B program requirements (“340B Drug Pricing,” n.d.).

In addition to maintaining auditable records to demonstrate compliancy, participating organizations need to define an error threshold that constitutes material breach, which then requires self-disclosure to the Office of Pharmacy Affairs and to the manufacturers involved. An example of a material breach measure is an error resulting in a deviation that is in excess of a defined percentage related to any one manufacturer’s purchases annually. Such definitions and thresholds should be documented in policy by the participating organization.

3. Supply Chain’s Role

Yes, it is About Drugs
Even if your Supply Chain team does not manage the purchasing and stocking of pharmaceuticals, you may still need to be involved. As touched on in Section 2 above, eligible outpatient drugs can include a number of products commonly managed by Supply Chain. For example, Supply Chain typically manages prescription items such as I.V. fluids, irrigation solutions, contrast, and flush syringes. Other products may exist as well that are managed by an organization’s Supply Chain that may need to be included in the compliance processes for 340B as well. For example, non-prescription drugs such as basic ointments and creams written on a prescription or order for outpatient care, potentially some chemicals, and some organizations may even include drug eluting devices as products needing to be tracked to support compliancy requirements. It is important that final interpretation of inclusion or exclusion of products be vetted and approved by the organization’s Legal and Pharmacy leadership as to what defines an eligible drug.

If an organization identifies any products managed by Supply Chain as needing to be included in the 340B Drug Discount Program, it then becomes important for Supply Chain to understand what is required to maintain compliancy and help manage opportunities and risks. Compliancy is important. If a product is determined to be an eligible drug, then it is required to be included in the 340B program or the organization’s participation in the program is at risk.

It is for critical for all leaders involved in the 340B program, including Supply Chain leaders if involving any products managed by Supply Chain, to understand not only how to maximize the opportunities inherent in the program, but also how to minimize and mitigate risks that could terminate an organization’s ability to participate.

Understanding and Expanding on the Opportunities
Beyond the core discounts afforded to 340B participants described in Section 1 earlier, there are other opportunities that an eligible entity can choose to leverage to expand on the value yielded. One example is that in addition to 340B contract pricing, 340B participants designated as Disproportionate Share Hospitals (DSH) can access further discounted pricing on select inpatient drugs from participating vendors. These are typically referred to as DSH inpatient pricing contracts and are voluntary discount agreements for eligible entities that do not have the same compliance requirements as the core 340B pricing for eligible outpatient drugs. DSH inpatient pricing contracts can be administered by an organization’s primary group purchasing organization (GPO), unlike 340B contracts which cannot be shared with GPOs. DSH pricing is usually 2-3% lower than GPO pricing (“340B University,” n.d.).

Other opportunities exist as well. Contract Pharmacies are an opportunity pursued by many eligible entities, but not all. Contract pharmacies are third-party pharmacies that a 340B Covered Entity selectively contracts with to expand the scope and breadth of the Covered Entity’s eligible purchases. Typically the contracted relationship involves tracking eligible drugs dispensed to an eligible patient of an eligible 340B Covered Entity that was not dispensed by the Covered Entity themselves. For example, when an eligible patient fills a prescription at a local retail Pharmacy. The financial side of the contracted relationship typically involves the Covered Entity receiving the covered payment for the dispensation in exchange for providing the Contract Pharmacy a defined dispensing fee and replenishing the dispensed inventory with the goal of each achieving a mutually beneficial net margin. The replenished inventory is typically managed using split-billing software and a bill-to (Covered Entity)/ship-to (Contract Pharmacy) arrangement purchased using a Covered Entity’s 340B purchasing account. Regarding software, split-billing software solutions help support tracking of eligible patients seen by the community Pharmacy, as well as payments made by patient and/or insurance to be forwarded to the Covered Entity. These software solutions also help support tracking of dispensing fees owed by the Covered Entity to the Contract Pharmacy and replenishment stock to be purchased and paid for by the Covered Entity and shipped to the Contract Pharmacy.

To engage in a Contract Pharmacy relationship with a third-party Pharmacy the entity and Pharmacy must have a written contract that is aligned with HRSA guidance, and must list the Contract Pharmacy on the HRSA 340B Database as a participating Contract Pharmacy. Registration on the 340B Database can only be completed during a quarterly registration period.

Understanding and Managing the Risks
Participating in the 340B Drug Discount Program is not just about maximizing opportunities, but also about compliancy and mitigating risks that could terminate an organization’s ability to participate.

Identifying and defining what the organization interprets as an eligible drug is critical to managing risk. Further, the organization needs to identify and define how it will maintain a compliant inventory management program. Separate inventories are neither required nor recommended for participating in the 340B program. With today’s technologies virtual inventories are the primary means for tracking eligible purchases and are most easily managed by using split-billing software. Split-billing software was described at the end of Section 2 in “Audit Requirements”.

Another key compliancy requirement pertains to those 340B eligible entities that are not designated as sole community, critical access, and rural referral centers. These other entities which include disproportionate share hospitals (DSH), children’s hospitals, and free-standing cancer hospitals, are prohibited from using GPO pricing to replenish Eligible Outpatient Drugs used on Eligible Patients. This ruling does not apply to all 340B facilities. Under section 340B(a)(4)(N) of the Public Health Service Act as amended by the Affordable Care Act, the prohibition against participation in GPO pricing agreements solely related to eligible drugs does not apply to facilities designated as sole community hospitals, critical access hospitals, or rural referral centers (Health Resources and Services Administration, 2013). Further, if an Eligible Drug cannot be tracked and proven as having been used on a non-Eligible Patient then it might need to be replenished using non-GPO pricing as well as non-340B pricing.

It’s just as important to be able to document that a drug was used on a non-eligible patient as it is with an eligible patient in this scenario. In some instances Eligible Drugs such as contrast media for some organizations may not be charted in a manner that feeds into a split-billing system to be tracked, so all purchases may need to be purchased outside GPO pricing. Even if the product is unavailable at 340B pricing, an eligible entity cannot purchase an eligible drug on a GPO contract (Health Resources and Services Administration, 2013). One way to mitigate unnecessary higher costs for select categories that are unable to be tracked well enough is to create single-facility, non-GPO pricing agreements for these products. Locally negotiated multi-facility contracts are not advisable as they may still be interpreted as a group purchasing arrangement. Needs to be single-facility to best be interpreted as compliant. Again, this compliancy requirement only applies to 340B eligible entities that are not designated as sole community, critical access, and rural referral centers.

Maintaining a network of peers and designating a 340B “expert” is advisable for any participant in the 340B program. Many if not most participating organizations maintain a membership with 340B Health to increase their network of resources. 340B Health is a membership group that networks Covered Entities to each other and to other entities engaged in the 340B program. 340B Health also coordinates advocacy for program participants, and offers limited legal guidance for member organizations. It is also common for participating organizations to designate an internal role to be a 340B “expert”. Depending on the size of the organization, or scope of opportunities and risk being pursued and managed the role could be a full-time position. Further, it can also be beneficial for a participating organization to charter a 340B Leadership Team.

Perhaps the most effective means for managing risks is through policy, and there are a few elements that are crucial to include.

Importance of Policy
To support an organization’s ability to manage and balance the risks and opportunities associated with participating in the 340B Drug Discount Program it is crucial to document in policy the organization’s definition of eligibility to include eligible entities (Covered Entities), eligible patients, and eligible medications. To exclude any of these elements can lead to individual sites or individuals interpreting requirements differently and putting the organization at risk for potential disqualification from the program.

Important to be aware that different entities and organizations may interpret the opportunities and risks inherent in participating in the 340B program differently. For example, one entity may interpret eligible patients as including employees and their prescriptions, and another may go further to include volunteers as part of their defined staff and thus eligible. Some entities may limit eligible outpatients to only those that are seen as patients within the hospital’s physical walls, and others may expand to any whose medical records are “owned” by the Covered Entity (defined below). Some may decide to expand their eligible outpatient drugs to include medications dispensed to eligible patients at non-owned community retail pharmacies through Contract Pharmacy agreements. Regardless of the extent an entity decides to leverage the benefits of the 340B program or to limit its risks, it is important to clearly define and maintain a consistent practice model via policy for the organization. This becomes increasing important for managing and balancing the opportunities and risks if managing several eligible entities across a common health system.

4. Conclusion
The 340B Drug Discount Program is complex in nature to manage, but also a high-value opportunity to pursue for those who qualify, yielding 20-50% off existing drug costs.

To successfully navigate the complexities inherent in participating in the 340B program, there are a number of important resources an organization can leverage. First, it is important to refer to HRSA for current criteria, and not just when determining whether an organization is eligible and should participate, but also periodically throughout participation in the program. Second, many participating organizations maintain membership with 340B Health to increase their network of resources. Through membership with this group, Covered Entities are networked to other entities engaged in the 340B program, as well as provided with coordinated advocacy and limited legal guidance. Third, it is common for participating organizations to designate an internal role to be a 340B “expert”. Depending on the size of the organization, or scope of opportunities and risk being pursued and managed the role could be a full-time position. Further, it can also be beneficial for a participating organization to charter a 340B Leadership Team.

To support the tracking and audit requirements for Covered Entities participating in the 340B program, split-billing software is prevalent. Not only does this software help with maintaining auditable virtual inventories and replenishment orders, but can also support preventing errors such as potential double-discounts related to Medicaid payment, and also supporting the tracking requirements for Covered Entities that engage in Contract Pharmacies relationships. Split-billing software vendors typically have separate software solutions for the inpatient/outpatient splitting versus Contract Pharmacy relationships, as each have unique requirements to support.

The most effective means for managing risks associated with participating in the 340B program is through policy. Policy defining eligibility, eligible entities (Covered Entities), eligible patients, and eligible medications is crucial in supporting an organization’s consistency on how to interpret and act on required criteria, helping an organization avoid risk for potential disqualification from the program.

Pharmacy and Finance may need to be most familiar with the details of participation and compliancy, but Supply Chain professionals are increasingly expected to support and help facilitate an organization’s engagement in the program. This expectation comes not only from growing responsibility for Pharmacy’s Supply Chain, but also due to products that Supply Chain may be ordering or managing that need to be accounted for under the program in order to remain compliant.

With careful planning and management, participation in the 340B Drug Discount Program can yield significant value to organizations that qualify as Covered Entities.

 

References:

 

340B Drug Pricing Program (n.d.). In Health Resources and Services Administration web site. Retrieved from http://www.hrsa.gov/opa/

340B University, Glossary of 340B Terms (n.d.). In APEXUS web site. Retrieved from https://docs.340bpvp.com/documents/public/resourcecenter/glossary.pdf

Centers for Medicare & Medicaid Services (CMS). Medicare Disproportionate Share Hospital, Rural Health Fact Sheet Series (August 2014) ICN 006741

Designating an Orphan Product: Drugs and Biological Products (n.d.). In U.S. Food and Drug Administration web site. Retrieved from http://www.fda.gov/forindustry/developingproductsforrarediseasesconditions/howtoapplyfororphanproductdesignation/default.htm

Eligibility & Registration (n.d.). In Health Resources and Services Administration web site. Retrieved from http://www.hrsa.gov/opa/eligibilityandregistration/

FAQs (n.d.). In Health Resources and Services Administration web site. Retrieved from http://www.hrsa.gov/opa/faqs/index.html

Federal Register. Exclusion of Orphan Drugs for Certain Covered Entities Under 340B Program (July 23, 2013). 44016 Federal Register Vol. 78, No. 141 / Tuesday, July 23, 2013 / Rules and regulations

Health Resources and Services Administration. 340B Drug Pricing Program Notice, Release No. 2013-1. Statutory Prohibition on Group Purchasing Organization Participation (February 7, 2013).

National Health Policy Forum, prepared by Christie Provost Peters. THE BASICS: The Medicaid Drug Rebate Program (April 13, 2009).

Orphan Drugs Exclusion (n.d.). In Health Resources and Services Administration web site. Retrieved from http://www.hrsa.gov/opa/programrequirements/orphandrugexclusion/

Overview of the 340B Drug Discount Program (n.d.). In 340B Health web site. Retrieved from http://www.snhpa.org/340b-resources/340b-program/overview

Stefanie Berman. A Legislative History of the Medicaid Drug Rebate Law: The Drug Industry and the Crusade of Senator David Pryor (2004).

U.S. Food and Drug Administration (FDA), Advisory Committee for Pharmaceutical Sciences and Clinical Pharmacology. Introduction: Rare Diseases, Orphan Drugs (March 2, 2011).

United States Government Accountability Office (GAO), Report to Congressional Committees. DRUG PRICING: Manufacturer Discounts in the 340B Program Offer Benefits, but Federal Oversight Needs Improvement (September 23, 2011).