Optimizing The 340B Program Promoting Integrity, Access, & Value To deliver clinically and cost-effective pharmacy services This educational product created by: Health Resources and Services Administration | Office of Pharmacy Affairs 340B Peer-to-Peer Program

340B 101: The Basics Purpose of Activity The purpose of this module is to illustrate the history, intent and statutory principles of the 340B Drug Pricing Program.

Intent of the program 340B pricing determination Entity eligibility Entity enrollment procedure Program requirements and prohibitions Program guidance and policy Patient eligibility determination Drug-delivery optionsAvailable resources Topic Guide

Creation of the 340B Program Certain safety net covered entities Outpatient drugs Price discounts Required for all manufacturers in Medicaid 340B Program

Intent of the 340B Program Stretch scarce federal resources 1 Reach more eligible patients 1 Provide more comprehensive services 1 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).

B Statute st Guidelines 1996 Contract Pharmacy, Patient Definition 2004 Vendors 2010 Affordable Care Act 1st Proposed Regulations 340B Program Evolution

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 340B Price

11 Outpatient prescription drugs Over-the-counter drugs (with prescription) Clinic-administered drugs Biologics (prescription) Insulin Inpatient drugs Vaccines 340B Covered Drugs

›Federal Grantees Comprehensive hemophilia treatment centers Federally qualified health centers/lookalikes Urban/638 health center Ryan White programs Sexually transmitted disease/tuberculosis Title X family planning ›Hospital Types 11 * 340B eligible through Section 7101 of the Affordable Care Act (ACA) Disproportionate share hospitals Children’s hospitals * Critical access hospitals * Free-standing cancer hospitals * Rural referral centers * Sole community hospitals * 340B Eligible Entities

Hospital Eligibility Criteria Entity Type Non-profit/ Govt. Contract DSH% Group Purchasing Organization (GPO) Prohibition * Orphan Drug* Applies? Disproportionate Share Hospital (DSH) Yes>11.75%Yes No Children’s Hospital (PED)Yes>11.75%YesNo Free-standing Cancer Hospital (CAN)Yes>11.75%Yes Critical Access Hospital (CAH)YesN/ANoYes Rural Referral Center (RRC)Yes>8%NoYes Sole Community Hospital (SCH)Yes>8%NoYes * 340B eligible through Section 7101 of the Affordable Care Act (ACA)

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:

340B Enrollment Procedure Determine Eligibility Enroll online Submit Forms to OPA as directed Await decision from OPA

› Ensure entity is listed correctly in the OPA 340B database › Set up an account with wholesaler using 340B ID for purchasing Wholesalers will not ship discounted drugs unless 340B ID is an exact match to the 340B database › Prepare operational and logistical monitoring, auditing, and compliance processes and procedures › Utilize available resources Prime Vendor Program for sub-ceiling 340B pricing, value-added services and for technical assistance 340B Implementation

340B Prohibitions and Requirements Duplicate Discounts Diversion Prohibitions

Duplicate Discount Accessing the 340B discount AND Medicaid Rebate on the same drug Medicaid Exclusion File at: Medicaid Exclusion Tutorial at: State policies Entities should contact their state Medicaid offices for state-specific requirements for using 340B with Medicaid patients. Carve In (use 340B with Medicaid) Carve Out (do not use 340B with Medicaid) Fed Regist. 2000;65(51):13983–4. Duplicate Discount Prohibition

› Diversion occurs when: A drug is provided to an individual who is not a patient of that entity Required to follow patient definition guidelines 1 A drug is dispensed in an area of a larger facility that is not eligible (e.g., an inpatient service, a non- covered clinic) Entities should enroll all eligible outpatient or satellite sites 1. Fed Regist.1996;61(207):55156–8. Diversion Prohibition

GPO Prohibition ›GPO prohibition prohibits certain entities from purchasing any covered outpatient drugs through a GPO or other group-purchasing arrangement, even if items are available at a lower price through the GPO. Hospitals can continue to purchase all products for inpatient operations through a GPO, even if their outpatient departments participate in 340B. DSHs PEDs CANs GPO Prohibition Only Applies to

The Orphan Drug Exclusion ›The Orphan Drug Product Designation Database can be found at: › ›The orphan drug exclusion prohibits certain entities from purchasing orphan drugs at 340B discount prices. RRCs Orphan Drug Exclusion Only Applies to CAHs SCHs CANs

Federal Register Notice Patient Definition Contract Pharmacy Outpatient Facilities Audits and Dispute Resolution Duplicate Discounts 340B Guidance and Policy

Regulations (Proposed) Civil Monetary Penalties Dispute Regulation 340B Proposed Regulations

Patient Definition Entity has established a relationship and maintains records of care Patient must receive health-care services from health-care professional employed/contracted with entity, and entity must maintain responsibility for the care provided Patient receives health care consistent with range of services from the covered entity (hospitals are exempt) For eligibility, three components must always be considered regarding the individual and his/her associated prescription: Fed Regist. 1996;61(207):55156–8.

Drug Delivery Contract Pharmacies ›340B Program allows entities to have multiple contract pharmacies for increased patient access to cost-effective pharmaceuticals ›Covered entity purchases the drug, but “ship to/bill to” procedure may be used ›Covered entity retains legal title to all drugs purchased under 340B and must pay for all 340B drugs › Fed Regist. 2010;75(43):10272–9.

340B Usage Considerations 11 Federal grantees Scope of grant limitations Hospital facilities Integral part of the hospital On most recently filed cost report

Program integrity assures stakeholders that the 340B Program’s intent is being met and that rules are being followed. Access to services under the 340B Program is important because it ensures that entities and their patients have the means to fully utilize the program’s benefits. The value that program participation brings to entities is essential for stretching scarce entity resources. 340B Program Resources Integrity Access Value

Office of Pharmacy Affairs (OPA) ›Administrates over the 340B Drug-Pricing Program ›Develops innovative pharmacy service models and provides technical assistance to help entities implement effective pharmacy programs ›Serves as a federal resource about pharmacy ›Emphasizes the importance of comprehensive pharmacy services functioning as integral part of primary health care Integrity

Prime Vendor Program(PVP) ›Relationships and networking ›Policy analysis ›Education o 340B University ›Technical assistance o Apexus Answers Call center o 340B tools and resources o Access

Prime Vendor Program (PVP) ›Negotiation of o 340B sub-ceiling pricing o Discounts on value-added products, services, and supplies ›Overcharge recovery ›Pricing transparency ›Reports and tools ›Technical assistance Value

340B Resource Information Health Resources and Services Administration 340B Prime Vendor Program Managed by Apexus

Health Resources and Services Administration Office of Pharmacy Affairs 340B Peer-to-Peer Program Thank you for viewing this 340B tutorial developed by : You can view additional 340B educational products and tools specifically developed to assist 340B-participating entities create and maintain processes to ensure 340B program integrity at: