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

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

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

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

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

7. INTEGRITY ● ACCESS ● VALUE 7 340B Statute Requirements and Prohibitions AuditResell/ Transfer Prohibition Duplicate Discount Prohibition Prime Vendor Disproportionate Share Hospital GPO Exclusion

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

9. INTEGRITY ● ACCESS ● VALUE 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/ https://www.340bpvp.com/public/ Step 7.Complete 340B Registration Forms found at https://opanet.hrsa.gov/OPA/Registration/RegistrationMain.aspx 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). 9

10. INTEGRITY ● ACCESS ● VALUE 10 340B Implementation Options 340B Eligible Entities Alternative Methods Demonstration Projects www.hrsa.gov/opa/alternativemethods.htm OFFICE OF PHARMACY AFFAIRS

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

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

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

14. INTEGRITY ● ACCESS ● VALUE 340B & Medicaid: Avoiding Duplicate Discounts Duplicate Discounts on 340B Drugs

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

16. INTEGRITY ● ACCESS ● VALUE 340B Enrollment Form 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. INTEGRITY ● ACCESS ● VALUE 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. INTEGRITY ● ACCESS ● VALUE Time for a Poll! Do you currently have an outpatient/retail pharmacy?

19. INTEGRITY ● ACCESS ● VALUE 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. INTEGRITY ● ACCESS ● VALUE 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. INTEGRITY ● ACCESS ● VALUE Time for a Poll! Do you have space, expertise, and resources to build a retail pharmacy in your facility?

22. INTEGRITY ● ACCESS ● VALUE 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. INTEGRITY ● ACCESS ● VALUE Time for a Poll! Do you have a pharmacy in your area that could be contracted to dispense 340B drugs?

24. INTEGRITY ● ACCESS ● VALUE 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)ftp://ftp.hrsa.gov/bphc/pdf/opa/CPSelfCert.pdf

25. INTEGRITY ● ACCESS ● VALUE “The Flow” EntityWholesalerContract PharmacyPatient Money Flow Collects: - Payments collected by pharmacy Collects: - Money from entity Collects: - A per prescription dispensing fee from entity - Patient payments - 3 rd party reimbursement on behalf of entity Pays: - Wholesaler for drugs -Contract pharmacy a per prescription dispensing fee -Admin fees as negotiated Pays: - Collections due to the entity Pays: - Pharmacy amount due for prescription as determined by entity Drug Flow - Opens account with wholesaler as a bill to ship to arrangement - Delivers drugs to contract pharmacy - Dispenses drugs to patients - Manages and stores drug inventory owned by entity - Often orders drugs on entity’s behalf - Receives drugs from contract pharmacy

26. INTEGRITY ● ACCESS ● VALUE The Patient Safety & Clinical Pharmacy Services Collaborative (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. www.hrsa.gov/patientsafety Don’t delay, the deadline to submit a completed Participation Packages is July 31, 2009!

27. INTEGRITY ● ACCESS ● VALUE 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. INTEGRITY ● ACCESS ● VALUE Medicaid, Medicare & Third-Party Payers How does 340B work with these various payers?

29. INTEGRITY ● ACCESS ● VALUE Time for a Poll! What is your OUTPATIENT Medicaid volume?

30. INTEGRITY ● ACCESS ● VALUE Time for a Poll! What is your Medicaid MCO volume for Medicaid patients?

31. INTEGRITY ● ACCESS ● VALUE Time for a Poll! What is your OUTPATIENT Medicare volume?

32. INTEGRITY ● ACCESS ● VALUE Help! Health Resources and Services Administration Pharmacy Services Support Center at American Pharmacists Association PSSC Call Center: (202) 429-7518 Or (800) 628-6297 Email: pssc@aphanet.orgpssc@aphanet.org