340B Drug Pricing Program and Office of Pharmacy Affairs Update

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340B Drug Pricing Program and Office of Pharmacy
Affairs Update

• Ohio Association of Community Health Centers
• May 13, 2008
• Christopher A. Hatwig, MS, RPh
• Senior Director
• 340B Prime Vendor Program/Apexus

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Objectives

• Discuss background of 340B program
• Review roles of OPA, PSSC, and the 340B Prime
  Vendor
• Discuss eligibility requirements
• Discuss service options available to CHCs
• Provide resources for assistance

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Background 340B Drug Pricing Program

• 1990 -Congress created Medicaid rebate law
• Drug manufacturers responded by increasing prices
• 1992 - Congress passed Veteran Health Care Act
  (VHCA) intended to extend relief to govt payers
  of drugs
• Act stated that manufacturers participating in
  Medicaid must sign a Pricing Agreement to
  participate in the 340B program
• Provides discounts on outpatient covered drugs
• Required drug manufacturers to give best price to
  disproportionate share hospitals and certain
  covered entities grants
• Also referred to as Section 602, PHS or
  340B pricing

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340B Covered Entities Eligible to Participate

• Disproportionate Share Hospitals
• FQHC LAs
• HRSA Grantees
• Federally Qualified Health Centers (FQHC)
• Hemophilia Treatment Centers
• Ryan White Programs (HIV programs)
• Sexually Transmitted Disease programs
• Tuberculosis Programs
• Title X Family Planning Clinics
• Urban 638 Tribal Programs

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Manufacturers 340B Pricing and Medicaid Rebate
Programs

• Medicaid and 340B entities receive prices based
  on either Best Price or Average Manufacturer
  Price (AMP) 15.1 for branded drugs
• Additional discounts are applied if price
  increases exceed the Consumer Prime Index (CPI)
• Generics AMP minus 11
• Best Price is not part of generic calculation
• Pricing - recalculated quarterly
• Discounts are upfront. No backend rebates
• Can sell at sub-340B pricing through the PVP with
  no penalties

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Program Restrictions for Participating Entities

• Prohibits resale or transfer of discounted drugs
  to anyone other than patient of covered entity
• In most cases, covered entities must bill
  Medicaid at acquisition cost plus dispensing fee.
  
• Drugs purchased under 340B cannot be subject to
  both the 340B discount and Medicaid rebate
  (Duplicate Discount Rule)
• No billing restrictions for non-Medicaid patients
  or in situations where Medicaid is not line-item
  billed for outpatient drugs
• Medicaid Carve-out Option (in some states)

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What Drugs Are Covered within CHCs?

• Covered drugs
• Outpatient Prescription drugs
• Over-the-counter drugs (if accompanied by a
  written prescription)
• Clinic administered drugs within eligible
  facilities

• Non-covered drugs
• Vaccines

Aggressive discounts have been negotiated for
vaccines and other non-covered products by the
Prime Vendor Program
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340B Service Options

• In-House Pharmacy
• Traditional
• Telepharmacy
• Management company operated
• Contracted Pharmacy
• Community retail
• Mail order
• Prescriber Dispensing

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Current Contract Pharmacy Guidelines

• Each covered entity may use only one pharmacy to
  provide all pharmacy services (approved AMDP is
  the exception)
• The entity has the choice of using either an
  in-house pharmacy or a contract pharmacy for site
• There are no limits on how many in-house
  pharmacies a covered entity can operate
• Ship to, bill to arrangement
• Negotiated flat dispensing fee paid to the
  pharmacy all collected revenue turned over to
  covered entity

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The Value of 340B Savings

• Discounts range from 25 to 50
• A Mathematica study commissioned by HRSA
  documented an average of 27 savings
• HRSA grantees see greater savings than hospitals
• Added savings with 340B Prime Vendor Program

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Estimated Prices For Selected Public Purchasers,
as Percent AWPvon Oehsen Pharmaceutical
Discounts Under Federal Law State Program
Opportunities
0
20
40
60
80
100
100.0
AWP
80.0
AMP
67.9
Medicaid (Min.)
60.5
Medicaid Net
51.7
FSS
Private Sector Pricing
49.0
340B
47.9
FCP
34.6
VA Contract
Stephen Schondelmeyer, PRIME Institute,
University of Minnesota (2001)
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Program Administration

• Three Legs of the OPA/340B Program
• Federal Team
• Pharmacy Services
• Support Center
• (PSSC/PharmTA)
• 340B Prime Vendor
• Program (PVP)

OPA/340B Program
FEDS
PVP
PSSC
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Office of Pharmacy Affairs (OPA) Mission and
FunctionFederal Register 9/21/2004

• Responsible for management and oversight of the
  340B Programs
• Manage pharmaceutical pricing agreements (PPAs)
  with industry
• Manage covered entity eligibility and enrollment
• Promote access to clinically and cost-effective
  pharmacy services through
• Maximizing the value of participation in 340B
• Developing innovative pharmacy services
• Being a Federal resource for pharmacy practice

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Growth of 340B Covered Entity Sites
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FQHC Grantee Participation in 340B and the Prime
Vendor Program, 1/01/2008
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Growth in 340B Contract Pharmacy
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Alternative Method Demonstration Projects (AMDP)
December 2001 - February 2008
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The Pharmacy Services Support Center (PSSC)
managed by APHA
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Pharmacy Services Support CenterA Key Resource
for Health Centers

• Established through a contract between APhA and
  HRSA
• Established 2002
• Renewed 2007
• Enhances Office of Pharmacy Affairs (OPA)
  resources to optimize the value of the 340B
  program in order to provide affordable,
  comprehensive pharmacy services that improve
  medication use and advance patient care and
  patient access to affordable drugs.

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Pharmacy Services Support Center

• Information management
• Organizing pharmacy expertise and resources
• Responding to 340B inquiries
• Policy analysis
• Monitoring pertinent policy developments
• Communication and education on policy issues and
  Medicare
• Networking
• Communication and education
• Presentations
• Project development

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PSSC Call Center

• First source for information on 340B pharmacy
  program details and pharmacy services
• Call center staff is trained to answer all types
  of 340B questions or direct inquires to
  appropriate people
• Hours of operation Monday- Friday 900 AM- 430
  PM EST.
• 1 800 628 6297 or email PSSC_at_aphanet.org

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PSSC Website

• http//pssc.aphanet.org/
• Details the 340B Program
• Basic information for all entity types
• Who is eligible and how to enroll
• Up- to- date Policy information and Analysis
• Federal 340B legislation
• State 340B legislation
• Medicare
• Latest Developments

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340B e-Library (SEARCH)
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PSSC PharmTA

• Free technical assistance for 340B-eligible
  entities interested in setting up or enhancing
  clinically and cost effective pharmacy services
• PharmTA consists of a pool of pharmacy experts
  who work one-on-one with entities through phone
  and/or on-site consultations to maximize 340B at
  individual entities
• For more information 1-866-PharmTA or visit
  http//pssc.aphanet.org/

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Implementation Resources

• Guides for Implementing Comprehensive Pharmacy
  Service
• Contain checklists and 340B worksheets as well as
  comprehensive advice
• The Bridge to 340B Comprehensive Pharmacy Service
  Solutions in Underserved Populations
• http//pssc.aphanet.org/documents/bridge-340B_001.
  pdf
• Implementing a Comprehensive 340B Contracted
  Pharmacy Service
• http//pssc.aphanet.org/documents/pharmacy_001.pdf

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Financial Analysis

• Located in Resources section of PSSC website
• In-House Pharmacy
• Contract Pharmacy
• http//pssc.aphanet.org/resources.htm

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Interactive Financial Analysis
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Implementation Action Plans

• Step by step guide for implementing 340B
• Description, Background Information, Resource(s),
  Staff hours, Completion Target time, and Staff
  responsible
• Facilitate implementation in compliance with 340B
  guidelines/regulations
• Action Plans are also available for In-House
  pharmacy option and Contract pharmacy option

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340B Prime Vendor Program (PVP) managed by
Apexus(Part III in Webinar Series)

• Apexus is non-profit entity
• Contracted with Office of Pharmacy Affairs (OPA)
  as the Prime Vendor for 340B Program
• Existing contract extends through September, 2009
• Apexus is dedicated to managing prime vendor
  agreement

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PVP Mission/Goals

• Improve access to affordable medications for
  covered entities and their patients
• Primary goals
• Lower participants supply costs by expanding the
  current PVP portfolio of sub-340B priced products
  
• Provide covered entities with access to efficient
  drug distribution solutions to meet their
  patients needs
• Provide access to other value added products and
  services meeting covered entities unique needs

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Program Highlights

• Over 6,200 participants
• Over 50 suppliers
• 2,800 discounted products and services
• Participant councils providing program guidance
• Hospitals
• CHCs
• Title X Family Planning Clinics
• Average sub-ceiling savings of 15 across all
  participants for outpatient covered drugs
• Additional savings available on other value added
  pharmacy products such as vaccines, diabetic
  supplies, syringes, etc.

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Participants Benefits

• Ease of enrollment and activation
• No cost to participate federal benefit
• Savings on outpatient covered drugs and other
  value added outpatient products and services
• Access to secure website to validate pricing with
  wholesalers
• Reports and other resources available to assist
  with procurement and budgeting decisions
• Participant communications
• Support of 340B education programs focused on
  compliance and providing networking opportunities

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Cost Savings Analysis FQHC Spokane , WA
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Contact Information

• Office of Pharmacy Affairs
• Phone [phone] or 1-800-628-6297
• Email opastaff_at_hrsa.gov
• Web www.hrsa.gov/opa
• HRSA Pharmacy Services Support Center
• Phone [phone]
• Email hhagel_at_aphanet.org
• Web http//pssc.aphanet.org
• Prime Vendor Program
• Phone [phone]
• Email chatwig_at_340bpvp.com
• Web http//www.340bpvp.com