Britten Pund, Senior Manager, Health Care AccessEmily McCloskey, Manager, Policy and Legislative Affairs

The Ryan White Program and340B Pharmacies

Agenda

340B Drug Pricing Program Overview

Coordinating with other 340B entities

Policy updates

Overview

Authorized by the Veterans Health Care Act of 1992 and is administered by the Health Resources and Services Administration (HRSA).

Provides discounts on covered outpatient drugs to certain safety-net covered entities - average savings of 25-50%

Manufacturers participating in Medicaid agree to charge covered entities a price that will not exceed the 340B “ceiling price”. 

The “ceiling price” is calculated based on data obtained from the Centers for Medicare & Medicaid Services (CMS).

Overview(continued)

The 340B Drug Pricing Program provides outpatient drugs at a reduced price to safety-net providers– The drugs can be directly purchased at the discounted

rate or programs can receive rebates using a pharmacy network purchasing system

It is designed to provide a pricing benefit to safety-net providers with the intent that providers use the savings to reinvest in their programs and enhance medical services to uninsured patients.

Intent of the 340B Program

Permits eligible safety net providers “tostretch scarce Federal Resources as far as possible, reaching more eligiblepatients and providing more comprehensive services.”

H.R. Rep. No. 102-384(II), at 12 (1992)

Program Benefits

Covered entities benefit when the covered entity is able to bill the patient’s insurer (if insured) at a negotiated rate that is higher than the 340B price paid to obtain the drug.

HRSA has no statutory authority to dictate how entities use the savings generated by the 340B program.

Eligible Entities

Ryan White HIV/AIDS Program Grantees– Ryan White Part A & B Clinics, AIDS Drug Assistance Programs (ADAPs),

Ryan White Part C Early Intervention Services Grantees

Health Centers– Federally Qualified Health Centers, Federally-Qualified Health Center

Look-Alikes, Native Hawaiian Health Centers, Tribal / Urban Indian Health Centers

Hospitals– Children’s Hospitals, Critical Access Hospitals, Disproportionate Share

Hospitals, Free Standing Cancer Hospitals, Rural Referral Centers, Sole Community Hospitals

Specialized Clinics– Black Lung Clinic Programs, Comprehensive Hemophilia Diagnostic

Treatment Centers, Title X Family Planning Clinics, Sexually Transmitted Disease Clinics, Tuberculosis Clinics

Eligible Entities(continued)

ADAPs are categorically eligible, meaning all ADAP clients are eligible for 340B priced drugs

All other entities must abide by the patient definition: 1. The covered entity has established a relationship with the individual,

such that the covered entity maintains records of the individual’s health care; and

2. The individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g., referral for consultation) such that responsibility for the care provided remains with the covered entity; and

3. The individual receives a health care service or range of services from the covered entity which is consistent with the service or range of services for which grant funding or Federally-qualified health center look-alike status has been provided to the entity. Disproportionate share hospitals are exempt from this requirement.

Registration and Enrollment

http://opanet.hrsa.gov/opa/Default.aspx

Annual Recertification

Required by Statute– ADAP recertification - January 2015

Ensure program integrity, compliance, transparency and accountability

Ensure accuracy of covered entity information in the 340B database

It is the covered entity’s responsibility to ensure the accuracy of the information in the 340B database

Entities must self-disclose programmatic violations

340B Database

Entities are not eligible for the program unless listed in the 340B database

Entities are required to keep their information up to date on the database and ensure sites are properly listed

Includes the Medicaid Exclusion File

Requirements

It is a covered entity’s responsibility to immediately inform HRSA of a change in eligibility status – entity should stop purchasing

Entities should also report non-compliance to HRSA

All offsite outpatient facilities and subgrantee sites are required to enroll and be listed on the 340B database

Patient Definition

1996 HRSA Patient Definition Guidelines– Covered Entities (CEs) Other Than ADAP

CE maintains records of individual’s health care and Individual receives health services from health care professional

employed by CE or under contract or other arrangements such that responsibility for care provided remains with CE

– Service must be more than dispensing of a drug for self-administration or administration in the home setting

– Additional Criterion for Non-ADAP HRSA Grantees Individuals receives health care service(s) from CE which is

consistent with range of services covered by HRSA grant

– ADAPs Only An individual registered in state-operated or funded ADAP that

receives Ryan White funding is considered a patient of the ADAP if registered as eligible by the State program.

Patient Definition(continued)

HRSA intended to address patient definition in “mega-reg”

Widely differing perspectives on future of patient definition– 340B Coalition

Basic construct of current definition is sound Specific terms should be defined to avoid confusion by

stakeholders HRSA should release new guidance or regulation in

proposed form, so that the public has opportunity to comment

– PhRMA Limit to “uninsured individuals” Physician must be employee or independent contractor Patient must receive “ongoing care”

340B Compliance and the Current Enforcement Environment

Increase in HRSA audits and inquiries

Increase in manufacturer inquiries

Annual recertification for all CEs

HRSA plans to issue new guidance in many program areas

Coordinating with Other 340B Entities

An individual may be considered a patient of both the ADAP and another covered entity

Both the ADAP and the covered entity would be eligible for the 340B Drug Pricing Program discount/rebate

Only one entity can claim the 340B price for a patient’s prescription

Policy Updates

The Office of Pharmacy Affairs (OPA) intended to release a “mega-regulation,” which would codify previous 340B Program guidances, policy releases and FAQs

Due to legal issues with OPA’s rule on orphan drugs, the release of the mega-regulation and all other OPA regulations have been postponed indefinitely

HRSA has stated that it will release a proposed guidance in 2015 and proposed rules civil monetary penalties for manufacturers, calculation of the 340B ceiling price, and administrative dispute resolution.

Policy Updates(continued)

The 340B Drug Pricing Program could be a target for the 114th Congress

PhRMA is advocating for a change to the patient definition that would require patients to be uninsured– This could cause issues for Ryan White Program

grantees

Contact Information

Britten PundSenior Manager, Health Care Access

bpund@NASTAD.org(202) 434-8044

Emily McCloskeyManager, Policy and Legislative Affairs

emccloskey@NASTAD.org(202) 434-8067

www.NASTAD.org