340B Report, an independent news organization covering the 340B drug pricing program, is holding its first event—a May 18 webinar about implementing drug manufacturers’ controversial new rules on 340B contract pharmacies. It is an exclusive and free benefit for paid subscribers to 340B Report.
Understanding and complying with these first-of-their-kind policies is hard, 340B covered entities say. Getting help also is hard, they add. Two usual advisers to entities on such matters—the federal government and trade associations—believe that what the manufacturers are doing is illegal and they do not want to abet drug makers’ policies. Many entities say, though, that as a practical matter they must comply, and they desperately need guidance.
“We have received a lot of inquiries about this and thought it would make sense to bring a group of 340B leaders and experts who can answer questions and also bring up concerns raised by their peers,” 340B Report Publisher and CEO Ted Slafsky said. “I can’t think of a timelier subject. This is an unprecedented challenge to how the 340B program has worked for years.”
Slafsky emphasized that 340B Report’s role is not to take a position on the contract pharmacy matter but to educate 340B stakeholders on implementation issues and the pros and cons of sharing claims data.
Slafsky will be joined by:
- Aaron Vandervelde, Founder and Business Development Lead, 340B ESP
- Jason Atlas, Vice President, 340B Enterprise Strategy & Solutions, AmerisourceBergen
- Ashley Mains Espinosa, Vice President of Clinical Operations, DocStation and pharmacy adviser, SCL Health
- Sue Veer, President and CEO, Carolina Health Centers
The event will include a question-and-answer session. Space is limited and the deadline to register is May 11. (Register here)
No Two Policies Are Alike
Since July 2020, 16 drug manufacturers have imposed conditions on 340B pricing when hospitals, health centers, and other grantee covered entities contract with multiple pharmacies to dispense the manufacturers’ drugs. No two policies are exactly alike.
Ten of the 16 drug companies let entities continue to contract with multiple pharmacies if they submit contract pharmacy claims data for the company’s 340B-purchased drugs to 340B ESP, industry vendor Second Sight Solution’s claims submission platform. If entities do not provide the data, they can designate a single contract pharmacy to dispense drugs bought from the manufacturer through 340B. They must make their designation on 340B ESP’s website.
The U.S. Health Resources and Services Administration (HRSA) says manufacturer conditions on 340B pricing are illegal and must stop. Major associations that represent 340B entities also have said that the manufacturers’ actions are illegal. Many if not most of their members likely agree.
Many entities, however, have decided that they can’t afford the revenue loss from billings on drugs dispensed by contract pharmacies. They have registered with 340B ESP. But many say that they have struggled to fulfill manufacturers’ claims submission requests and get their 340B pricing restored. They also say there is a lack of information about how to operationalize what—for now—are 16 different manufacturer 340B contract pharmacy initiatives.
340B Report has received multiple calls for help from entities and consultants who have hit roadblocks trying to navigate their way through the manufacturers’ policies.
That is how the idea for the webinar arose, 340B Report’s Slafsky said.
“340B contract pharmacy operations are incredibly complex—even without the data integrity initiatives that we see in this space today—and include a variety of stakeholders,” 340B ESP’s Vandervelde said. “The data integrity initiatives have added another important stakeholder to this process—the pharmaceutical manufacturers. The flow of information now includes pharmaceutical manufacturers, and we are actively partnering with wholesalers, covered entities, contract pharmacies, and third-party administrators to make this flow of information as seamless as possible.”
Manufacturers’ new policies “have brought to the forefront the differing roles that stakeholders in the pharmaceutical supply chain play in contract pharmacy purchasing which are not always well understood by the covered entity community,” Vandervelde continued. “Similarly, we are becoming more familiar with the nuances and complexities of contract pharmacy operations which were not all well understood prior to this year.”
“We hope that this webinar is an opportunity for the exchange of information between Second Sight Solutions and covered entities that will better position us collectively to operationalize the data integrity initiatives,” he said. “If we come out of the webinar with new learnings and more common understandings of the data integrity initiatives and how they are operationalized that will be a success.”
Carolina Health Centers President and CEO Veer said she agreed to participate in the webinar because “it is going to take some level of consensus among the stakeholders to protect the [340B] program and the path to consensus is understanding.”
“My hope is that one health center CEO sharing her perspective openly and honestly will help to promote understanding,” Veer said. Veer is a long-time national leader in educating health centers and policymakers about the 340B program.
Veer said that many in the health center community are concerned that claims data submitted to 340B ESP “will be used to shift the benefit of 340B away from the covered entities and the patients we serve.”
“We understand the business logic inherent in the manufacturers’ goal to avoid paying a voluntarily negotiated rebate to a third party when the drug has already been discounted,” he said. “However, the downstream impact of that is that third party payers then have a profit-driven incentive to reduce reimbursement to the pharmacy—sometimes at rate that has us operating below total cost. These are voluntary rebates entered into to promote private business. They are not established in statute, and they put the health center program at risk. The solution to the problem is protection against discriminatory treatment of 340B covered entities by those third parties.”
Veer said the question she hears most from health centers about manufacturers’ claims data submission policies is, “Should we, or shouldn’t we?”
“The answer depends upon the circumstances of the individual health center—i.e. patient mix, prescription volume, prescribing patterns, clinical alternatives, etc.,” Veer said. “I encourage them to model the impact for either choice with the most important variable being impact on their patients.”
If a center declines to submit the data, it should ask itself how it will adapt, Veer continued. “If the choice is to submit, the questions center around how their data might be used and what protections are available.”
“I have also seen an increase in health centers asking if perhaps it is time to consider having an entity-owned in-house pharmacy,” she said.