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Since 2020, select drug manufacturers have begun deploying restrictions or limitations on the sale of their products through the 340B program. This has proven to be a marketplace disruptor that has shifted the landscape of the 340B contract pharmacy program, as covered entities have experienced a loss of savings and have had to increasingly rely on entity-owned retail and/or specialty pharmacy operations to help in their mission. The issue of manufacturer restrictions has endured several legal challenges as well with some states, such as Arkansas, Louisiana, West Virginia and Mississippi having measurable success with combating the manufacturer restrictions.
Regardless, manufacturers continue to impose restrictions with the assistance of 340B ESP, a drug industry vendor that facilitates 340B claim management and oversees implementation of drug maker policies. In many cases, the restrictions made by the manufacturers will be applied to the covered entity for all contract pharmacies unless the covered entity has created an account, made designations, and/or submitted claims within 340B ESP. Depending on the manufacturer and the type of restrictions they impose, this will restore access to either some or all of their products for one or some contract pharmacies. Each manufacturer has a policy document outlining the specific restriction(s) they are imposing and the obligations of the covered entity, as well as any exceptions, say for non-hospital covered entities. Nevertheless, covered entities will want to ensure they understand the restriction methodology and choose the most appropriate pharmacy(ies) based upon geography, drugs available to dispense at the pharmacy, and if their providers utilize the pharmacy.
For covered entities that have a 340B ESP account and have made designations while submitting claims, there are a variety of quality assurance exercises to complete that will ensure 340B ESP is facilitating the manufacturer restrictions appropriately.
Designation Review
On a monthly basis, covered entities should log into ESP and review all designations that have been made with each manufacturer to ensure they are still designated and are aligned with the covered entity’s designation strategy. The covered entity should download the eligibility file and ensure it matches each manufacturer that the covered entity clicks into. Any discrepancies identified should be addressed immediately with 340B ESP. Upon completion, send the eligibility file to your Third-Party Administrator and Wholesaler partners for additional review.
Third Party Administrator and Wholesaler Review
Upon completion of the designation review and ensuring the 340B ESP system is demonstrating the correct information, the covered entity will want to communicate with their third-party administrator(s) and wholesaler(s) to ensure they understand the pharmacies that have been designated for use. These partners will need to make sure any pharmacy or drug “blocks” are appropriately implemented or removed to facilitate 340B pricing. On a monthly basis, these partners will want to share what their current blocks are pertaining to 340B ESP and the manufacturer restrictions to ensure alignment.
Manufacturer Policy Changes and 340B ESP Updates
Any time a manufacturer releases a policy update, or a new manufacturer decides to impose restrictions, the covered entity will want to immediately log into 340B ESP and complete the Designation Review. A new designation may be required, or a designation may warrant an adjustment to ensure optimal savings occur. In rare instances, 340B ESP may make enhancements or communicate downtimes within their system. If the covered entity receives a communication from 340B ESP about this, the covered entity will want to log into 340B ESP and complete the Designation Review to ensure no designations were adjusted as a result. Regular monitoring of the 340B ESP system is critical to minimizing losses of savings with the 340B contract pharmacy program. For any additional assistance with ensuring optimal savings, which includes assessing the correct contract pharmacy opportunities and troubleshooting 340B ESP designating, please contact AuthorityRx.
Justin Ott is Principal, Account Management, Affiliate Solutions at AuthorityRx. He can be reached at Jott@authorityrx.com
