While most 340B covered entities do not share their contract pharmacy claims data with drug makers to restore access to 340B pricing, many would do so if the process was better and got 340B pricing turned back on reliably, a new survey by pharmaceutical distributor McKesson found.
Seventy-two percent of 340B covered entities said in the survey that they do not give their contract pharmacy drug claims data to a drug industry contractor to get 340B pricing back for certain manufacturers’ drugs if the entities want the products to be shipped to multiple contract pharmacies. Of these, however, only 37% were a hard no. Another 34% said either they definitely will report or are considering reporting data but that resources are a barrier.
Also, only 17% of the 28% of entities that said they share their claims data said they got pricing restored by all of the manufacturers demanding the data.
McKesson released the survey results this morning in its Prescribed Perspectives blog. It said it polled current and potential customers, most of them 340B managers or pharmacy executive leaders, “to learn more about the basis for each recipient’s decision about whether to share claims data” through drug industry vendor Second Sight Solutions’ 340B ESP platform. Because the survey was anonymous, McKesson said it did not know the proportions of hospital and non-hospital respondents. Because most of the reporting requirements target hospitals, it believes most of the responses came from hospitals.
Twenty-one manufacturers have imposed conditions on 340B pricing involving contract pharmacy since the summer of 2020. Most of them will ship orders to more than one contract pharmacy only if entities agree to upload their contract pharmacy claims data twice a month to 340B ESP. “Not all manufacturers use 340B ESP for exemption registration and data reporting which further confuses the restoration process,” McKesson noted.
The federal government has told several companies their policies are illegal. A federal appeals court ruled Jan. 30 that AstraZeneca, Novo Nordisk, and Sanofi’s restrictions on delivery to contract pharmacies do not violate the 340B statute. Two other federal appeals court are expected to rule soon on Lilly, Novartis, and United Therapeutics’ policies.
340B Report held a May 2022 webinar on entities’ challenges getting 340B pricing restored despite submitting claims data to 340B ESP. More than 800 persons registered to attend—a strong indicator of high demand for information on the process. In July 2022, 340B Report published a two-part investigative series on the difficulties and frustrations that 340B providers have experienced trying to obtain or restore access to discounts through 340B ESP.
“Pharmacy professionals do not agree on whether they should share their claims data to restore 340B discounts,” McKesson’s survey report said. “Our … survey starts there, with the understanding that the answer is far beyond a simple yes or no.” The survey asked entities how they approached deciding whether to share data, how they think the 340B drug pricing restoration process should work, and what roles channel partners should have in data reporting.
McKesson asked the 72% of respondents not reporting data to 340B ESP to elaborate on their decisions.
- Thirty-seven percent answered that they “definitely will not; we believe this is private data and are concerned with repercussions.
- Twenty-three percent said they were considering reporting data “but don’t have resources to start.”
- Twenty percent said they are “waiting for the court cases to be decided.”
- Eleven percent said they “definitely will and [are] just getting resources in line.”
- Nine percent said they will not because they are taking as much advantage as possible of manufacturers’ policy exemptions for wholly owned pharmacies.
McKesson asked respondents that are not reporting data but want to what resources they need. “The responses indicate that customers most need a basic education in how the restoration process works, with some wanting an automatic data submission tool from their third-party administrator,” the survey report said.
When the survey was fielded, 14 manufacturers allowed data submission for price restoration. McKesson asked the 28% of respondents that said that they are reporting data to 340B ESP how many of the 14 manufacturers had actually restored the entity’s pricing. Only 17% said all 14 manufacturers had restored pricing. Thirty-six percent said between nine and 12 had restored pricing, 22% said between 4 and eight, and 24% said fewer than four.
McKesson asked the respondents that are reporting data to 340B ESP about barriers to getting pricing restored. From a list of seven barriers, more than half picked both “wholesaler doesn’t provide price restoration data” and “workload/resources.” More than 40% picked both “lack of automation” and 340B ESP “is difficult to work with.”
McKesson said that in response to these findings “we created a tool that provides a comprehensive restoration grid. Available through the customer’s account executive, the grid includes all the covered entity’s contract pricing accounts, all manufacturers that have notified us to restore 340B pricing, and the effective date of restoration.”
The survey report includes McKesson’s recommendations for what 340B ESP, manufacturers, distributors, entities, TPAs, and contract pharmacies could do to make price restoration work more smoothly.
“The survey of our customers indicates that covered entities are struggling with the rules and nuances required for contract pharmacy price restoration,” McKesson said. “The varying policies for exemptions, restoration criteria and communication create a level of granular oversight that is unprecedented.”
Surprises from the Survey Results
McKesson Senior Managing Consultant 340B Solutions Heather Easterling, the survey’s architect, said one of the survey’s biggest surprises “may be that the hardest part of the price restoration process is not data reporting.”
“While reporting is a complicated and manual process it is a relatively straightforward first step,” she said. “The problem is how to actualize the restoration once they’re eligible again—what are the key steps for tracking, managing, and monitoring purchasing and how best to work with their TPA, their contract pharmacy partner and their distributor.”
“The other surprise is how long the restoration process takes,” Easterling continued. “Despite the fact that many respondents were sharing data and had been sharing data for several months, they were reporting that less than 50% of their revenue had been restored.”
“The biggest lesson I hope stakeholders take away from our findings is that restoration needs to be a thoughtful process that involves all your partners,” Easterling said. “That includes the covered entity, retail pharmacy partner, distributor, third-party administrator, and importantly the manufacturer. Stakeholders need to make sure that everything is aligned and functioning properly, so you don’t create issues with inventory, cash flow, or even patient care. It’s also important to consider the impact on all parties. Communicate with all parties to ensure the sequence of events is timed appropriately and there’s proper oversight and monitoring.”
“The key to making data reporting and price restoration more workable is the capability of your partners,” said McKesson Vice President 340B Solutions Andrew Wilson. “Specifically, can they manage the required workload? Can they provide visibility on which manufacturers have restored pricing for which pharmacies and when? Which further complicates the purchasing process.”