For decades, the 340B drug pricing program has served an important purpose by helping hospitals and other covered entities receive discounted prices on drugs to offset care provided to vulnerable, underserved populations.
But over the past several years, drug companies have started pushing back on the 340B program by putting restrictions and conditions in place that have threatened to dismantle it altogether. These restrictions are causing significant financial losses for covered entities with contract pharmacy relationships.
One such condition has been for covered entities to submit their 340B contract pharmacy claims data to drug companies through a third-party contractor called ESP. The goal was to provide a secure and easy-to-use platform for 340B covered entities (CEs) and pharmaceutical manufacturers to work together to resolve duplicate discounts. Ideally, the CEs submit their claims data, ESP takes the data and submits it to the manufacturer, and pricing is restored to the covered entity. This has also given CEs the hope that manufacturer inquiries and audits would decrease (or go away altogether) for manufacturers that participate in ESP, given they are receiving all the necessary details related to the 340B dispense on the front end.
Since this structure was put in place, large numbers of CEs have begun submitting data to ESP in an effort to regain some of the past two years’ lost revenue. The process was said to be simple, straightforward, and efficient – but the reality has been quite the opposite.
ESP Submission Challenges
Under the ESP setup, it is supposed to provide general information regarding the “restoration of 340B pricing within 10 business days,” but this has been a gross understatement compared to the actual amount of time it has taken for CEs to see pricing restored. This is not the fault of only ESP, but all the parties necessary to restore pricing in a timely manner.
The entire process of pricing restoration is dependent on the wholesaler, manufacturer, and TPA communication, and it is often taking 12 weeks or more for CEs to see pricing restored. There is also tremendous effort involved in managing communication to keep the process moving forward.
Combine this with the fact that pricing is not restored all at once but rather manufacturer-by-manufacturer, and the process slows down even further. Meanwhile, CEs need to allocate additional resources to manage additional requests and track the delays. Manufacturer lookback dates also vary by manufacturer, making data retrieval and submission even more challenging.
Factors of ESP Submission Challenges
So what is ultimately causing these challenges? There are a number of factors at play.
First is the volume of submissions, as so much data is being submitted that ESP simply cannot keep up with its proposed timeline. But this is partly due to the fact that there is little effort being made to escalate or fast-track communications, largely on the part of wholesalers and manufacturers. CEs are continually reaching out to wholesalers that do not show a congruent level of urgency.
The manufacturers and wholesalers are simply not as incentivized financially to speed up the process, which is undoubtedly a root cause of the issue.
What Covered Entities Can Do
While the team at Visante has witnessed dozens of success stories from CEs seeing pricing restored several months post-submission, it has not come without its challenges. It is important for CEs to appoint appropriate resources and time to allow the ongoing communication and research necessary for pricing to be restored in a timely manner.
While many contract pharmacy chains early on had not allowed their CE partners to share data with ESP, this has largely been reversed. However, there are still several chains that are not allowing CEs to share data with ESP, with the warning that doing so would be a violation of their existing contract and relationship. This leaves these 340B providers in a vulnerable position and continues to fragment their data submission process and the ability to regain lost revenue.
Visante continues to encourage TPAs to develop standard reporting for their CEs to use to allow for easier data extraction, analysis, and submission. While several vendors have made progress in this regard over the last several months, there are still several TPA vendors that are lagging, creating work around processes for CEs that are both time consuming and inefficient.
For CEs that have been without contract pharmacy revenue for some time and have recently made a decision to proceed with ESP, these wrinkles create an additional challenge after years of uncertainty and revenue loss.
How Visante Can Help
In the face of these challenges, many covered entities are left wondering how to communicate and whom to communicate with. Many lack the resources to perform the follow-up necessary to see their pricing restored.
Visante can provide resource support, working with all types of CE’s, and can help open the lines of communication, extending the bandwidth of CEs’ internal teams while leveraging industry connections to help make follow-up more effective.
Kristin Fox-Smith is Visante’s Senior Vice President for the Hospital and Health System Services Division, and a 340B ACE. She can be reached at firstname.lastname@example.org