B & Prime Vendor Program Update
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1 B & Prime Vendor Program Update Christopher A. Hatwig, R.Ph., MS, FASHP President, Apexus
2 340B Sales by Entity Types Percentage of Total Apexus Participant Sales 90.00% 80.00% 70.00% 60.00% 50.00% % of Total Sales Hospital 81.14% 40.00% 13% 30.00% 20.00% 10.00% 0.00% 0.40% 1.79% Free-Standing Cancer (CAN) Children's Hospitals (PED) 3.29% Rural Hospitals (CAH/RRC/SCH) DSH 87% 7.00% 6.00% 5.00% 4.00% % of Total Sales Non-Hospital 5.83% 5.85% 3.00% Hospital Non-Hospital 2.00% 1.00% 0.00% 0.11% 0.56% 1.03% HM STD/TB Title X (FP) Ryan White (HV) FQHC 2
3 GPO Prohibition Established in original 340B legislation in 1992 Prevents GPO use for Covered Outpatient Drugs Applies to Disproportionate Share Children s Hospitals Free Standing Cancer Hospitals Such hospitals...will not participate in a group purchasing organization or group purchasing arrangement for covered outpatient drugs as of the date of this listing on the OPA website. Release clarifying OPA Policy February 23, 2013 letter of GPO Prohibition enforcement by HRSA Hospitals must be compliant effective August 7,
4 GPO Prohibition Clarification Purchase Flow for Most Hospitals Non-compliant State Compliant State 340B All Other (Default to GPO) 340B Registered Hospital Inpatient or Non-Covered Drugs (GPO) 340B All Other Out- Patient Covered Drugs (Default to Non-GPO Account) 4
5 How does the Medicaid Exclusion File work? 340B Discount Entity State Medicaid Exclusion File Medicaid Rebate Manufacturer 2014 Apexus. Reproduction without permission is prohibited. 5
6 Medicaid Update Simple goal prevent duplicate discounts Challenges for a solution coordination of HRSA, states and CMS Marketplace alternatives to the HRSA Medicaid Exclusion File (ex. NCPDP standards, UD modifiers) State policy is variable and sometimes not informed States refuse to use the Medicaid Exclusion File States require entities to share any 340B refund payments from manufacturers (from years ago) States require entities to self-audit for use of non-covered outpatient drugs in the past Apexus has contributed by providing education to states 340B U for State Medicaid Pharmacy Directors (August 2014) Discussions regarding fair reimbursement models 6
7 HRSA Activity Expected in 2015 Increase the number of audits Covered entity audits focus on diversion, duplicate discounts, and GPO prohibition (for DSH, CAN and PED) Manufacturer audits (OIG report pending) Publish Mega-guidance (summer 2015) Regulations Civil-monetary penalties Administrative dispute resolution Drug pricing Focus on Medicaid Exclusion File/policy (modernize) Continue working toward publishing 340B ceiling prices
8 HRSA Audits by the Numbers Number of covered entities audited FY 2012 FY 2013 FY 2014 FY 2015* (As of 1/13/15) Outpatient facilities/sub-grantees , Contract pharmacies , Number of finalized reports
9 Orphan Drug Update Chaotic marketplace Wholesalers are at financial risk between the manufacturers and hospitals; some are more conservative and have decided to block all sales and manage the manufacturers products that agreed to sell as an exception HRSA wrote letters of inquiry to all companies for which complaints of not offering 340B prices on orphan drugs were received Of the 27 companies that had orphan drugs, 14 are offering 340B pricing and 13 are not Feb 4 th - HRSA posted the names of the manufacturers not offering 340B pricing on their website
10 HRSA S 340B PRIME VENDOR PROGRAM (340B PVP) APEXUS
11 Apexus Programs Supporting HRSA and 340B Stakeholders CONTRACTING ASSISTANCE EDUCATION Brand and Generic Rx Pricing Wholesaler Networks Apexus Answers Call Center 340B University & 340B OnDemand
12 Benefits of the 340B PVP to Covered Entities Sub-340B and Sub-WAC pricing on outpatient pharmaceuticals Discounts on value added products, services, and supplies Apexus Manufacturer Refund Service Pricing transparency Distribution solutions 340B Education and compliance support
13 Benefits of 340B PVP to Pharmaceutical Manufacturers Aggregator of outpatient purchasing in the 340B space Works closely with HRSA under an exclusive agreement; successful track record (10 years) Understands government rules, drug pricing, contracting, and the unique needs of both covered entities and manufacturers Extend full price protections on all sales to participating covered entities Provides a single point of entry into a complex market for outpatient pharmaceuticals
14 Prime Vendor Pricing Comparison Adapted from a slide by Safety Net Hospitals for Pharmaceutical Access Source: Data derived from Prices for Brand-Name Drugs Under Selected Federal Programs, Congressional Budget Office
15 Minimizing WAC Expense Apexus team is working to identify and share leading practices used by entities to minimize WAC expense Large variances among participants Analyzing data by split-billing vendor Strategies: minimizing lost charges, determining a policy for expired medications, evaluating Medicaid carve-out status, and identifying GPO only areas Apexus contracting team has worked to provide value by contracting for sub-wac pricing, in ,508 products on non-gpo/wac contracts
16 Look Familiar?
17 Assistance/Education EDUCATION APEXUS ANSWERS Developed to support integrity provisions Inaugurated September Graduates: > 2,000 Sessions in 2015: 10+ Diversity of stakeholders Critical HRSA need Launched: October 1, 2012 HRSA-approved answers Hours of operation: Mon-Fri 8:00 AM 5:00 PM CST
18 Apexus Answers: Hot Topics Mega-guidance, summer 2015 GPO Prohibition: Split-billing software configuration/malfunction, minimizing WAC spend Defining material breach of non-compliance 340B Contract pharmacy attempting to manage repayment/credits on behalf of entity (manufacturer wonders Why is this pharmacy mailing me a check? ) Instead of repayment or credit-rebill, some entities opt to adjust future purchasing to correct past mistakes Interpretation of covered outpatient drugs Inquiries regarding orphan drugs 19
19 340B University: Top Compliance- Focused Tools B independent audit RFP checklist (new) 2. Split-billing tool (new) 3. Self-disclosure tool 4. Sample self-audit guides 5. Sample SOPs Tools: 20
20 Level 1 Level 2 Level 3 Apexus Certificate Program -Curriculum Structure & Audience Open Course Application Certificate Master Certificate Overview of foundational 340B knowledge Application in 340B operational integrity Policy to practice compliance interpretation 21
21 Focus for 2015 Grow sub-340b portfolio savings value Continue to build out portfolio of sub-wac pricing to minimize WAC expenditures and support participants in optimizing Maintain high customer satisfaction and call center ratings Advance manufacturer refund program through strategic partnerships Implement specialty pharmacy solution to support participants access to product and 340B pricing Expand education offerings for advanced training and certification
22 ENVIRONMENTAL SCAN, ONGOING CHALLENGES, & PREDICTIONS 23
23 340B Environmental Scan Manufacturers support opening 340B statute, scrutinizing hospital eligibility criteria Republican control of Senate and retirement of 340B-supportive legislators change environment for 340B Orphan drug lawsuit is expected to have final briefs due in March 2015 GAO and OIG have 340B reports underway (Medicare) Reimbursement challenges with payers and Medicaid will increase
24 340B Intent To permit covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. H.R. Rep. No (II), at 12 (1992)
25 Ongoing Points of Dispute Is the intent of 340B for the entity, the patient, or both? Should hospital eligibility criteria (DSH %) be revisited? Do contract pharmacies need to be limited in some way? Should program be limited to the uninsured? What should be done to modernize the HRSA Medicaid Exclusion File? Does HRSA have the authority to issue regulations?
26 Questions?
27 Contact Information Apexus Answers: M-F 8:00-5:00 PM CT Website:
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