November 8, 2013—Drug manufacturers have completed six federally authorized audits of 340B covered entities and government officials are following up with the entities involved to determine what comes next.[ms-protect-content id=”2799″]
The Health Resources and Services Administration (HRSA) provided the status update on 340B audits by manufacturers in response to a Drug Discount Monitor request. A seventh manufacturer audit of a 340B provider is in progress, the agency said.
HRSA said it “is unable to comment on the findings or corrective actions in the manufacturer audits.”
“HRSA is in the process of following up with the covered entities audited by manufacturers to determine next steps,” it said.
HRSA reported in July that it had given the green light to six manufacturer audits, three of which it had received and was reviewing. Genentech and Eli Lilly & Co. are the only two pharmaceutical companies that have publicly stated they are conducting official audits of 340B health care providers.
The 340B statute lets manufacturers audit covered entities to determine if they are complying with program prohibitions against the diversion of drugs to ineligible patients and the payment of 340B discounts on drugs subject to a Medicaid rebate. The manufacturer must have documentation indicating there is reasonable cause to believe a violation has occurred. Under federal guidelines, manufacturers must submit audit work plans to HRSA for review at least 45 days in advance of conducting an audit of a covered entity. HRSA must respond within 15 calendar days with an approval or denial of the submitted work plan. Covered entities must be informed at least 15 days in advance of a manufacturer audit. The parties may file a request for dispute resolution with HRSA if a disagreement arises over the audit findings.
HRSA itself audited 94 covered entities during fiscal year 2013, which ended on Sept. 30, and 51 entities during fiscal 2012. Earlier this week, it released summaries of its preliminary findings in seven more of those 2012 audits, raising the total number of summaries released to 49.
HRSA said it has not yet determined how many audits it will conduct in the current fiscal year. It said is “has begun engaging covered entities in the audit process” since fiscal 2014 began on Oct. 1 but has “not yet completed the onsite portion of the audit for any covered entity at this time.” A number of covered entities have already been notified that they will be audited.[/ms-protect-content]