September 24, 2014—Medicaid expansion in general and Medicaid managed care growth in particular have drug manufacturers concentrating on 340B duplicate discounts as never before. [ms-protect-content id=”2799″] That was one of the big takeaways from the annual Medicaid Drug Rebate Program Summit in Chicago last week.
MDRP is a major annual drug industry meeting on Medicaid rebates, 340B, Medicare Part D, and Veterans Affairs drug pricing. Over the years, the conference has paid more attention to 340B, to the point that the program is beginning to rival Medicaid rebates as its main focus.
About a half-dozen sessions at MDRP this year dealt with the intersection between Medicaid managed care and 340B. As drug industry consultant Romit Kamdar explained during one session, manufacturer interest has risen given that 340B has expanded, half of all Medicaid-reimbursed drug utilization is going through managed care, and 75 percent of all Medicaid enrollees are in managed care plans.
Kamdar also cited remarks at July’s 340B Coalition Conference by a senior Center for Medicare & Medicaid Services pharmacy official. The CMS official spoke about the absence of federal oversight regarding 340B Medicaid managed care drugs. The official also indicated it is incumbent on states and managed care plans to make sure that 340B claims are exempt from Medicaid managed care rebate requests.
Kamdar and his co-presenter, attorney John Gould of Arnold & Porter, advised manufacturers to engage with 340B covered entities informally to get a better handle on their 340B compliance practices and, if relevant, to discuss data indicating that duplicate discounts might have been paid.
During a second, related session, Kathleen Black of drug manufacturer Pfizer and Aaron Vandervelde of Berkeley Research Group gave advice on how manufacturers can use their own internal information to explore 340B compliance.
“Managed Medicaid patients are difficult for some hospitals to identify. From a hospitals’ perspective, they’re almost commercial patients,” Vandervelde noted.
Compliance for managed Medicaid patients can be particularly challenging for 340B covered entities, he continued. “It can be as simple as missing [an identification] number for a managed Medicaid plan, and as a result, 100 percent of those members are going through 340B contract pharmacies and creating duplicate discounts,” he said.
Among other data mining techniques, Vandervelde advised manufacturers:
- scrub state-level Medicaid data for rebate requests arising from 340B covered entities that have said they carve Medicaid in.
- with entities that carve Medicaid out, to look back to see if their 340B utilization declined after 2010, the year that states were first able to collect Medicaid rebates on managed care drugs.
Black, director of government strategy for Pfizer, added that CMS has been seeking input from manufacturers about “how to make this duplicate discount in managed Medicaid process more transparent, to enable the states to take responsibility in assisting covered entities with their obligation not to do a double dip.”
“The CMS Medicaid office has supported the fact that covered entities alone cannot completely eliminate double dipping and state Medicaid agencies have to work with them,” she said. [/ms-protect-content]