September 19, 2013—Only 56 of the roughly 2,000 hospitals enrolled in the 340B drug discount program did not recertify their eligibility by a Sept. 13 deadline and will be removed from the program effective Oct. 1, an analysis of the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) 340B covered entity database shows.[ms-protect-content id=”2799″]
The second annual recertification of 340B hospitals ended just before midnight last Friday. Hospitals had four weeks to certify that their information in the OPA database is correct and that they comply with all program requirements. The only hospitals excused were those with a known future termination date. HRSA adds and removes hospitals from the 340B program on the first day of each quarter.
The Drug Discount Monitor analysis of the OPA database found that a total of 89 hospitals will stop participating in 340B as of Oct. 1. This number reflects 340B “parent” sites only. In addition to the 56 hospitals that did not complete recertification, 17 are leaving 340B because their Medicare disproportionate share (DSH) adjustment percentage dropped. Twelve hospitals are withdrawing from the program voluntarily and HRSA categorizes four terminations as “other.”
Forty-seven hospital parent sites, meanwhile, are being added to the program on Oct. 1.
Hospitals being removed from 340B as of Oct. 1 may reapply during the next quarterly enrollment period, Oct. 1 – 15. If approved, they will become eligible again on Jan. 1, 2014.
Oct. 1 is also the effective date of HRSA’s 340B orphan drug exclusion regulation. It allows critical access hospitals, sole community hospitals, rural referral centers, and free-standing cancer hospitals to buy orphan drugs through 340B as long as they do not use the drugs to treat the rare diseases or conditions for which the drugs received their orphan designations. The rule does not exclude orphan drugs from 340B when they are used for other approved non-rare indications.
During the just concluded recertification period, these hospitals had to declare whether:
- they will buy their orphan drugs through 340B (in which case they must track usage by indication and keep auditable records to demonstrate their compliance); or
- if they cannot or choose not to keep such records, they will buy their orphan drugs outside of 340B regardless of the indications for which the drugs are used. Free-standing cancer hospitals choosing the latter option also had to attest that they will not use a group purchasing arrangement to buy such drugs.
The Monitor’s analysis shows that 530 rural and cancer hospital parent sites will buy their orphan drugs through 340B and 470 will buy theirs outside of the program. Hospitals subject to the orphan drug exclusion can change their 340B opt-in/opt-out status on a quarterly basis, with the change taking effect the start of the following quarter.[/ms-protect-content]