HRSA Setting 60-Day Comment Period for 340B Mega-Reg

by admin | April 2, 2014 2:21 pm

April 2, 2014—Stakeholders will have 60 days to comment on the proposed 340B “mega-reg”[1] that is still on track to be published in June, Office of Pharmacy Affairs Director Cmdr. Krista Pedley said at a drug industry conference last week.[ms-protect-content id=”2799″]

In remarks at the annual Government Programs Summit for drug manufacturers’ government contract specialists, Pedley also said the Health Resources and Services Administration would consider letting drugmakers audit 340B providers at random if it were to receive such a request during the mega-reg comment period.

Responding to a question, Pedley noted that current guidelines allow manufacturers to audit providers only when drugmakers can establish reasonable cause to believe that a provider diverted drugs to ineligible patients or caused a Medicaid rebate to be generated for a drug on which a 340B discount was provided. However, she continued, HRSA is “considering everything at this point” as it develops its wide-ranging 340B regulation and “many, many manufacturers” have raised the random audit issue with the agency. “So yes, we would consider it,” she said. “We need to make sure we get comments from you in that area.”

Speaking separately last week at the American Pharmacists Association annual meeting in Florida, OPA Deputy Director Michelle Herzog reported that OPA has received nine audit work plans from manufacturers so far. It has allowed eight audits by manufacturers to move forward and has received seven final audit reports.

Herzog also reported that HRSA has commenced 62 of its own covered entity audits so far in fiscal year 2014 and completed the onsite portion in 40. HRSA has not said how many providers it plans to audit this fiscal year, which ends on Sept. 30. HRSA audited 51 covered entities in fiscal 2012[2] and 94 in fiscal 2013[3].

Congress boosted OPA’s appropriation from $4.4 million in fiscal 2013 to $10.2 million this fiscal year. The Obama administration is seeking $17 million[4] for the 340B drug discount program in fiscal 2015, consisting of $10 million in appropriated funds and $7 million from a 0.1 percent user fee on 340B drug purchases.

HRSA plans to use part of that additional money to increase the number of audits it conducts in fiscal 2015. Pedley said many people ask why the final audit summaries appear to show a high rate of noncompliance. “I caution you in that area,” she told the assembled drug manufacturer representatives. “We chose these entities based on risk factors. It shows us that our risk-based strategy is working and we’re picking the right people to look at.”

Although HRSA has audited just over 200 340B providers thus far, “the sentinel effect is greater,” Pedley continued. “The sheer fact that entities know that we’re doing a risk-based approach, and it’s random and they can be picked at any time, it is showing us that entities really want to work to get it right,” she explained. “We believe this is automatically improving integrity out there.”

Other highlights from Pedley’s remarks:

• OPA plans to use part of its funding increase to automate many aspects of 340B covered entity enrollment now done manually by HRSA staff. It also wants to automate the collection and archiving of covered entity compliance information gathered during initial enrollment, recertification, audits, and self-disclosure. “This is going to help us put in an early-warning system and give us live access to information right when we need it,” Pedley said.
• HRSA is adding 340B compliance elements to its grantee site visits. Grant recipients’ responses “will serve as trigger elements for us to know who we need to look at” more closely, Pedley said.
• As previously reported[5], Pedley said that, in addition to the 340B mega-reg, HRSA will propose regulations to impose fines on drugmakers for knowing and intentional overcharges and fines on safety-net providers for knowing and intentional program violations. HRSA said last month that it will also propose a regulation to create a mandatory administrative dispute resolution process for 340B.
• Pedley also repeated that (1) HRSA is conducting its first audit of a drug manufacturer; (2) is going to begin verifying the accuracy of 340B ceiling prices and making those prices available to providers via a secure website; (3) is going to begin spot checking 340B sales transactions; (4) and is going to begin running 340B pricing discrepancy reports.
• In response to questions, Pedley said (1) HRSA does not have a policy limiting how far back in time a manufacturer can audit a covered entity; (2) HRSA is “moving forward” to establish procedures for manufacturers to issue refunds to covered entities in the event of an overcharge, and will be providing more guidance on covered entity repayments to manufacturers; (3) HRSA lacks authority to oversee 340B split-billing software companies and other third-party vendors; (4) if Congress approves a 340B user fee, it would “probably take at least a year” for HRSA to develop and test it before implementation.[/ms-protect-content]

Source URL: https://340bemployed.org/hrsa-setting-60-day-comment-period-for-340b-mega-reg/

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