February 1, 2013—Six Republican members of Congress asked the Health Resources and Services Administration (HRSA) late yesterday for details about its audits and recertification of 340B covered entities.
In a Jan. 31 letter, the lawmakers—Sens. Chuck Grassley (Iowa), Orrin Hatch (Utah), Lamar Alexander (Tenn.) and Michael Enzi (Wyo.) and Reps. Joe Pitts (Pa.) and Bill Cassidy (La.)—asked HRSA Administrator Mary Wakefield to respond in writing to a series of questions by Feb. 14.[ms-protect-content id=”2799″]
A HRSA spokesperson said this morning that the agency does not comment on congressional correspondence.
Regarding the audits, the senators and congressmen are seeking:
- A list of the 51 covered entities that HRSA chose for risk-based and targeted audits last fiscal year.
- The criteria HRSA used in selecting entities for targeted audits.
- HRSA’s timeframe for completing the audits.
- Copies of the questions asked and document requests made by HRSA of each covered entity.
- A detailed description of the status of each audit, including whether additional information needs to be obtained and what such outstanding information is; the findings of each audit as each one is completed; and what, if any, corrective action HRSA must take in ensuring the proper compliance of each audited covered entity.
On the matter of recertification, they are seeking:
- A list of all decertified covered entities, including the cause for decertification; the length of time each covered entity was ineligible before being decertified; whether these covered entities were continuing to purchase at 340B prices from manufacturers while they should have been ineligible.
- HRSA’s plans for recoupment of any 340B discounts achieved by covered entities during periods of ineligibility.
- A description of what, if any, legal action will be taken against covered entities that continued to receive 340B discounts while ineligible for the program; and if no legal action will be taken, an explanation of why not.
The lawmakers pointed out that HRSA had not conducted a program integrity audit prior to 2012 and “failed to engage in a recertification process for covered entities” for 20 years.
“By its inaction, HRSA essentially turned a blind eye to entities who no longer should have been participating in the 340B program, allowing them to improperly reap the benefits of deeply discounted 340B drugs,” they asserted.
At a meeting of 340B stakeholders in San Francisco last week, Office of Pharmacy Affairs (OPA) Director Cmdr. Krista Pedley, speaking via an audiovisual feed from Rockville, Md., said HRSA was still working on many of the 2012 audits. In previous public comments, she explained the process is slow, in part, due to the program’s prior dependence on guidance rather than formal regulation.
During last week’s meeting, Pedley said HRSA plans to notify manufacturers when specific audit reports are final so they can “take appropriate next steps.” She indicated that, instead of releasing all 51 final reports to the public, HRSA plans to issue the findings in aggregated form as a teaching tool.
Pedley said that following the recertification of 340B hospitals last year, OPA decertified 271 child sites belonging to 85 parent hospitals, many of these at the hospitals’ request. A substantial number of these decertified sites are believed to be hospital pharmacies that hospitals asked OPA to reclassify as “ship to/bill to” addresses pursuant to OPA’s own instructions.
According to Pedley, three of the 85 hospitals that had sites decertified are making repayments to drug manufacturers because they received 340B discounts for which they were ineligible. OPA, she said, is following up with the remaining hospitals to determine if any others need to make repayments.
Safety Net Hospitals for Pharmaceutical Access (SNHPA), which represents hospitals enrolled in the drug discount program, issued a statement today supporting 340B recertification and audits to maintain compliance within the program. Clearer guidance from HRSA on the 340B definition of patient and the prohibition against certain 340B hospitals using group purchasing organizations “would go far in streamlining the audit process,” the group said.
SNHPA also observed that many 340B program integrity initiatives enacted by Congress still have not been implemented, including improved transparency of 340B prices, selective auditing of manufacturers, and establishment of a meaningful dispute resolution process.[/ms-protect-content]