OIG Is Working on Three 340B Studies

by admin | February 3, 2014 1:27 pm

February 3, 2014—The Department of Health and Human Services Office of Inspector General (OIG) plans to issue three important studies about the 340B program by this fall on contract pharmacy, overcharging by drug manufacturers, and passing savings along to Medicare. [ms-protect-content id=”2799″]

OIG announced the studies in its annual work plan, released late on Jan. 31. During the 340B Coalition winter conference in San Diego later this week, OIG is giving a presentation about its forthcoming study examining the extent to which selected 340B covered entities and the Health Resources and Services Administration (HRSA) oversee contract pharmacies’ compliance with 340B program requirements. It could release the full study as early as this week.

Covered entities have been able to contract with more than one outside pharmacy site since 2010. Drug manufacturers and others seeking to scale back 340B often express concerns about the growth of contract pharmacy arrangements. In a statement last month about its audits of covered entities, HRSA’s Office of Pharmacy Affairs (OPA) reported that only “a small minority of covered entities (18 percent) contract with pharmacies to dispense … discounted drugs to eligible patients, and of those, 75 percent use fewer than five contract pharmacy arrangements.” Last August, Sen. Charles Grassley asked Walgreens for detailed information about its participation in the 340B program as contract pharmacies, including its financial arrangements with covered entities.

OIG also said it will report this year on “what obstacles HRSA faces” in implementing an Affordable Care Act directive to give 340B covered entities access to 340B ceiling prices via a secure page on the OPA website. The same study will “determine whether drug manufacturers are overcharging 340B covered entities.” 

OIG issued a series of reports and findings in the mid-2000s on drug industry overcharging of 340B providers, including the recommendation that HRSA give providers access to federally verified 340B ceiling prices through the OPA website. Congress codified OIG’s recommendations into the Affordable Care Act’s 340B manufacturer compliance section. In addition to the recommendation about access to ceiling prices, they include:

• selective audits of manufacturers and wholesalers;
• civil monetary penalties for manufacturer overcharges;
• a system to verify the accuracy of 340B ceiling prices calculated by manufacturers, including spot checks of sales transactions;
• procedures for manufacturers to issue refunds to covered entities for overcharges, including an explanation of how the overcharge occurred and how the refund was calculated; and
• procedures for manufacturers to give covered entities refunds in cases where discounts a manufacturer gave to other purchasers subsequent to sales to covered entities have the effect of lowering the applicable 340B ceiling price.

ACA also requires OPA to establish a mandatory, binding system to resolve disputes between 340B providers and drug manufacturers.

Congress recently gave OPA a $10.2 million appropriation for fiscal year 2014, including about $6 million in new funds[1] to implement OIG and Government Accountability Office program integrity recommendations.

Last week, OPA told a drug industry newsletter that it has commenced its first audit of a drug manufacturer for compliance with program requirements. OPA has audited about 175 covered entities since 2012.

The third OIG’s 340B study this year will determine how much Medicare Part B spending could be reduced if Medicare were able to share in the savings for 340B-purchased drugs. A drug manufacturer has floated a proposal in Congress to require 340B hospitals to pass all of their 340B savings along to Medicare. Hospital groups say many hospitals would drop out of 340B if this were to occur because the costs of participation would outweigh the benefits. [/ms-protect-content]

 

 

 

Source URL: https://340bemployed.org/oig-is-working-on-three-340b-studies/

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