OPA Focusing on 340B Drug Pricing Transparency and Accuracy

by admin | February 7, 2014 2:33 pm

February 7, 2014—The Health Resources and Services (HRSA) Office of Pharmacy Affairs (OPA) is developing ways to improve 340B pricing transparency and accuracy by drug manufacturers, OPA Director Cmdr. Krista Pedley said yesterday during the 340B Coalition winter conference in San Diego. Pedley addressed the gathering of more than 900 stakeholders remotely from HRSA headquarters in suburban Washington.[ms-protect-content id=”2799″]

Pedley also elaborated on the memo she posted on the OPA website yesterday morning in response to the Health and Human Services Office of Inspector General (OIG) report on 340B contract pharmacy[1]. She also touched on OPA’s ongoing audits of 340B covered entities and on HRSA’s forthcoming comprehensive 340B regulation.

Last month, Congress more than doubled OPA’s appropriation[2], from $4.4 million to $10.2 million, and instructed the agency to report back by March about how it would use the extra money to implement OIG and Government Accountability Office recommendations on improving 340B program oversight.

The Affordable Care Act (ACA) contained several integrity provisions geared toward manufacturers that grew out of a series of OIG reports in the mid 2000s on manufacturer overcharging of 340B entities. They include:

• a system to verify the accuracy of 340B ceiling prices calculated by manufacturers, including spot checks of sales transactions;
• giving providers access to federally verified 340B ceiling prices via a secure page on the OPA website;
• selective audits of manufacturers and wholesalers;
• civil monetary penalties for manufacturer overcharges;
• 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.

HRSA had declined to implement these requirements, saying Congress did not provide it with the funding to do so.

“From a program integrity standpoint, manufacturer participation in the program carries a relatively low level of risk” of noncompliance, Pedley said. Their only obligation is to provide covered outpatient drugs to covered entities at no greater than the statutorily defined ceiling price, which is “very different than all the requirements on the covered entity,” she said. It is important to note, she said, that it is in a manufacturer’s best interest to report their products’ average manufacturer prices correctly to CMS because misreporting can expose them to False Claims Act liability and can have negative implications for other government drug pricing programs such as Medicaid.

Pedley listed several ways that OPA is currently overseeing manufacturers’ program compliance:

• HRSA recently commenced its first audit of a drugmaker.
• OPA reviews all pricing discrepancies brought to its attention by covered entities. In cases where the ceiling price appears to have been violated, she said covered entities “are provided with details necessary to work out any discrepancies with manufacturers directly.”
• HRSA validates 340B ceiling prices by using package size data obtained from a contractor, First Databank.
• Approximately 100 drug manufacturers voluntarily submit quarterly price files to HRSA, which archives the files and spot checks them for compliance.
• The 340B prime vendor has agreements with a number of manufacturers to share ceiling prices on a secure website for 340B covered entities to view and verify pricing. Pedley said “through a mechanism created in September of 2013, HRSA also has greater visibility to the prime vendor data that can be utilized to write pricing discrepancy reports by comparing the calculated ceiling price by HRSA with the manufacturer reported prices to the wholesalers. We’re in the process of establishing the mechanism to prepare quarterly pricing discrepancy reports based off of this data.”
• HRSA issues guidance and policy briefs specific to manufacturers.
• HRSA verify quarterly that manufacturers beginning to participate in Medicaid sign a 340B pharmaceutical pricing agreement with HRSA.
• HRSA requires manufacturers to give refunds and credits when a covered entity has been overcharged and requires this information to be publicly posted on the OPA website.

With respect to the additional funding from Congress, Pedley said OPA is “working right now to form a balanced plan” for covered entity and manufacturer program oversight.[/ms-protect-content]

Source URL: https://340bemployed.org/opa-focusing-on-340b-drug-pricing-transparency-and-accuracy/

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