Insights

The 340B Drug Pricing Program has served an important purpose for decades, helping hospitals and other covered entities receive discounted prices on drugs for vulnerable, underserved populations. 340B not only provides these groups with a discounted price for important drugs, but it also helps covered entities manage rising prescription drug costs.

The list of covered entities capable of registration for the 340B program includes six categories of hospitals and 10 categories of non-hospitals as listed below.

• Hospitals
  • Disproportionate share hospitals
  • Children’s hospitals and cancer hospitals exempt from the Medicare prospective payment system
  • Sole community hospitals
  • Rural referral centers
  • Critical access hospitals
• Non-hospitals
  • Federally qualified health centers (FQHCs)
  • FQHC “lookalikes”
  • State-operated AIDS drug assistance programs
  • Ryan White Comprehensive AIDS Resources Emergency (CARE) Act clinics and programs
  • Tuberculosis clinics
  • Black lung clinics
  • Title X family planning clinics
  • Sexually transmitted disease clinics
  • Hemophilia treatment centers
  • Urban Indian clinics
  • Native Hawaiian health centers

As important as 340B is and continues to be for these organizations, it has come under fire in recent years, primarily by drug manufacturers. This has forced covered entities to make tough decisions as it pertains to submitting 340B contract pharmacy claims data. Here is a closer look at the issue and what it ultimately means for covered entities today.

340B pushback from drug manufacturers

Over the past few years, drug companies have started pushing back on 340B by putting restrictions and conditions in place that threaten to dismantle the program and that are causing significant financial losses to covered entities with contract pharmacy relationships.

One of these conditions is for covered entities to submit their 340B contract pharmacy claims data to drug companies through a third-party contractor called ESP. The primary goal of this data submission is to eliminate duplicate discounts for 340B drugs.

Given that a covered entity may buy drugs at a discounted rate and dispense those products to a patient that does not qualify, it is critical to manage the duplicate discount prohibition. ESP provides one avenue that several manufacturers appear to feel confident with.

How does ESP work?

Independently, State Medicaid programs and pharmaceutical manufacturers lack the information necessary to resolve duplicate discounts. 340B ESP provides a secure and easy-to-use platform for 340B covered entities and pharmaceutical manufacturers to work together to resolve duplicate discounts without the hassle of ongoing dispute resolution.

Once submitted, ESP will take all your data and submit it to the pharmaceutical manufacturer on your behalf. 340B ESP enables covered entities to upload de-identified 340B claims data linked to Medicaid and commercial rebate data provided by pharmaceutical manufacturers to identify duplicate discounts.

A large number of covered entities resisted ESP for some time but are now beginning to see it as a temporary resolution – while still remaining hopeful that these manufacturer restrictions are eventually considered unlawful/illegal and are ultimately reversed.

What this means for you

HRSA wants to ensure hospitals and covered entities are providing discounts only to patients that meet the definition of 340B eligibility. This leaves these organizations with essentially two choices:

1. Submit data to ESP to open up restricted contract pharmacy networks.
2. Do not submit data to ESP.

If you decide to submit data to ESP, Visante can work closely with you to make the process simpler and more efficient. If you decide not to submit to ESP, Visante can still work with you to find other ways to optimize your 340B program.

Visante is here to help

Visante works with all types of covered entities to support them in making the most of their 340B program while avoiding duplicate discounts. We routinely perform external audits to identify compliance gaps and also provide internal oversight for organizations that need dedicated resource support.

Contact us today to learn more about making the right decisions for the future of your 340B program.