Transcript Safety net hospitals for pharma access

by
Bill von Oehsen
President and General Counsel
Safety Net Hospitals for Pharmaceutical Access
12th Annual 340B Coalition Conference
July 16, 2008
Washington, DC
Disclaimer

This presentation contains my personal views on
the subject and is not to be construed or relied on
as legal advice
Safety Net Hospitals for Pharmaceutical Access
202-552-5850
Bill von Oehsen
[email protected]
Overview

Three basic compliance areas related to 340B
program:
1. Prohibition against manufacturers overcharging
covered entities
2. Covered entity compliance with anti-diversion
requirements
3. Covered entity and state compliance with duplicate
discount/Medicaid billing restrictions
Safety Net Hospitals for Pharmaceutical Access
202-552-5850
Bill von Oehsen
[email protected]
Overcharging
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According to an October 2005 OIG report, one out of seven
purchases through the 340B program involved overcharging
covered entities
Enforcement actions against manufacturers for overcharging
have been virtually non-existent except in instances when
340B recoveries are included in federal and state efforts to
recoup Medicaid overpayments for best price violations
Although federal and state authorities should continue to
include 340B in their Medicaid best price investigations and
enforcement actions, other measures are necessary to remedy
or prevent 340B overcharging
Safety Net Hospitals for Pharmaceutical Access
202-552-5850
Bill von Oehsen
[email protected]
Overcharging (cont’d)

Measures recommended by OIG and others:
 Federal monitoring and verification of 340B pricing
 Ceiling price transparency
Leg
Leg
 Increased frequency and regularity of federal audits
Leg
 Guidance on how covered entities can recoup overpayments to
Leg
manufacturers
 More meaningful penalties against manufacturers; current
enforcement mechanism – exclusion from Medicaid coverage –
is not practical
Leg
 Although product shortages is a legitimate reason for rationing
340B drugs, it is not a legitimate reason for charging above
ceiling prices
Leg
Safety Net Hospitals for Pharmaceutical Access
202-552-5850
Bill von Oehsen
[email protected]
Manufacturer
Name
Drug Involved
Period/Quarter Covered
by Settlement
Settlement
Date
Settlement Amount
Bayer
Kogenate and
other
Factor/IVIG
Products
January 1993 – August 31,
1999
Sept. 2000
$14 Million
TAP
Lupron
January 1991 – October
2001
Oct. 2001
$875 Million
Pfizer
Lipitor
1st Quarter - 4th Quarter
1999
Oct. 2002
$49 Million
Bayer and GSK
Cipro, Adalat
CC, Flonase
and Paxil
Cipro:
1st Qtr ’96 – 1st Qtr ’01
Adalat CC:
th
4 Qtr ’97 – 1st Qtr ’00
Flonase:
3rd Qtr ’97 – 3rd Qtr ’00
Paxil:
st
1 Qtr ‘01
April 2003
Bayer Total:
$257 Million
At least $2.5 Million
to 340B entities
January 1991 – December 31,
2002
June 2003
AstraZeneca
Zoladex
Safety Net Hospitals for Pharmaceutical Access
(202) 552-5850
GSK Total:
$87.6 Million
At least $9.4 Million
to 340B entities
$355 Million
Bill von Oehsen
[email protected]
Manufacturer
Name
Drug Involved
Period/Quarter Covered
by Settlement
Settlement
Date
Settlement Amount
Schering-Plough
Claritin
January 1998 – December
31, 2002
July 2004
Total: $345 Million
At least $10.6 Million
to 340B entities
KING
Pharmaceuticals
Entire Drug Line
January 1994 – December
31, 2002
October 31,
2005
$124 Million
At least $7 Million to
340B entities
Schering-Plough
Claritin RediTabs
and K-DUR
August 29,
2006
$255 Million civil
settlement
($180 Million criminal
fines)
At least $3.9 million to
340B entities
4th
Redi-Tabs:
Qtr ’98 – 2nd Qtr ’02
2nd
K-DUR:
Qtr ’96 – 2nd Qtr ’01
Bristol-Myers
Squibb
Serzone
1st Qtr ’97 – 4th Qtr ‘97
September
28, 2007
$515 million
$124,000 to 340B
entities
Merck
Zocor, Vioxx
April 1998 – March 2006
February 7,
2008
$671 million
$9 million to 340B
entities
Safety Net Hospitals for Pharmaceutical Access
(202) 552-5850
Bill von Oehsen
[email protected]
Diversion
Aliquippa Community Hospital post-mortem
Bad News
Good News
•
•
•
Criminal action sent
message to covered entities
– PDMA is a powerful
deterrent
DSH community reported
ACH to HRSA – shows
covered entities are selfpolicing
Dispute resolution process
worked
Safety Net Hospitals for Pharmaceutical Access
202-552-5850
•
•
•
•
•
Enforcement action took too
long
Government should have
initiated return of discounts –
not leave to manufacturers
Too easy to enroll ineligible
facility – need verification of
database information
Leg
No manufacturer audits
No HRSA authority to
Leg
impose financial penalties
Bill von Oehsen
[email protected]
Duplicate Discounts
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Covered entities beware! Increased audits and recoupments by
state Medicaid agencies for overbilling 340B drugs
Entities should do self-audits and, if discover problems, make
voluntary disclosure to HRSA and initiate corrective action
plan
Make sure Medicaid billing information reflected in OPA
database is accurate – actionable if it is not?
340B providers need better guidance on how to comply with
Leg
duplicate discount mechanism
States need access to 340B price list to evaluate whether they
are being billed at actual acquisition cost
Safety Net Hospitals for Pharmaceutical Access
202-552-5850
Bill von Oehsen
[email protected]