Transcript Apexus 340B prime vendor program

“Managing a 340B
Pharmacy to Optimize
Savings in Tough Economic
Times”
13th Annual Pharmacy Purchasing Network Conference
Tuesday August 18, 2009 – 10:50am – 11:50am
Las Vegas, Nevada
Presented by: John Barnes
Overview/ Objectives
• 340B Drug Program refresher
• Health Care Reform
– Stimulus package
– 340B Health Care Reform Legislation
• 340B Program Improvement & Integrity Act
• Patient definition
• Contract Pharmacy
• Apexus 340B prime vendor program (PVP)
– How pharmacy buyers access informational tools and
resources for cost containment strategies
– Steps pharmacy buyers take to optimize the PVP
340B Program Administration
• The 340B Program Team:
– HRSA’s Office of Pharmacy Affairs
– Pharmacy Services
Support Center
(PSSC/PharmTA)
– 340B PVP Prime Vendor
Program (Apexus Inc.)
340B Eligible Covered Entities
1) Disproportionate Share Hospitals (DSH)
2) HRSA Grantees:
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Federally Qualified Health Centers (FQHC)
Hemophilia Treatment Centers
Ryan White Programs (HIV programs)
Sexually Transmitted Disease programs
Tuberculosis Programs
Title X Family Planning Clinics
Urban 638 Tribal Programs
PVP Participants by Entity Type
(as of July 2009– 9,178 participants)
What Drugs Are Covered Under 340B?
Covered drugs:
• Outpatient
Prescription drugs
• Over-the-counter
drugs (accompanied
by prescription)
• Clinic administered
drugs within eligible
facilities
Non-covered drugs:
• Vaccines *
• In-patient drugs
*Aggressive discounts negotiated by the Prime Vendor Program for vaccines
and other non-covered products
How 340B Pricing Works
• Statutory pricing calculation based on a formula reported
by drug manufacturers to CMS
The 340B Price…
– Reflects activity of retail pricing 6 months in past
– Is the lower of Medicaid Best or AMP minus 15.1% on brands
• Formula: URA = the greater of AMP x 15.1% or AMP – BP
– For generics and prescribed OTC drugs, is AMP minus 11.0%
• Formula: URA = AMP x 11%
– May contain additional discounts if price of drug has increased
faster than the rate of inflation (CPI penalty)
How 340B Pricing Works
–Recalculates on a calendar quarter basis
–Is considered confidential
–Is a “Ceiling Price” and deeper discounts
can be negotiated through the 340B
Prime Vendor program or independently
340B Restrictions & Prohibitions
• Duplicate Discount Rule
– Final guidelines issued August 23,1996 (61 FR 43549)
– Discounts are upfront. No backend rebates
– Bill Medicaid acquisition cost plus dispensing fee
– No billing restrictions for non-Medicaid or line item billed to Medicaid
– Medicaid Carve-out Option
• Prohibits the sale or dispensing of 340B-priced drugs to persons who are
not patients of a covered entity
• Prohibits resale or transfer to non-340B entity
• Subject to audit by the manufacturer or the Secretary
• Does not require separate inventories
Patient Qualifications for DSH
Entity meets definition of a “patient” (61 FR 55156)
if the following criteria are met:
1. The covered entity must maintain records of health
care services for the individual;
2. The individual must receive care from a health care
professional who is employed by or under contract or
other arrangements with the covered entity
3. Responsibility for the care provided must remain with
the covered entity
DSH Eligible Hospital Contract Options
Hospital
GPO/Inpatient
Eligible Contracts:
• GPO Contract
• DSH Inpt Contract
• Individual Contract
340B/Outpatient
Eligible Contracts:
• PHS Contract
• PVP Contract
• Individual Contract
Types of 340B Pharmacies
•
In-house pharmacy vs. Contract pharmacy
–
In-House: no limits to number in-house
–
Contract Pharmacy:
•
One or multiple pharmacies (thru alternative methods
demonstration projects (AMDP)
•
Ship To/ Bill To arrangement
•
Negotiate dispensing fee
http://pssc.aphanet.org/about/contractpharmacy.htm
HealthCare Reform
• President Obama’s healthcare plan has
three broad objectives:
1. To reduce costs so that the system will “work
for people and businesses – not just insurance
companies”
2. To provide “affordable, accessible coverage
options for all”
3. To promote prevention and strengthen public
health
Stimulus Package: Money for 340B
Hospitals & Health Centers
Federal stimulus legislation enacted in February 2009 provides:
• $268.8M increase in Medicaid DSH payments in FY2009 and
2010
– Biggest increases go to NY, CA, TX, NJ, PA, MO
• Community health centers get $2B in total funding
– $500M for increased demand in services
– $1.5M for infrastructure improvements and new centers
• Health Information Technology
– Incentive payments to hospitals and providers participating in
Medicare and Medicaid for adoption of electronic health records
and e-prescribing, beginning in 2011
Key Players in 340B Health Care
Reform - Allies
Sen. Jeff
Bingaman
(D-NM)
Sen. John
Thune
(R-SD)
Rep. Bobby
Rush
(D-IL)
Jo Ann
Emerson
(R-MO)
Bart
Stupak
(D-MI)
Features of House & Senate 340B
Legislation
• Extends 340B discounts to the inpatient setting
• Expands list of covered entities eligible for 340B
discounts
– Clarifies the status of children’s hospitals as 340B covered
entities
– Adds potential new covered entities:
• Critical access hospitals (CAHs)
• Sole community hospitals (SCHs)
• Rural referral centers (RRCs)
• Medicare-dependent hospitals
• Maternal & child health centers
• Substance abuse and mental health centers
Features of House & Senate 340B
Legislation
• Integrity Measures Recommended by OIG
– Enhanced ceiling price transparency
– Improved accuracy of data on OPA website
– Expanded government oversight and enforcement authority over
manufacturers and covered entities
– Defined administrative procedures to address overcharges and
pricing disputes
• Expansion of Medicaid Rebate Program
– Modifies AMP – increase Medicaid rebate from 15.1% to 23%
– Expands Medicaid Rebate Program to 6 million dual eligible's
– Extends rebate program to Medicaid managed care plans
Federal Register Notice –
Patient Definition (72 FR 1543)
– Clarifies previous FR Notice of October 1996
– A clear and enforceable definition to help ensure
against diversion and support 340B program integrity
– Hospitals, CHC’s, and other 340B providers unhappy
with proposal
• Turns 3 step process into 8 step process
• Could limit 340B facilities’ ability to provide care
– Status: comment period closed 03/13/07 – awaiting final
publication
Federal Register Notice –
Contract Pharmacy (72 FR 1540)
– Updates previous FR Notice of August 1996
– Builds upon experience with Demonstration Projects
– Incorporates multiple pharmacies as standard option
– Network model arrangements would still requires
Alternative Methods Demonstration Projects
(AMDPs) approval
– Status: comment period closed 03/13/07 – awaiting final
publication
Apexus – HRSA’s 340B Prime Vendor
• Unique federal purchasing program (public-private
partnership)
• Voluntary program for suppliers and 340b covered entities
• Mission - To improve access to affordable medications for
all 340B covered entities by:
– Lowering participants’ supply costs by expanding the
current PVP portfolio of sub-340B priced products
– Providing covered entities with access to efficient drug
distribution solutions to meet their patients’ needs
– Providing access to other value added products and
services meeting covered entities’ unique needs
Benefits of PVP to Covered Entities
1.
No risk or cost to participate
2.
No change of distributor required
3.
Easy access to 340B sub-ceiling pricing exclusive to
participants
4.
Longer term contracts
5.
Monitoring of distributors to ensure appropriate charges
for PVP contract items
6.
Resources available on secure website
– Pricing transparency: 340B ceiling price verification & comprehensive subceiling catalog
– Reports to help optimize spend
Benefits to Covered Entities – cont’d
• E-mailed monthly to all
participants – includes:
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Special Announcements
Contract Highlights
Industry News
FAQ’s
Drug Shortages/Recalls
Supplier Profile
• Webinars –
– CEO/CFO,
– Buyers, FPC
• Customized Surveys
Benefits to Covered Entities – cont’d
The Role of the Buyer/ Purchasing
Agent
• Buyer significantly impacts the budget
• First to notice pricing fluctuations
• Monitors wholesaler pricing
• Validate wholesalers 340B & PVP pricing
• Contact wholesaler immediately with discrepancies
• Utilize a formulary to contain costs
• Choose the most cost effective selection
• Read the Flash –– top 200 changes
Cost Containment and Price
Validation Tools
Example of Best Buy Report by
Therapeutic Class
Example of Best Buys by
Chemical Compound Report
Best Price OTC Products Report
Summary of Cost Containment Reports
• List of 20,000 + NDC’s of 340B selling
prices for auditing wholesaler
• Therapeutic Class Best Buy
• Best Buy report by chemical compound
• Best Price Over-the-Counter report
Other Value Added Products and
Services for Participants
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Pharmacy computer systems
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340B virtual inventory tracking/split billing systems
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Diabetic meters/strips
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Biologicals/vaccines
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Pharmacy technology / automation
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Prescription vials, labels, printer cartridges
•
PBM services
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Other
Steps to Optimize PVP Pricing
1. Ensure Pharmacy procurement team and
management understand the 340B and PVP
2. Verify selected distributor has loaded PVP contract
file within 340B account(s)
3. Achieve instant savings for products on PVP
contract portfolio
4. Review generic alternatives on PVP contract
portfolio and switch to lower cost suppliers
5. Review other PVP contracted items requiring
therapeutic conversion with providers
6. Review other opportunities for savings such as
technology, and pharmacy supplies
Contact Information
Office of Pharmacy Affairs
Phone: 301-594-4353 or 1-800-628-6297
Email: [email protected]
Web: www.hrsa.gov/opa
HRSA Pharmacy Services Support Center (APhA)
Phone: 1-800-628-6297
Email: [email protected]
Web: http://pssc.aphanet.org
Prime Vendor Program (Apexus)
Phone: 1-888-340-2787
Email: [email protected]
Web: http://www.340bpvp.com
Discussion & Questions