By Kristin Fox-Smith and William Wood

Critical news and program updates were shared at the SNHPA 11th Annual 340B Coalition Conference held February 4-6, 2015 in San Francisco. SNHPA, which stands for “Safety Net Hospitals for Pharmacy Access,” is well known for its advocacy and communication with participants in the federal 340B Discount Drug program. Visante’s 340B Assessment and Support Team are always in attendance at these meetings.

Three Key Issues Coming in 2015

1. HRSA “mega guidance” to replace “mega reg”

The Health Resources and Services Administration (HRSA) announced its plans last November to abandon the much anticipated “mega-reg” as a result of questions challenging the organization’s rule making authority. Participants in the 340B program have been waiting for clarification of various details such as the definition of “eligible patient”, compliance requirements for contract pharmacy arrangements, hospital eligibility, and criteria for hospital off-site facilities.

HRSA has stated that, instead of a “mega reg” it will pursue proposed rules where it has clear legislative rule making authority. To this end, the HRSA Office of Pharmacy Affairs (OPA) website includes a statement that HRSA will issue proposed rules pertaining to civil monetary penalties for manufacturers, calculation of the 340B ceiling price, and administrative dispute resolution in 2015. It also states that HRSA will issue proposed guidance to address “key policy issues.” These are expected to include information in this “mega guidance” that would have been addressed by the “mega-reg.”

2. HRSA may conduct as many as 200 compliance audits in FY 2015: more than twice the number done in FY 2014

In 2014, HRSA committed an additional $6 million to increase its 340B program integrity and oversight activities. OPA used these funds to establish a Program Performance and Quality branch to augment the already established operational and informatics branches. OPA stated that its goal if FY 2015 is to double the number of audits performed in previous years. In OPA’s recently published Program Integrity FY 2014 Audit Results, it is clear that HRSA is closely scrutinizing contract pharmacy arrangements and focusing attention on diversion, duplicate discounts, and 340B database records.

3. Covered entities are strongly advised to conduct internal audits and are required to conduct regular monitoring and internal auditing if they have contract pharmacy relationships.

HRSA’s 2010 guidance allowed covered entities to contract with multiple outside pharmacies to increase patient access to needed medications. Over the last few years, the number of contract pharmacy arrangements has grown significantly. As of January 2015, more than 36,000 active contract pharmacy arrangements were listed on the 340B database. Contract pharmacy arrangements involve a complicated and cumbersome level of oversight to ensure the proper contract and internal inventory and dispensing controls are in place to ensure that all aspects of the 340B rules and regulations are in compliance. HRSA has asserted that covered entities are ultimately responsible for all 340B program compliance.

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