December 340B Insider

    340B Winter Coalition Conference

    Mark your calendars for the 11th Annual 340B Coalition Winter Conference, from Feb. 4 to 6, 2015 at the Hyatt Regency Embarcadero in San Francisco. RxStrategies invites you to schedule a meeting time or stop by our booth #18-19 in the exhibit hall. Our team will greet you and answer any and all of your questions regarding 340B. Please let us know if you will be attending the conference by emailing

    Unable to attend the conference this year? If you are unable to make the program this year and have outstanding concerns regarding program changes, let us know by emailing and we will represent you and get you answers.


    HHS to Hold Off on 340B Regulation, Propose Guidance Next Year

    Modern Healthcare (Lee, 11/14) reported the U.S. Department of Health and Human Services (HHS) has “scrapped plans to issue sweeping regulations clarifying the federal 340B drug discount program.” This follows a federal ruling against the agency that struck down a regulation that “required drug makers to offer reduced prices for orphan drugs if they were used for non-orphan conditions or diseases.” The article referenced a statement by the HHS’ Health Resources and Services Administration saying, “Rather than issue the omnibus regulation it initially drafted, the agency will instead propose guidance next year that will address ‘key policy issues raised by various stakeholders committed to the integrity of the 340B program.” Separately, the agency plans to “issue proposed rules related to civil monetary penalties for manufacturers, how the ceiling prices of 340B drugs are calculated and dispute resolution,” the article stated.

    RxStrategies expects that with the Mega Reg. being replaced by additional HRSA 340B guidance, such proposed rules may include: modest clarification on patient definition and eligibility, enhanced covered entity requirements for conducting regular independent 340B program internal audits, and potential limitation of contract pharmacy registrations per covered entity site requirements.


    Protect Prescription Drug Program that Helps the Needy

    Please find below a very strong and effective pro 340B article recently published by one of our clients, Geoffrey Jones of Adventist Walla Walla Hospital. We encourage our clients and partners to similarly advocate publicly for the 340B program in your area. We can provide assistance, so if you are interested, please email  and we will follow up accordingly.

    By: Geoffrey Jones

    11/24/2014- Walla Walla Union-Bulletin

    Everyone deserves a shot at good health. From my vantage point behind the pharmacy counter at Walla Walla General Hospital, I know our team does everything we can to help our patients get the medicine they need to get better.

    As a “safety-net” hospital, we treat everyone, including our nation’s most vulnerable patients—the men, women and children who would otherwise not be able to afford health care when they need it most. Roughly half of the patients we see are covered by Medicare or Medicaid. And while we and other safety-net hospitals are only one-third of all U.S. hospitals, together we provide 62 percent of uncompensated hospital care delivered across the country, according to the American Hospital Association.

    Helping provide excellent care to the most vulnerable among us is a tall order, but a little known federal program lends a helping hand. Established in 1992, the “340B program” requires drug companies that receive government funding to give discounts on drugs to safety-net hospitals like ours that treat high numbers of needy patients. Here at Walla Walla General Hospital, we have been participating in 340B for more than four years. Over time, we’ve been able to use the savings from the 340B program to open a retail pharmacy in one of our family practice clinics. We have also opened, with the aid of those savings, an outpatient immunization clinic, or the “shot spot” as we like to call it; the first of its kind in Washington State.

    In addition, we now have the flexibility to write off or greatly reduce the cost of prescription drugs to patients who are in need and qualify. This improved access to health care resources decreases their need to come back and see us again and again for the same problems. We’ve also been able to hire more pharmacy staff, which has allowed us to devote more time to teaching our patients about their medications. This is directly attributed to the savings we see from the 340B program, and these jobs would not exist without it.

    Because the program is funded entirely by the discounts safety-net hospitals receive from drug companies, it doesn’t cost taxpayers a cent. In fact, the 340B program helps taxpayers save money by helping poor patients afford their medicines, stay healthier and avoid returning to the hospital. Unfortunately, some in the pharmaceutical industry would propose changing or eliminating the program.

    However, the 340B program represents only 2 percent of U.S. drug revenues. Overall, those revenues amounted to $329 billion in 2013, according to an April 2014 report by IMS Health.

    We appreciate that our representatives in Congress understand our need to provide a strong safety net for people in our region. Still, we recognize that without the 340B program, health care here in Walla Walla could be compromised. Without this program, our ability to care for the neediest among us will be limited.

    Geoffrey Jones is the pharmacy director at Walla Walla General Hospital—a client of RxStrategies. Let us know if you have written an editorial, so we can share it with our clients in an effort to generate momentum to keep the 340B program, an essential part of your health center.


    We Must Protect Vital ‘340B’ Drug Discounts for Safety Net Hospitals

    One of the original architects and authors of the 340B legislation passed many years ago also recently penned a very strong article on 340B and the essential role it plays supporting safety net hospitals. Feel free to share this with others within your hospital sites.

    Henry Waxman- U.S. Representative, California’s 33rd Congressional District

    Huffington Post 11-21-2014

    Millions of Americans receive help every year from a federal program they have never heard of: the 340B drug discount program, which allows public and nonprofit safety-net hospitals to better provide both affordable medications and vital services to the underserved.

    I helped write the legislation that created this program and worked to expand it in the 2010 Affordable Care Act. The program has been extremely successful in reducing drug costs and helping support the hospitals and clinics that provide care to the uninsured. But now, pharmaceutical industry opponents of the law are trying rewrite history and limit 340B program eligibility for hospitals and patients—even as they charge as much as $1,000 for a single pill for some drugs.

    The 340B law passed a bipartisan Congress and was signed into law by President George H. W. Bush in 1992. Then as now, safety-net hospitals faced steep increases in drug costs. The program was enacted to help them stretch their resources and serve the uninsured and other needy patients. It was designed to help cut costs for patients and the hospitals that serve them.

    Here is how it works: The law requires drug companies to sell discounted medications to health care providers that serve high numbers of Medicare and Medicaid patients or are located in rural areas. These safety-net hospitals can use their savings on prescription drugs to cut costs for patients or to provide vital clinical and specialized services for people who cannot afford to pay for care.

    We purposefully created the program this way to give safety-net providers an additional tool to enhance their ability to serve poor patients, who would otherwise fall through the cracks.

    The best part? The 340B program is working as Congress intended to help health care providers improve the lives of indigent patients every day.

    At the San Mateo Medical Center in California, for example, 340B savings help fund 12 primary and specialty care clinics that serve the needy. And the savings help offset the cost of providing free medical care for 20,000 patients in the hospital’s indigent program.

    It’s important to understand the heavy financial burden these providers shoulder to treat every patient who walks in the door, at any time of the day or night.

    The need for the 340B program is not going away. The refusal of many governors to take advantage of the Affordable Care Act’s Medicaid expansion has left millions of Americans uninsured. According to the American Hospital Association, 340B hospitals provided over $28 billion worth of uncompensated care in 2012. And drug costs continue to grow—with safety net hospitals forced to pay tens of thousands of dollars for new specialty drugs like Sovaldi, the new Hepatitis C treatment.

    But even as drug company profits are soaring, some in the pharmaceutical industry are trying to derail the 340B program so they can charge higher prices for hospitals and clinics. They want to restrict the drugs eligible for discounts, or reduce the number of patients that qualify for the discounted drugs. If the drug industry prevails, underserved patients across the United States will be the losers, as safety-net hospitals and other providers are forced to curtail care.

    During my time in Congress I have championed numerous health care programs that benefit all Americans, including the less fortunate—and the 340B program is one of the best. Congress should continue to protect this vital drug discount program for years to come.


    Generic Drug Price Bill Introduced

    USA Today (Crutchfield, 11/21) reported on a new bill introduced by Sen. Bernie Sanders (I-VT), the Medicaid Generic Drug Price Fairness Act, which “would require generic drug companies to provide a rebate to Medicaid if their drug prices rise faster than inflation.” According to data from Medicare, “half of all generic drugs went up in price” within the past half year and “Nearly 10% of generics more than doubled in price with the prices of dozens of drugs rising from between 500% to 1000%.” The article stated, “Within the past year, half of all generic drugs went up in price, according to data from Medicare. Nearly 10% of generics more than doubled in price, with the prices of dozens of drugs rising from between 500% to 1,000%.” The paper report adds that the prospects of the bill passing are “dim” because “the House is controlled by Republicans opposed to most limits on drug prices, while control of the Senate will revert to the Republicans in January.”

    The Associated Press (Perrone, 11/21) reported that experts testified before a Senate panel meeting to “scrutinize the recent, unexpected trend among generic medicines.” The report said there are “multiple, often unrelated, forces behind the price hikes, including drug ingredient shortages, industry consolidation and production slowdowns due to manufacturing problems.”


    HRSA Asks Drug Manufacturers to Refund 340B Overcharges

    FierceHealthFinance (Ron Shinkman, 10/26) reported, “The Health Resources and Services Administration had decided that orphan drugs—often pricey medications used to treat rare diseases—should be provided in some instances to hospitals that participate in the 340B program at its permitted discount, according to AHA News Now…HRSA notified the drug manufacturers of its opinion in a letter sent to about 50 drug such companies last month. The agency’s letter asked that drug manufacturers, within 30 days, to ‘notify HRSA of plans to repay affected covered entities and to institute the offer of the discounted price in the future.”

    RxStrategies’ view is that HRSA is correct in their orphan drug interpretation. RxStrategies believes that covered entities should leverage the orphan drug provision to assist patients. We would also note that the covered entity should carefully review any 340B orphan drug activity to ensure 340B compliance. For any additional information or questions on 340B orphan drug compliance, feel free to reach out to RxStrategies directly.

    As of Dec. 1, 2015 11 leading drug manufacturers have agreed with the HRSA view and made key products available at 340B prices. RxStrategies believes through consistent market messaging via key entities, like HRSA and SNHPA, other manufacturers will similarly adopt the proposed HRSA guidance in 2015.


    OIG Releases 2015 Fiscal Year Work Plan

    Recently the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its Fiscal Year 2015 Work Plan, highlighting the continued focus on issues such as emerging payment, eligibility, management, IT security vulnerabilities and more.

    For the 340B Drug Discount Program, OIG will continue to analyze how much Medicare Part B spending could be reduced if Medicare were able to share in the savings for 340B-purchased drugs. OIG plans to assess the risk of duplicate discounts for 340B-purchased drugs paid through Medicaid MCOs and to describe states’ efforts to prevent them.

    Review the OIG FY 2015 Work Plan. Then contact the experts at RxStrategies to discuss your 340B program initiatives and how to remain compliant and audit ready.


    RxStrategies Q4 Updates

    We wanted to provide a quick highlight of other updates from RxStrategies’ view:

    Staff Addition: New national sales manager, Rhodie Smith, has joined the RxStrategies team in the 4th quarter of 2014. Brian Witlarge and Jay Singh have joined the RxS IT team full time.

    SNHPA Partnership Extended: RxStrategies has once again partnered at the highest level with SNHPA on activities related to 340B programs for 2015 (conference events, other SNHPA events, PAC Advisory Board participation and support).

    Additional Services Available in 2014: We have enhanced RxStrategies’ portal solutions and split billing functionality, improved connectivity, and recently launched solutions for new clients. Positive feedback continues to roll in on our Clinical Insights. Read the most recent version.

    Rebranding of RxStrategies: Look for new branding of RxStrategies in future conferences, including improved space, enhanced collateral, portal demonstrations and other updates.


    340B Program Questions and Answers


    How far may a covered entity receive 340B prices retroactively?


    Covered entities are never eligible for 340B pricing until the date they are fully enrolled, assigned a 340B identification number, and listed in the 340B database. Covered entities participating in the 340B program are responsible for requesting 340B pricing at the time of the original purchase. If a covered entity wishes to reclassify a previous purchase as 340B, the entity should first notify manufacturers and ensure all processes are fully transparent with a clear audit trail that reflects the actual timing and facts underlying a transaction. The covered entity retains responsibility for ensuring full compliance and integrity of its use of the 340B program.