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Additional Manufacturers Seek Contract Pharmacy Data and Place Restrictions on 340B Programs

AstraZeneca distributed letters recently that as of October 1, 2020, 340B pricing will be available only through “a single contract pharmacy for those covered entities that do not maintain their own on-site dispensing pharmacies.” Eli Lilly had previously stated it would provide Cialis at 340B pricing to only one contract pharmacy location for each entity. Both companies appear to be challenging 2010 guidance from HRSA.

Contract pharmacies in the 340B Program were created in 1996, four years after 340B itself. The 1996 guidance from HRSA “permitted a covered entity to use a single point for pharmacy services, either an in-house pharmacy or an individual contract pharmacy”. In 2010, additional guidance from HRSA allowed an unlimited number of contract pharmacies. HRSA has stated its 2010 guidance is still in effect but is not enforceable unless there is a clear violation of the 340B statute.

Novartis distributed letters to covered entities recently stating it will be requesting contract pharmacy data, including Medicaid, Medicare, and commercial claims, in order to address duplicate discounts and “ineligible rebates”. These letters are in addition to previous letters from Merck and Sanofi requesting contract pharmacy data be uploaded to a portal created by Second Sight Solutions called 340B ESP.

The current 340B statue only requires covered entities to protect against duplicate discounts with Medicaid fee-for-service patients. Also, the Final 2016 Medicaid OP Drug Reimbursement Regulations indicated the States and the respective MCO companies (not the covered entities) are responsible for ensuring duplicate discounts do not occur for Medicaid Managed Care claims. CMS emphasized this requirement in an answer to a comment in the regulations. Wellpartners, the TPA for CVS contract pharmacies, provided letters to covered entities using its platform stating it will only authorize the release of Medicaid claim data to 340B ESP.

In the coming weeks, it is anticipated additional manufacturers will distribute similar letters causing more confusion and burden on covered entities.

We will continue to monitor developments and provide updates as available. If you have any questions, please reach out to one of our Apexus Certified 340B Experts.

 

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