October 22, 2019

October 22, 2019

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October 21, 2019

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340B Drug Ceiling Prices Now Available

On April 1, 2019, the Health Resources and Services Administration (HRSA) launched a secure website that lists the maximum price drug manufacturers may charge 340B-covered entities for 340B-eligible drug purchases (the 340B Ceiling Price Site).  Drug manufacturers and 340B-covered entities may access the 340B Ceiling Price Site through their HRSA Office of Pharmacy Affairs information system (the 340B OPAIS) account here: https://340bopais.hrsa.gov/ 

Since the creation of the 340B program in 1992, participating covered entities could not verify whether they received the correct price for medication purchased through the program. In 2010, as part of the Patient Protection and Affordable Care Act, Congress directed HRSA to create a secure database that lists the 340B ceiling price.   Nearly nine years later, HRSA launched the 340B Ceiling Price Site which allows covered entities to now access verifiable 340B drug pricing information.

The 340B ceiling price is statutorily defined as a drug’s average manufacturer price (AMP) of a drug reduced by the unit rebate amount (URA).  The URA is calculated by dividing the drug’s Medicaid drug rebate amount (DRA) by the AMP.  The 340B ceiling price can be calculated as AMP - (DRA/AMP).

To populate the 340B Ceiling Price Site, HRSA obtains AMP and URA information from the Centers for Medicare and Medicaid Services (CMS), as well as a third-party drug pricing publisher, First Databank.   Manufacturers are also tasked with providing pricing information to HRSA during quarterly price reporting windows, which will last for two weeks each calendar quarter. If there is a discrepancy between HRSA’s data and manufacturer reported data, the manufacturer may either: (1) accept HRSA’s data as its own, (2) refuse to edit the manufacturer data and provide explanations for each discrepancy, or (3) edit the manufacturer data and provide reasoning for any remaining discrepancies.  After resolving pricing discrepancies, HRSA will publish the calculated 340B ceiling price to the 340B Ceiling Price Site. 

Covered entities’ access to the 340B Ceiling Price Site is limited to the covered entity’s authorizing official (AO) and primary contact (PC).  AOs and PCs are strictly prohibited from sharing 340B pricing information outside of their organization and from exporting pricing information from the 340B Ceiling Price Site. They must attest to their compliance with these obligations each time they log into the 340B Ceiling Price Site.

Although the 340B Ceiling Price Site provides covered entities with valuable pricing information, covered entities are reminded that the price they pay for 340B-eligible drugs could differ from the 340B ceiling price depending upon the covered entity’s wholesale pricing contract terms. The price paid for 340B eligible medications may vary for a number of reasons, including wholesale cost-minus/plus calculations and the availability of sub-340B ceiling pricing for drugs through the 340B Prime Vendor Program.

© 2019 Dinsmore & Shohl LLP. All rights reserved.

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About this Author

Brian Murray, healthcare lawyer, Dinsmore
Associate

Bryan focuses his practice on health care law and provides legal counsel to health care industry clients on a range of issues, such as specialty and mail-order pharmacy operations, provider networks and reimbursement, regulatory compliance, contract review and preparation and 340B programming. He has experience analyzing pharmaceutical trade issues affected by state and federal regulatory frameworks, including pharmacy practice acts, the anti-Kickback Statute, the Drug Supply Chain Security Act, the Stark Law and the Health Insurance Probability and Accountability Act. ...

(412) 339-5603
Jennifer Mitchell, health care practice group partner, Dinsmore Shohl, law firm,
Partner

Jennifer is a Partner in the Health Care Practice Group and leads the firm’s HIPAA Privacy and Security practice and initiatives. In her HIPAA practice, she works with clients to minimize the risk of privacy and data security issues, assisting with all aspects of HIPAA privacy and security compliance, governance, audits/investigations, breach analyses, training and strategic planning. She has a thorough understanding of federal and state privacy and confidentiality laws and has served as a health care privacy expert witness. 

Within the constantly evolving health care legal landscape, in addition to HIPAA, Jen provides health care regulatory and compliance guidance to her clients in areas such as the federal and state anti-kickback laws, Stark law, PPACA (health reform), Sunshine Act, Medicare Secondary Payer laws, pharmaceutical marketing rules, ADA standards, and other laws and regulations impacting her health care clients. 

513-977-8364