We’ve written before about the 340B program, which allows some health service providers that treat low-income patients to purchase outpatient prescription drugs at deeply discounted prices. It’s related (at least tangentially) to our blog because of the link between the 340B program and the manner in which the Medicaid program pays for outpatient drugs; essentially, the price that a 340B covered entity pays for a drug is the price that Medicaid would pay for the drug when it’s dispensed to a Medicaid patient: at least 23.1% off of the manufacturer’s price of the drug.… More
Category Archives: 340B Drug Pricing Program
Earlier this year, we wrote about a lawsuit involving the 340B drug pricing program. We sometimes write about the 340B program because it is integrally linked to the Medicaid prescription drug rebate program. So today, we wanted to call attention to a proposed regulation issued by the Massachusetts Medicaid program (which is called “MassHealth”) that shows that link clearly.
Section 1927 of the Social Security Act requires pharmaceutical manufacturers to provide a rebate to state Medicaid plans if they want to have their drugs covered by Medicaid. … More
Happy New Year! While healthcare developments have been relatively slow lately due the ongoing partial Federal shutdown, an important story did arise over the most recent Holidays. We previously wrote about a lawsuit filed in November 2017 by a group of hospital trade associations against the Department of Health and Human Services (HHS) opposing a major change in Medicare reimbursement policy when 340B hospitals purchase drugs under the 340B program for use in the hospital outpatient setting.… More
The past couple of weeks have involved a flurry of healthcare-related developments, including on the Medicaid drug pricing front. On February 9, 2018, President Trump signed into law the Bipartisan Budget Act of 2018, which revises the rebate formula for line extensions applicable to certain drugs in the Medicaid program. Then later that same day, the Council of Economic Advisors issued a report titled “Reforming Biopharmaceutical Pricing at Home and Abroad,” which among other things,… More
Since August, 2017, a new class of transformative therapies referred to as cell therapies or gene therapies have been approved by the US Food and Drug Administration (FDA). These new cell and gene therapies are typically administered once, as opposed to repeatedly over the course of the patient’s lifetime.
Payers, providers, and manufacturers have been considering how existing payment systems – particularly Medicare and Medicaid – can recognize the value of these new treatments. … More
Back in July, my colleague Tom Barker told you about a CMS proposal to institute a fundamental reimbursement methodological change for 340B drugs used in the hospital outpatient setting. We have noted before the link between the Medicaid prescription drug rebate program and the 340B program. As a refresher, in order to have its outpatient drugs covered by Medicaid, the manufacturer must agree to three separate requirements. First,… More
CMS Proposes Fundamental Reimbursement Methodological Change for 340B Drugs Used in Hospital Outpatient Setting
We have noted before the link between the Medicaid prescription drug rebate program and the 340B program. As a refresher, in order to have its outpatient drugs covered by Medicaid, the manufacturer must agree to three separate requirements. First, the manufacturer must agree to provide a rebate to Medicaid equal to the greater of 23.1% of the average manufacturer price (AMP) of the drug, or AMP minus the best price of the drug. … More
Overview & Analysis
On August 12, 2016, the Health Resources and Services Administration (HRSA) published a proposed rule entitled “340B Drug Pricing Program; Administrative Dispute Resolution” (Proposed Rule). The Proposed Rule follows the Advanced Notice of Proposed Rulemaking (APRM) issued by HRSA on September 20, 2010 and aims to establish requirements and procedures for the 340B Program’s administrative dispute resolution (ADR) process. Interested parties may submit written comments on or before October 11,… More
The Office of Inspector General (OIG) recently issued a report titled “State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates.” In its report, OIG wanted to study the different methods that states were using to prevent illegal “duplicate discounts” that occur as a result of the interaction between the Medicaid drug rebate program and the 340B drug-discount program. OIG revealed that the systems a majority of states have for preventing duplicate discounts are actually quite vulnerable,… More