1. Britten Pund, Senior Manager, Health Care Access Emily McCloskey, Manager, Policy and Legislative Affairs The Ryan White Program and 340B Pharmacies

2. Agenda  340B Drug Pricing Program Overview  Coordinating with other 340B entities  Policy updates

3. Overview  Authorized by the Veterans Health Care Act of 1992 and is administered by the Health Resources and Services Administration (HRSA).  Provides discounts on covered outpatient drugs to certain safety-net covered entities - average savings of 25-50%  Manufacturers participating in Medicaid agree to charge covered entities a price that will not exceed the 340B “ceiling price”.  The “ceiling price” is calculated based on data obtained from the Centers for Medicare & Medicaid Services (CMS).

4. Overview (continued)  The 340B Drug Pricing Program provides outpatient drugs at a reduced price to safety-net providers – The drugs can be directly purchased at the discounted rate or programs can receive rebates using a pharmacy network purchasing system  It is designed to provide a pricing benefit to safety-net providers with the intent that providers use the savings to reinvest in their programs and enhance medical services to uninsured patients.

5. Intent of the 340B Program Permits eligible safety net providers “to stretch scarce Federal Resources as far as possible, reaching more eligible patients and providing more comprehensive services.” H.R. Rep. No. 102-384(II), at 12 (1992)

6. Program Benefits  Covered entities benefit when the covered entity is able to bill the patient’s insurer (if insured) at a negotiated rate that is higher than the 340B price paid to obtain the drug.  HRSA has no statutory authority to dictate how entities use the savings generated by the 340B program.

7. Eligible Entities  Ryan White HIV/AIDS Program Grantees – Ryan White Part A & B Clinics, AIDS Drug Assistance Programs (ADAPs), Ryan White Part C Early Intervention Services Grantees  Health Centers – Federally Qualified Health Centers, Federally-Qualified Health Center Look-Alikes, Native Hawaiian Health Centers, Tribal / Urban Indian Health Centers  Hospitals – Children’s Hospitals, Critical Access Hospitals, Disproportionate Share Hospitals, Free Standing Cancer Hospitals, Rural Referral Centers, Sole Community Hospitals  Specialized Clinics – Black Lung Clinic Programs, Comprehensive Hemophilia Diagnostic Treatment Centers, Title X Family Planning Clinics, Sexually Transmitted Disease Clinics, Tuberculosis Clinics

8. Eligible Entities (continued)  ADAPs are categorically eligible, meaning all ADAP clients are eligible for 340B priced drugs  All other entities must abide by the patient definition: 1.The covered entity has established a relationship with the individual, such that the covered entity maintains records of the individual’s health care; and 2.The individual receives health care services from a health care professional who is either employed by the covered entity or provides health care under contractual or other arrangements (e.g., referral for consultation) such that responsibility for the care provided remains with the covered entity; and 3.The individual receives a health care service or range of services from the covered entity which is consistent with the service or range of services for which grant funding or Federally-qualified health center look-alike status has been provided to the entity. Disproportionate share hospitals are exempt from this requirement.

9. Registration and Enrollment  http://opanet.hrsa.gov/opa/Default.aspx http://opanet.hrsa.gov/opa/Default.aspx

10. Annual Recertification  Required by Statute – ADAP recertification - January 2015  Ensure program integrity, compliance, transparency and accountability  Ensure accuracy of covered entity information in the 340B database  It is the covered entity’s responsibility to ensure the accuracy of the information in the 340B database  Entities must self-disclose programmatic violations

11. 340B Database  Entities are not eligible for the program unless listed in the 340B database  Entities are required to keep their information up to date on the database and ensure sites are properly listed  Includes the Medicaid Exclusion File

12. Requirements  It is a covered entity’s responsibility to immediately inform HRSA of a change in eligibility status – entity should stop purchasing  Entities should also report non-compliance to HRSA  All offsite outpatient facilities and subgrantee sites are required to enroll and be listed on the 340B database

13. Patient Definition  1996 HRSA Patient Definition Guidelines – Covered Entities (CEs) Other Than ADAP  CE maintains records of individual’s health care and  Individual receives health services from health care professional employed by CE or under contract or other arrangements such that responsibility for care provided remains with CE – Service must be more than dispensing of a drug for self- administration or administration in the home setting – Additional Criterion for Non-ADAP HRSA Grantees  Individuals receives health care service(s) from CE which is consistent with range of services covered by HRSA grant – ADAPs Only  An individual registered in state-operated or funded ADAP that receives Ryan White funding is considered a patient of the ADAP if registered as eligible by the State program.

14. Patient Definition (continued)  HRSA intended to address patient definition in “mega-reg”  Widely differing perspectives on future of patient definition – 340B Coalition  Basic construct of current definition is sound  Specific terms should be defined to avoid confusion by stakeholders  HRSA should release new guidance or regulation in proposed form, so that the public has opportunity to comment – PhRMA  Limit to “uninsured individuals”  Physician must be employee or independent contractor  Patient must receive “ongoing care”

15. 340B Compliance and the Current Enforcement Environment  Increase in HRSA audits and inquiries  Increase in manufacturer inquiries  Annual recertification for all CEs  HRSA plans to issue new guidance in many program areas

16. Coordinating with Other 340B Entities  An individual may be considered a patient of both the ADAP and another covered entity  Both the ADAP and the covered entity would be eligible for the 340B Drug Pricing Program discount/rebate  Only one entity can claim the 340B price for a patient’s prescription

17. Policy Updates  The Office of Pharmacy Affairs (OPA) intended to release a “mega-regulation,” which would codify previous 340B Program guidances, policy releases and FAQs  Due to legal issues with OPA’s rule on orphan drugs, the release of the mega-regulation and all other OPA regulations have been postponed indefinitely  HRSA has stated that it will release a proposed guidance in 2015 and proposed rules civil monetary penalties for manufacturers, calculation of the 340B ceiling price, and administrative dispute resolution.

18. Policy Updates (continued)  The 340B Drug Pricing Program could be a target for the 114 th Congress  PhRMA is advocating for a change to the patient definition that would require patients to be uninsured – This could cause issues for Ryan White Program grantees

19. Contact Information Britten Pund Senior Manager, Health Care Access bpund@NASTAD.org (202) 434-8044 Emily McCloskey Manager, Policy and Legislative Affairs emccloskey@NASTAD.org (202) 434-8067 www.NASTAD.org