by Lisa Scholz, PharmD, MBA, FACHE, Senior Vice President Industry Relations
March 31, 2022
March Madness, as most people know it, is a time when people come together to cheer on their home teams as they take their shot at glory in the NCAA college basketball tournaments. The field is slowly winnowed down until a winner is triumphantly crowned. There is plenty of heartbreak and loss sprinkled amid the jubilation, but the overall mood is one of celebratory pride at a season of accomplishment.
In 340B, however, we have our own not-so-sweet 16 — and the number of participants is growing larger, not smaller.
It’s become something of a depressing ritual to chronicle the new manufacturers joining the bandwagon of 340B contract pharmacy exclusions, and with every new announcement, things get significantly more complicated for 340B covered entities and pharmacies. For covered entities, this March Madness has been about exasperation and frustration.
As far as new developments, March was relatively quiet, but the winds are picking up for additional April showers:
- By far the best news was President Biden’s signing of a spending bill (Consolidated Appropriations Act, 2022) that offers reinstatement to some disproportionate share hospitals who lost their 340B eligibility because of patient mix changes caused by the COVID-19 pandemic. Those hospitals won’t be able to recover 340B benefits lost due to becoming ineligible, but they can apply for reinstatement through the end of 2022.
- The Health Resources and Services Administration referred Boehringer Ingelheim to the HHS Office of Inspector General over its 340B contract pharmacy restrictions. It’s the seventh manufacturer to be referred to the OIG for investigation and possible civil monetary penalties, and the first enforcement action we’ve seen from HRSA in months.
- Meanwhile, Gilead and Johnson & Johnson/Janssen became the 15th and 16th drug manufacturers, respectively, to announce 340B contract pharmacy exclusions — and these are significant and begin in May. Gilead’s restrictions on its hepatitis C drugs, taken alongside AbbVie’s exclusions on Mavyret, means that “all first-line antiviral treatments for hepatitis C now have manufacturer conditions on 340B pricing,” as 340B Report And J&J is the world’s largest drug company, with 29 drugs subject to the restrictions.
- Nebraska is the latest state to pass a law protecting 340B covered entities and contract pharmacies from discriminatory practices by pharmacy benefit managers.
- Rhode Island is mulling its own protections for 340B covered entities and contract pharmacies, with several other states like Illinois, California, Connecticut and Oklahoma joining in the movement.
Giving covered entities control
We’ve been saying for a while to expect more manufacturers to join the pile-on, and we’re finding that more and more customers are making plans to start handing over claims data — unwillingly, however the financial implications of continuing to resist are not sustainable. Accordingly, our focus has shifted to how to help our customers.
Many customers want Sentry to provide them the claims data in a format where they can review it and easily make changes to include only information that is absolutely necessary before submitting it. And many are being selective, saying they’ll send data only to certain manufacturers, but not all. (That brings up an interesting scenario: If covered entities find ways to avoid the hassle with some manufacturers, such as through formulary management or using generics or biosimilars, then the contract pharmacy exclusions ultimately could lead to lost revenue for drug makers. But I digress.)
However, each manufacturer has its own criteria and rules for submitting data, making this a confusing and complicated jumble of rules for covered entities to follow.
We‘ve been talking with 340B ESP, the primary third-party data platform manufacturers are using to receive and vet claims data from covered entities, to continuously evaluate how to help our customers — or at minimum provide input on what is working and what is in need of change.
In the meantime, we’ve made some important modifications to our Sentrex contract pharmacy claims reports to make them more useful for submitting claims data to third parties and give customers more control over the contents of the report. The changes allow users to slice and dice the claims data so they can be selective about which data they share and omit, and it helps them easily meet the burden of biweekly reporting.
Our next iteration will add more data-scrubbing capabilities and automate it, so customers can make their desired settings once and then schedule each subsequent report to go out, and they only need to review it for modifications or changes. Stay tuned for that.
Much ado about HIN numbers
Lately, we hear the following question a lot: Does Sentry have our HIN number?
Unfortunately, Sentry has nothing to with HIN numbers, which covered entities must provide to 340B ESP for some, but not all, manufacturers (see above “jumble of rules”).
The Health Industry Number is an invention of the Health Industry Business Communications Council, used by drug wholesalers and GPOs with their suppliers to verify billing information and ship-to locations of hospitals, pharmacies and other provider organizations. They are totally unrelated to 340B, except manufacturers want HIN numbers to match with the information they receive from wholesalers (as opposed to a 340B ID or other identifiers like NPI). Covered entities may need to contact the wholesaler for the contract pharmacy to obtain HIN numbers or clarify the appropriate number, if they cannot carry through the registration process with 340B ESP.
Worse, not all wholesalers provide HIN numbers for 340B business tractions; 340B ESP now instructs a covered entity to apply for one if they don’t have one for a contract pharmacy, which may take some time to obtain. Having this HIN number is the gate to regaining 340B pricing in some manufacturer requirements. It also costs $100, with a $50 annual renewal fee, all for something that was created for use by manufacturers and wholesalers, not 340B covered entities.
So much for it being “free” to submit claims data.
Together with the data-submission requirements, it all adds up to added administrative (and financial) burdens. It also suggests that the drug industry continues to change the rules for 340B covered entities, which is frustrating for us all.
In the meantime, we’re working hard to support our customers during this challenging time. We’ve prepared guides, cheat sheets, summaries of court rulings and other materials to help customers decipher the various manufacturer requirements and ever-evolving 340B contract pharmacy landscape. We’ve also done a lot of internal training to ensure our employees and account managers are up to date with the latest developments.
These are tough times in 340B, and it can feel discouraging. Finding a lasting solution to the contract pharmacy standoff will take time and the involvement of different branches of government, covered entities and even the drug manufacturers themselves.
In the meantime, let’s all stay focused on our safety net missions and know that our path is paved with pride and accomplishment, just like all those tournament teams.