340B Contract Pharmacy Services: An Overview

1
340B Contract Pharmacy Services An Overview

• Katheryne Richardson, PharmD
• Quality Improvement Pharmacist, PSSC
• July 15, 2008

2
Objectives

• Discuss Contract Pharmacy Basics
• History
• Current trends
• Function
• Discuss Contract Pharmacy Benefits and Challenges
• Provide Resources

3
History

• 1992 340B Legislation--Contract Pharmacy not
  part of original legislation
• 1996 Entities expressed need to contract with a
  separate pharmacy Contract Pharmacy Federal
  Register Notice finalized to provide guidance

4
What The Guidelines Said

• Entity purchases drug
• Ship-to-bill-to
• Pharmacy provides ALL services (one pharmacy per
  entity
• Freedom to choose
• Contractor provides reports
• No drug resell or transfer
• Not for Medicaid
• Subject to audits, copy of contract shared w/
  drug manufacturer upon request
• Separate records for 340B
• Medicare/Medicaid anti-kickback statute followed
• Follow all other laws
• Must submit self-certification form

5
What The Guidelines Did NOT Say

• Exactly what records should we keep?
• How should the money be transferred?
• How should we negotiate a dispensing fee for the
  pharmacy?
• Is it OK to negotiate a fee based on percentage
  of drug reimbursement?
• Can a contract pharmacy bill 3rd party on behalf
  of entities?
• What does an arrangement to prevent duplicate
  discounting between Medicaid and the entity
  really mean?
• Can I contract for some services and not others?
• What constitutes an electronic inventory?
• Must I use NDC-to-NDC replenishment?
• What do we do with the inventory when we
  terminate a contract?
• How should we deal with back-orders when we need
  to replenish?
• GOOGOL

6
Current Trends
7
Enrollment

• Entity must
• Be enrolled in 340B
• Submit a self-certification form
• Be listed on the OPA database

8
OPA Database
9
Contract Pharmacy Search
10
Function
K

Entity
Pharmacy

K
Patient
Wholesaler

11
How the Patients are Charged

• 340B drug cost Dispensing fee
• (340B drug cost) x markup Dispensing fee
• 340B drug cost x markup Dispensing fee
  Admin. fee

12
Contract Pharmacy Benefits and Challenges

• Benefits
• Smaller entities may participate without a large
  cash outlay or significant pharmacy expertise
• Patients receive inexpensive comprehensive care
• Pharmacist access
• Challenges
• Contract details
• Culture changes
• State legal requirements
• Patient convenience
• Fear of non-compliance with regulations
• Finding a willing contractor

13
Contract Pharmacy Hot Topics

• Federal Register Notice Multiple contract
  pharmacies
• AMDPs
• NPI Numbers
• Including Medicaid prescriptions in
  Contracts/DRA
• Split-billing software
• Contract Management Companies

14
PSSC Contract Pharmacy Resources

• Free PharmTA
• PSSC Implementation Plan
• Decision-Analysis and Financial Analysis
• Sample contracts
• Manuals
• For the Contract Pharmacy http//pssc.aphanet.org/
  documents/pharmacy_001.pdf
• For the entity
• http//pssc.aphanet.org/documents/bridge-340B_
  001.pdf

15
Contract Pharmacy Action Plans
16
Financial Analysis
pssc.aphanet.org/resources.htm
17
What you will hear next

• Two perspectives on Contract pharmacy
• History and scope
• Relationship with contract pharmacy
• Financial Metrics
• Record-keeping
• Biggest challenge and how addressed
• Views on new issues impacting contract pharmacy

18
Contact

• HRSA Pharmacy Services Support Center atAmerican
  Pharmacists Association (APhA)
• PSSC Call Center
• [phone]
• Or
• [phone] Email pssc_at_aphanet.org