Michelle Herzog, Deputy Director of the Health Resources and Services Administration Office of Pharmacy Affairs, provided the HRSA update to 340B Summer Coalition participants this week in Washington D.C. She started off by saying that there were NO BREAKING ANNOUNCEMENTS THIS YEAR; HOWEVER, she did mention that HRSA had completed their first manufacturer audit in conjunction with the Office of Inspector General (OIG) last year and that it is an OIG restricted report. The audit results will not be available to the public. “HRSA is working on developing their own protocol for manufacturer audits and hope to conduct our own [audit] here soon in FY 2015,” Herzog said.
She discussed HRSA’s challenging year, from the Orphan Drug lawsuit to withdrawing the 340B regulation and now pending mega-guidance. Clearly stating, “Program integrity remains the highest priority in OPA and HRSA intends to advance that mission and ensure that the 340B Program is sustainable in the long term for all of the stakeholders who participate”. Herzog encouraged everyone to look at the civil monetary penalties regulation that is currently available for public comment and see how it may impact their 340B business. She encouraged participants to share any good or bad thoughts on how the regulation may impact their day to day operations. She noted the pending omnibus guidance (mega-guidance) will address patient definition, contract pharmacy, covered outpatient drugs, audit, manufacturer’s distribution, refunds and credits. Comments are being accepted through August 17, 2015.
HRSA has completed 135 audits so far this year and is on track to complete their goal of 200 audits by the end of September. Since 2012, HRSA has completed 363 onsite audits consisting of over 4,000 child sites and over 9,000 contract pharmacies. Herzog reminded covered entities they are responsible for their facility’s 340B compliance and they should always be “audit ready”.
Herzog said, “HRSA engages manufacturers in all of their oversite activities. HRSA is required by statute to oversee the manufacturers including verifying the accuracy of the 340B ceiling prices and making the ceiling prices available to covered entities”. She assured that HRSA is working diligently on a system to be able to provide the ceiling prices to 340B covered entities. They are working on the systems security, with the ability to setup usernames and passwords. HRSA will post information on the system’s progress on their website as information becomes available. She also informed the audience that, “along with the 340B covered entity having the ability to check ceiling prices and ensure they are receiving the correct 340B price, HRSA is going to be doing some proactive analysis with sales data and data received from CMS”. HRSA will be able to analyze the data for trends.
“HRSA is looking internally for better ways to share information with covered entities,” she said. HRSA is working to integrate and develop their IT systems so that it presents all of the covered entity’s data to them with one click calling it HRSA’s “one stop shopping system”.
In responding to a question on the possibility of requiring recertification for manufacturers, Herzog stated that they are “incrementally delving into manufacturer compliance. Covered entities are subject to more requirements than the manufacturers are, but where HRSA can, they are moving towards having recertification for manufacturers. HRSA has pushed out numerous communications in the last couple months requesting manufacturers update the database because that will aid the pricing system. HRSA has seen an increase in change requests from manufacturers to update their information”.
When asked what OPA’s long term strategy and plan for the next 3 years was, Herzog stated, “Continue to focus on program integrity and ensuring that all stakeholders in the program from the smallest clinic to the largest manufacturers are adhering to the statute and guidance set in place. To ensure covered entities are able to realize the benefit of participating in the 340B program”. She also said that HRSA will continue to audit covered entities, will increase manufacturer audits, expand their reach to add site visit questions to the various grantees, look at ways to improve their database on a daily basis, improve interaction with CMS, and continue to work with stakeholders to ensure the 340B Drug Pricing Program is meeting its intent.
She ended with encouraging participants to assess their 340B programs to ensure that it is still meeting the needs of patients served every day and work together as a community to ensure the long term success of 340B.
